Licensing of Popular Music in Advertising

There are two distinct sets of copyrights in music: the rights to the musical composition (the written lyrics and the accompanying music), and the rights to the sound recording of the musical composition. The sound recording is usually owned by a single record company and compositions often have complex ownership groups. Any reproduction of a musical composition or a sound recording requires the consent of the owner of that particular copyright.

Common Music Licensing Terms

Synchronization License: Rights to synchronize the musical composition in timed relation with audio-visual images such as a commercial. Music publishers issue these licenses either as the copyright owner or their agent.

Master Recording: Rights to use a specific recording called a Master. Covers the owner of the Sound Recording (typically the record label, or whoever paid for the recording such as the producer or the artist).

Most Favored Nations: A promise by the licensee to treat a licensor equal to any other licensor on a particular project. This would mean that the Sync and Master licensor would receive the same fee.

Linear Use: Using a song “as is” without any manipulation (i.e. moving around verses, cutting the horn section, etc.) may need special permission for non-linear use.

Exclusivity: The rights granted to the licensee will almost always be in the form of a non-exclusive license; the advertiser will pay more for an exclusive time period or industry.

There are many factors that can contribute to the fees you pay for licensed music. Consider these 10 important questions that will contribute to what you pay:

1. Do you want to use the composition AND the master recording? Or, do you want to use only the composition and do a re-record?
2. Do you want to re-record the composition with a parody lyric?
3. For television, how many spots are you producing and what are the timings of each spot? (include versions, edits, lifts, tags)
4. What is the media buy? (network, cable, spot syndication)
5. Are you doing any radio spots? If so, how many?  Lifts, versions, edits?
6. What other kinds of uses will there be? Do you need rights for non-broadcast/industrial use, sales meetings, trade shows, internet, in-store, POP, use of song title/lyrics in print or use of talent name/image in print, phone systems, in-cinema, in-flight, in-stadium/jumbotron, theme parks? Now is the time to include as much as you think you’ll need.
7. Term – How long will the campaign run and what is the first air date?
8. Territory – What cities, states, and countries will the campaign be airing?
9. Exclusivity – Do you need exclusivity and if so, for what product category?
10. Option – Do you need an option to renew the use for an additional consecutive term?

In order to procure the most competitive music licensing fees, MRA recommends the use of a third party vendor who specializes in negotiating popular music. Why? These companies have professional relationships with all major publisher and record label licensing departments and have the expertise to secure the best rates for advertisers.

Wondering how to get in touch with a music licensing specialist? Submit a request, and we’ll be glad to introduce you to the best resources in the industry — based on your specific needs.