Tuning-Up: Music Licensing Considerations for Mobile Applications

By: Anahita Anvari

Many mobile applications include background music, or play videos that include background music. Mobile application developers should be aware that even background, or “incidental,” music requires permission (a “license”) for use. This blog post details the procedure and costs necessary to legally use background music in mobile applications.

What Requires a License?

The United States copyright law requires anyone who publicly performs copyrighted music to obtain permission (a “license”) from the copyright owner. Music licensing includes both musical compositions and sound recording copyrights.

A copyright on a musical composition (a “song”) protects the melody and lyrics. The songwriter or publishing company typically owns the copyright. A copyright on a sound recording protects the specific recording. There may be multiple sound recordings for the same song, such as when different musicians record the same song. Record labels typically own sound recording copyrights. Click here for more information about differences between songs and sound recordings.

Background music in mobile applications likely qualifies as the use of a sound recording. Therefore, this blog post only addresses licenses for sound recordings. Consult with an attorney for further assistance if your mobile application includes a live or original version of a song because that may require a different license.

Where Do I Get a License and What Will it Cost?

You must obtain a license if your mobile application includes any public performance of a sound recording. A public performance” of music is one that either (1) occurs in a public place where people gather, or (2) that transmits to the public, for example, TV broadcasts and via the internet.

Under copyright law, owners of a sound recording have a “performing right,” which is an exclusive right to play their music publicly and to authorize others to do so. A “performing rights society” (PRS) is an association, corporation, or other entity that licenses the public performance of musical works on behalf of certain copyright owners, ensuring that these individuals receive the appropriate royalties for the use. Each PRS represents different repertoire of copyright holders (songwriters, composers, and publishers). Therefore, you may need to obtain licenses from more than one PRS.

The three major PRS’ in the United States are the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC, Inc..

A. American Society of Composers, Authors, and Publishers (“ASCAP”)

ASCAP represents artists like Lana Del Rey and the Beastie Boys. Click here for more information about ASCAP artists.

ASCAP offers a license for mobile applications through its “Build my License” feature. The annual license fee ranges from $255.00 to $1,499.00. The licensee must pay the greater of the minimum license fee and the amount determined by applying the Licensee’s Service Threshold to the Rate Schedule applicable at the beginning of the contract year.[1] The chart below is a sample rate schedule. ASCAP does not offer a trial period for its services, but a licensee may give thirty-day notice to cancel the license. For more information, fill out this Build my License application.

B. Broadcast Music, Inc. (“BMI”)

BMI represents artists like Lady Gaga and Pit Bull. Click here for more information about BMI’s artists.

BMI offers a variety of “blanket licenses” that permit use of its full repertoire of sound recordings. The Website Music Performance Agreement (“WMPA”) is a blanket license used generally for any commercial entity that has the potential to generate revenues from operating a website or a mobile applications, but does not constitute a Music Service. A “music service” means that the central focus of the app is to transmit audio-visual material that features music, such as a music streaming service. A mobile application with only background or incidental use of music is not a music service, and will likely qualify for a WMPA.

Regardless of the license used, all BMI licenses require a $365.00 annual minimum fee. BMI requires an additional annual license fee dependent on either gross or music revenue. BMI does not offer a trial period for its services, but will provide a refund for termination of use upon appropriate written notice.  For more information about fees, fill out this WMPA application.

C. Society of European Stage Authors and Composers (“SESAC”)

SESAC represents artists like Axl Rose and Kesha. Click here for more information about SESAC artists.

SESAC offers an Internet Performance License (“IPL”) for software applications and websites. The annual minimum fee for an IPL is $660.00. SESAC does not provide detailed pricing information on its website. For more information about the IPL and pricing calculations, contact SESAC by filling out this form.

What Happens If I Do Not Obtain a PRS License?

While a PRS can streamline the licensing process, using one is not the only option. In lieu of a blanket license from a PRS, you may reach out to individual copyright owners to use their sound recording. While this process may be tedious, it may also be beneficial if your mobile application only uses one or a few sound recordings. Consult with an attorney to determine the best option for you.

Whichever method of licensing you choose, the license is vital to avoid violating the copyright law. A public performance of any copyrighted song without authorization may constitute a violation of the copyright (an “infringement”). The copyright holder may choose to sue you for infringement. This could cost you anywhere between $750 and $150,000 per song.

For example, the fitness company, Pelaton, sells at-home fitness videos that include background music.  Pelaton is currently facing a $150 million lawsuit for failing to license the sound recordings that play in its fitness videos.

The cost of obtaining a license is far less than the potential economic and public relations damages from a violation. You should consult with an attorney to ensure your business is complying with the applicable copyright law.

[1]“Service Threshold” means the revenue and session threshold set forth on ASCAP’s rate schedule.

 


*This post was authored on March 31, 2019 and has been reproduced with Anahita’s permission.  Her original post can be found here.

Anahita Anvari, at the time of this post, is a rising third-year law student at Penn State’s Dickinson Law. She is from Southern California and is interested in business and healthcare law. Anahita founded the Health Law and Policy Society and is a Senior Editor of the Dickinson Law Review.

 

Author: Prof Prince

Professor Samantha Prince is an Associate Professor of Lawyering Skills and Entrepreneurship at Penn State Dickinson Law. She has a Master of Laws in Taxation from Georgetown University Law Center, and was a partner in a regional law firm where she handled transactional matters that ranged from an initial public offering to regular representation of a publicly-traded company. Most of her clients were small to medium sized businesses and entrepreneurs, including start-ups. An expert in entrepreneurship law, she established the Penn State Dickinson Law entrepreneurship program, is an advisor for the Entrepreneurship Law Certificate that is available to students, and is the founder and moderator of the Inside Entrepreneurship Law blog.