Why do I need to license anything?
What can be licensed?
In order to understand how music licensing works, you have to know the process. In order for music to be licensed, there need to be some requirements.
There are several types of licenses depending on how the music will be used:
There are some artists who public their works to be used freely, such as on the Free Music Archive, Tribe of Noise, Soundcloud, and several others. You can find a more complete list here. Note that many of these websites acutally use a system called the Creative Commons license. Some artists still require that you let them know when you wish to use their work. See the Creative Commons website for more details.
Royalties are payments made to the copyright owner of a work. It is an acknowledgement that you have made money off of someone else work and are paying them for that. It is usually some percentage of the money that you bring in, so the amount will vary. These are sent to PROs or music publishers, who then distribute these to their clients.
These are licenses used for cases where a person wishes to synchronize music to some sort of visual material, often television or film. These can usually be negotiated directly with the copyright owner or with their publisher. This licenses the composition itself, not a recording (see below for Master License agreements). The language in a synchronization license is usually boiler plate, with changes made for the names of the parties involved and the amount of money agreed upon.
A master license is created for people who wish to use a sound recording to create a new piece. Often this is referred to as sampling. However, master licenses are very broad and also apply to using sound recordings in film, television, commercials, and more. So when you get a synchronization license, it is most often paired with a master license.
This distinction between a Synchronization and a Master license:
Here's an example:
Mechanical licenses are used for cases where a person wishes to record their version of a song. This does not give the rights to a sound recording, only the right to record the song. An example of a case where a mechanical license was used is the show Glee. They recorded original versions of songs for the show and not recordings of others singing it. Therefore, they needed mechanical licenses to legally do this. The Harry Fox Agency is the most common place where a mechanical license can be obtained, though some music publishers handle this process as well. Due to the Music Modernization Act of 2018, the U.S. Copyright Office established the Mechanical Licensing Collective, which handles blanket mechanical licenses for online streaming and download services as well.
In order to perform in a public venue, you have to get a license from the copyright owner to do so. This includes any public performance, whether it's at a mall or restaurant or on stage. You can often get public performance licenses from different Performance Rights Organizations, also known as PROs. The most common of these are ASCAP, BMI, and SESAC. They are also the ones who handle the collection and distribution of royalties (see above).
It's also important to note that you also have to get a public performance license to play sound recordings in a public space, which includes streaming (except for radio and television transmission, which fall under special circumstances). So if you are going to DJ, it's important that you know how to get a public performance license. Most of these are handled through Sound Exchange.