"Spot On" Music Rights Rules For Radio Commercials

Periodically, the question invariably comes in: Can we use our station's music library to produce commercials for a good client? Many seem to think that their existing ASCAP, BMI or SESAC agreements allow them to use the music they cover for any purpose, whether it be to perform it over the air, as a part of a locally produced commercial or a station promotional CD or thumb drive.

Sometimes a client will actually request that a particular song be used in some way to punctuate their commercial message or to establish a certain atmosphere they may consider especially relevant to their product or service. Sometimes, the station simply wants to use that music in its own station promos, to further cement its brand image. These questions come up at least several times a year, and with that in mind here is an overview of the various licenses available for the performance and use of music.

PERFORMANCE RIGHTS

The ASCAP, BMI and SESAC agreements that most broadcasters enter into and that are available through the Radio Music License Committee ("RMLC") provide only for the public performance of the music licensed by those organizations. As defined by ASCAP on its website www.ascap.com\licensing\termsdefined.aspx, a public performance is one that occurs "in a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered." A public performance also occurs when the performance is transmitted by means of any device or process (for example, by the broadcast, telephone wire, or other means) to the public.

The RMLC, which represents some 10,000 radio stations, negotiates with the major music rights organizations for rates and terms of use for rates. In recent lawsuit settlements with ASCAP and BMI, RMLC obtained license agreements covering the period through December 31st, 2016. Details can be found at http://www.radiomlc.com/ RMLC is still in litigation with SESAC, claiming that it is a privately-held, for-profit firm that has created a bottleneck to, and artificial monopoly over, the works in its repertory. A similar suit by the Television Music License Committee was settled last October.

The important point is that these agreements only cover the performance rights held by the music's authors and composers. Although record companies and the artists who perform the music hold a separate and distinct performance copyright, the Copyright Act provides broadcasters a statutory royalty free license for the performance of music over their stations. Note, however, that the copyright royalty tribunal and the federal courts have determined that this statutory license does not extend to a station streaming its programming over the Internet. Accordingly, additional payments must be made through SoundExchange for streaming performances. Information on streaming rights can be obtained from www.soundexchange.org.

SYNCHRONIZATION RIGHTS

Providing only direct broadcast performance rights, a station's ASCAP, BMI and SESAC agreements do not cover the license required when a station seeks to the use of music to produce commercials. The rights required for that purpose are called "synchronization rights" and require a separate synchronization rights agreement. BMI defines synchronization or "sync" rights as a right that involves the use of a recording of musical work in audio-visual form -- for example, as part of a motion picture, television program, commercial announcement, music video or other videotape. http://www.bmi.com\licensing\entry\types_of_copyrights

The name is derived from the fact that the music is "synchronized" or recorded in timed relation with the visual images. Synchronization rights are licensed by the music publisher to the producer of the movie or program. A separate synchronization license is needed from the music publisher for permission to synchronize the composition, and a master use license is needed if a specific recorded version of a composition is used.

Sync rights also require a separate agreement directly from the recording company. However, most are represented by the Harry Fox agency in New York City, which offers synchronization licenses through online through its eSynch service.

MECHANICAL RIGHTS

Sometimes stations require yet an additional license. If they record some of their music and distribute it to listeners on a CD, promotional tape or thumb drive, they must also obtain a license for mechanical rights. A mechanical right is the right to record and distribute (without visual images) a song or a phono record for private use. Mechanical rights or mechanical licenses must be obtained in order to lawfully make and distribute these recordings. Recording rights for most music publishers can be obtained from the Harry Fox Agency in New York City. They have a good explanation of these various rights and licenses on their website https://www.harryfox.com/

STREAMING RIGHTS

AM and FM broadcasters who stream their signals on the Internet must pay separate performance royalties for the music they stream. Despite all the publicity, some broadcasters are still unaware that their ASCAP, BMI and SESAC licenses do not provide them with all of the rights necessary to "perform" their music when streaming it to listeners over the Internet.

ASCAP, BMI and SESAC licenses do provide broadcasters with rights for the composition itself from the composers and publishers of the music. The recording companies and performers, however, are paid through royalty arrangements administered by SoundExchange -- see more at: http://www.soundexchange.com and my article last year at http://www.allaccess.com/fcc-uncensored/archive/18252/soundexchange-deadline-this-friday.

So there you have it: a thumbnail view of the various types of licenses with which a broadcast station must be familiar and obtain for different purposes - performance over its broadcast station, use in the production of commercials or as promotional reproductions.

This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.