Pay the Piper

by Steve Schneider

Every station has one -- a box or shelf overflowing with newly released CDs containing music that'll never make it into the rotation but that might work as production music. And why not? It's free music, which is a lot cheaper than buying a major production music library. Sometimes that new CD has exactly the kind of "current" sound you need. The standard practice in radio production rooms has always been to use it.

But, times are changing. There is increased awareness and concern among broadcasters about the illegal use of licensed music in commercials. At the same time, there is a tremendous amount of confusion among broadcasters about what is legal. It's very difficult to find the rules of the game written down in understandable language. Maybe this will help.

There are several types of rights or permission one legally needs in order to use a piece of music in a commercial. The rights most broadcasters already know something about are performance rights, which are largely the concern of the American Society of Composers, Authors and Publishers; Broadcast Music, Incorporated; and the Society of European Stage Authors and Composers. Radio stations regularly pay these fees as a part of doing business. However, there are some who mistakenly believe that by paying licensing fees to ASCAP, BMI and SESAC, they have also paid for the right to use any music they wish in a commercial. Not so. By paying ASCAP, BMI or SESAC, the station has paid for the right to perform a work over the airwaves, but only the non-dramatic performance of separate musical compositions. That means, as the song was originally intended.

Let's say somebody like United Air Lines wants to use "Rhapsody In Blue" for their commercial. The song was not originally written for a commercial. That's not the way the song was originally intended to be used. If a station wants to play "Rhapsody In Blue" on the radio in its entirety or even a portion of it, then that's fine, as long as ASCAP, BMI and/or SESAC fees have been paid. (It is not necessary to pay fees to all three. One may be sufficient, depending on the situation.) If the station wants to use "Rhapsody In Blue" in a commercial, then a completely different set of rights are involved.

When a station pays its fees to ASCAP, BMI and SESAC, it's paying for "performance rights" or the right to perform the composition. As broadcasters, we don't perform the piece with instruments and musicians, we perform it with CD players and transmitters. The function of ASCAP, BMI and SESAC then is to protect composers' performance rights (the right to get paid for one's work) by collecting cash from those who perform compositions and then distributing the money to the publishers and composers.

A common misconception is that since paying for performance rights for a composition allows a station to play a piece of music in its entirety or in part, then it must be okay to use the music in a commercial. Yes and no. As far as ASCAP, BMI and SESAC are concerned, it's okay, because the station has paid for performance rights. But, United States Copyright Law dictates that an ASCAP, BMI or SESAC license has nothing to do with the right of first permission or approval to use that song for any commercial advertising purpose, radio or on television.

The big question is, "How does my station and my advertiser get permission to use a licensed piece of music in a commercial?" There are agencies that act as go-betweens for music composers/publishers and those who want permission to use licensed music for commercial purposes. You'll most likely need to go through one of these agencies to get permission and negotiate terms. Check album or CD credits for the name of the publisher, call them, and they'll direct you to their commercial licensing representative. Once you're talking to the right people, you'll explain what you want to use the music for, and you'll begin negotiating terms. There's no way to give you an estimate of what it'll cost to get licensing to use a particular song in a commercial. It depends on how long you want to use it, who published the song, whether it's exclusive or non-exclusive, who the client is, how many seconds the commercial runs, the A.D.I. or market in which the commercial will be used, and so on. Licensing fees have ranged from zero to four million dollars. Fortunately, the great majority of licensing deals are a lot closer to zero than four million.

Here's a hypothetical situation. Bob and Bernie's Used Cars in Franklin, Tennessee wants to use Bruce Springsteen's "Born in The U.S.A." in one of their commercials. It just so happens that Lee Iacocca and Chrysler are using the same music in one of their commercials. Moreover, Chrysler got permission, while Bob and Bernie didn't. What have Bob and Bernie done wrong? First, they never got permission to use the song from the publisher, who would have told them that Chrysler has exclusive rights to use that Springsteen composition for commercial purposes. Secondly, Bob and Bernie are advertising cars in direct competition with Chrysler. Bob and Bernie have also used a master recording and the likeness of an artist, Bruce Springsteen, without consent. In addition, the rights of the producer who put the spot together have been infringed upon, since they were the ones putting together the only commercial that was licensed to use the song.

There's more; something called "master rights." This refers to the rights of the record company that manufactured the physical media on which the song is recorded. If you're going to be taking a song from a physical recording, you need to get permission from the company that made the physical recording. Some broadcasters are familiar with these rights, often called "needle drop fees".

Here's something else to think about regarding master rights. Many production people think they can avoid this whole business by using classical music, since much of the music is old enough to be in the public domain. While the music may be in public domain, the recording itself may have been recently made. Therefore, using the physical recording to make a commercial may infringe upon the manufacturer's master rights.

What this all boils down to for the broadcaster is that your advertisers need to get permission to use a licensed piece of music in a commercial from whomever holds the rights. You need to secure commercial advertising licensing, and that comes from the publisher. If the music is lifted from an album, then you also need permission from the record company that physically made the album. And, of course, your ASCAP, BMI and SESAC licensing needs to be paid. That's three hurdles to clear in order to use Tommy Roe's "Dizzy" in a Dramamine commercial, and there may be more.

So, what happens if you don't get permission and you get caught? Who's responsible? It could possibly be everyone involved: the radio station, the General Manager, the client, the ad agency, and the overnight jock who threw the spot together ten minutes before his show. Apparently, there's no order, in which case it's best to immediately pull the spot and bury it under the tower, promising never to play it again. Or, corporate lawyer-types may come knocking on your door and take the issue directly to litigation, in which case you may need to sell the tower. These are the two extremes with a range of other possibilities in between.

Assuming that your station and its advertisers agree that getting permission to use a piece of music in a commercial is the way to go, and legally it's the only way to go, then you'll need to talk to the right people. The Harry Fox Agency is one of the biggest licensing agencies, representing some 12,000 publishers, and is a good place to start. Call their office at (212) 370-5330 and ask for a commercial licensing or synchronization agent. They'll be able to tell you if they handle the licensing for the tune you want to use. If they don't handle it, they'll likely tell you who does.

Something to keep in mind is the fact that a piece of music may be licensed to literally dozens of different parties, each with concurrent or overlapping contracts. A local spot running in Tucson might use the same tune that's being used in a different spot in Springfield and twelve other spots around the country. If everyone has permission, there's no problem. You may find that the cost involved is not as high as you might think, and that clearance can often be had in two weeks, maybe less.

It's tough for a station to take a stand on this issue and make it stick. If three stations in town are running a spot that uses licensed music not cleared for commercial use, and a fourth station, due to its desire to stay legal, declines to run the spot, then that station loses dollars. At the same time, the three offending stations set themselves up to have their infringements tape recorded and submitted with a complaint to the licensing agency that handles the publisher of the music. But, by doing so, the legal station runs a big risk of making enemies out of the potential client and any number of other clients, not to mention the three other stations.

It's difficult to explain this licensing business, especially to local advertisers who are used to using whatever music they want in their commercials. It's hard for a pizza joint owner in a small Wyoming town to believe that Janet Jackson really cares if one of her tunes is in his local thirty-second spot. Once a station takes the high road and tries to stay legal, the inevitable questions from advertisers include, "We've been using that song for years. So what's different now?" or "The station across town does it. I guess they want my business more than you do, huh?" or "Aw, c'mon, who'll know?" To help answer these questions, I've come up with a pamphlet for Portland Radio that gives advertisers an outline of what's involved in getting music licensed, as well as providing some definitions and possible courses of action. What follows after the ENORMOUS DISCLAIMER is the copy from that pamphlet. You're welcome to use any or all of it if you think it'll help.

ENORMOUS DISCLAIMER: I am not a lawyer. My formal education in matters of law ended with driver education in high school. Be aware that there is a lot of misinformation in the broadcast industry concerning music licensing. Hopefully, this article will help clarify matters and not add to the confusion. It is accurate to the best of my knowledge. If you have questions concerning the licensing of music for commercial use, consult the sources mentioned in this article or your company's legal representatives.

Who's Right?: A Brief Summary of the Ways Music Licensing Affects Radio Advertisers

The Terms

COPYRIGHT - Protects a writer, artist and composer against unauthorized reproduction, revision and distribution of the particular sounds in a physical recording. For example, this is the law that makes bootleg cassettes illegal.

PERFORMANCE RIGHTS - Insures that a composer is paid for the use, performance and interpretation of a piece of his or her music. Under these laws, radio stations pay fees to licensing agencies ASCAP, BMI and SESAC who then pay music publishers, who in turn pay their composers.

MECHANICAL RIGHTS - Mechanical rights are the rights to use a composition to physically manufacture and distribute audio only recordings, such as albums, cassettes and CDs.

SYNCHRONIZATION RIGHTS - Insures that a composer is compensated when his or her work is used in conjunction with an audio/video medium, such as videotapes, movies, interactive video or CD-ROM. These rights also insure compensation where audio is synchronized with something else, such as being synchronized to a voice-over in a radio commercial.

MASTER RIGHTS - Generally owned by whomever made a physical recording and insures compensation for use of a physical recording. Also known as "needle drop fees".

LICENSING RIGHTS - An all-encompassing term used to describe the rights that need to be secured in order to legally use a piece of music in a commercial.

The Times

Works originally copyrighted on or after January 1, 1978 are protected for a length of time equal to the remainder of the last composer's life plus fifty years. Anything copyrighted before that date is protected for a term of 28 years from the date the copyright was secured. During the 28th year, the copyright can be renewed for a term between 28 and 47 years for a total of up to 75 years from the date of original copyright. The rules governing master recordings are similar.

The Story

Advertisers use music in radio commercials as a powerful way to evoke memories, feelings and attitudes among listeners. However, using music in commercials has strings attached, commonly known as "rights" designed to insure that publishers, composers, and artists are paid for their work. Among these are copy rights, performance rights, mechanical rights, synchronization rights, and master rights. Broadcasters and advertisers should be concerned with all of these, depending on the situation.

In order to use a licensed piece of music in a commercial and then play that commercial over the air, one must first obtain performance rights. Radio stations take care of performance rights each year by paying fees to one of the three licensing organizations, ASCAP, BMI or SESAC. Once these fees are paid, the radio station has the right to air any piece of music covered by those fees. Whether a song is played as a whole, in part or as part of a commercial is irrelevant as far as ASCAP, BMI and SESAC are concerned.

However, paying these fees does NOT give one the right to use a song in a commercial. Obtaining the right to do so requires securing permission from the music publisher or the licensing agency that represents the music publisher. In addition, if the music is to be taken from a physical recording, then permission granting "master rights" must be secured from the manufacturer of the recording. Once these conditions have been satisfied, then it is acceptable to use a particular piece of licensed music in a commercial, depending on the terms agreed to with the licensing agency and publisher.

The Process

As a radio advertiser, you can be quite safe in assuming that the station you'll be advertising on has paid its performance right fees to ASCAP, BMI or SESAC. It is simply a part of doing business for radio stations. To obtain permission to use a piece of music in a commercial, you will need to contact the publisher of the music or the licensing agency that represents them. One place to start is the Harry Fox Agency in New York at (212) 370-5330. They can tell you if they represent the publisher of the music you want to use or can direct you to the agency that does represent the publisher. If you are able to work out agreeable terms with the licensing agency, then you may use the music. If not, then it is illegal to use the music in a commercial.

The Option

Radio and television stations, corporate users and movie producers all use "production music" which is written and produced in many different styles specifically for commercial use. When a radio station leases or purchases a production music package, they are securing all necessary rights to use that music in a commercial. By using "production music," an advertiser, radio station, ad agency, and producer are granted the right to use the music without incurring additional cost, obligation or liability.

The Policy

Portland Radio respects the rights of those who make their living through the writing and performing of music and will not knowingly engage in licensing infringement.

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If you're looking for more information about music licensing, you might take a look at The Art of Music Licensing by Al Cone, published by Prentice/Hall. It's a lengthy book and costs about $100, but it is considered to be a major reference. Another source that's a lot less expensive (free) is the Copyright Office at the Library of Congress in Washington, DC 20559. That's the same office you write to for the forms needed to copyright your own articles and compositions. Of course, check the reference section at your local library, especially if you have access to a sizable university library.

While music licensing is a subject that sparks nowhere near the amount of passionate discussion among production people that talent fees and digital audio workstations do, the implications for broadcasters are just as important. Is it okay to consistently violate federal copyright laws at federally licensed radio stations? Is it okay to bite the hand that feeds us everything on our playlists? One thing is almost certain. If the music industry decided to sue the commercial broadcast industry for licensing infringements, none of us would have a legal leg to stand on.