Relationship Between Music Licensing & Music Streaming Platforms – What You Need To Know

Guest post by Nicole McCray

Music licensing and music streaming tend to go hand in hand. Music artists can license their music for streaming services to develop networks and gain more exposure for their original works. In addition, they have the option to license entirely on their own or enlist the assistance of a licensing company. 

Since music streaming is becoming more popular every day, musicians have discovered that they can efficiently distribute their music through downloads and live streaming. Furthermore, independent artists can license their own works directly through streaming services or permit licenses for streaming so that producers can utilize the tracks for their own projects.

However, the relationship between licensing and streaming is essential for musicians to understand how to utilize them the best way. Here is an easy breakdown of how both music licensing and streaming go together and what you need to know when you have mixed and mastered your music, and it is ready for distribution.

TYPES OF MUSIC LICENSES

Permitting another party to utilize your original, copyrighted music legally is what is known as music licensing. You, the artist, would receive a fee from the licensee, and a contract has to be signed by both parties.

When you create a piece of original music, you develop two copyrights. One is for the composition of the music, such as the melody and the lyrics, and then the other is for the master recording. Musicians should know that different types of licenses can be acquired, depending on how the music will be utilized. 

Here are some of the more common licenses that would need to be signed, written agreements:

• Synchronization License: this license is more commonly referred to as a “sync” license and is one of the most popular licenses, used chiefly with streaming. It grants permission for the licensee who wants to use your musical recording in a digital media format. These are most typically used in videos, where an image is displayed over the audio. Think YouTube, video ads, and commercials.

• Master License: this type of license is usually used alongside a sync license and gives the licensee the master recording. A good example would be that if the music is a cover of another song, a new master license would be regarding the new recording instead of the song’s original version.

• Public Performance License: this license allows music to be performed in public, online, or on the radio. More utilized by companies that do theater and need these licenses to put on their shows, it is also referred to as public performance rights or performing rights.

• Mechanical License: Typically, a mechanical license is used with covers of already-written songs when a musician decides to record someone else’s music so that the original authors receive their royalties. If you ever were planning to record a song, you should look up the fees owed to the original music author and make sure you get the license to record it.

HOW DOES MUSIC STREAMING FIT INTO LICENSING?

Licenses need to be acquired for a music artist’s songs or tracks to be featured in streaming. Typically musicians should be paid royalties on their original work for both sync and a master license because the streaming services pay so that they can feature the music within their platform.

While the primary two licenses mentioned would be sync and master, there are instances where there are audio streams only, without video. Those would require public performance and mechanical license and sometimes would still need a master license if there are existing recordings that the licensee wants to use.

Are you confused yet? If you are, that’s ok. Many music licensing companies such as Marmoset's artist music licensing have paid their artists to date over $20M in royalties. They strongly encourage new artists to use platforms to self-release their music and assist them in understanding the process of doing so. Afterward, if the artist requires any help when getting established, they can license their music for many projects through the company if they desire. 

Any music artist who wants to self-release their original music can solely or work with a licensing company. Each option allows you to network with creatives and exposes your music to gain work as a musician potentially. There are advantages to both, such as with licensing, they handle most of the legalities so that you can also focus on what you do best - creating music.

Popular streaming platforms, including Spotify, Apple Music, or Bandcamp, also have their own departments that take care of the mechanical licensing needed for streaming. Usually, they become what is known as a “blanket licensee,” and they pay in their fees to the Mechanical Licensing Collective (MLC). 

If the independent artists want to release their music through popular music streaming platforms like Apple Music, Spotify, and Pandora, it has to be done through the distributors. For instance, if you were to stream your music through Spotify and are not under any label or distributor, you will need to get in touch with one of the Spotify distributors. The distributors will take care of licensing, delivering your music, and royalty collection.

There are also some streaming platforms like Tidal, currently owned by Jay Z, which allow the independent artists to upload their music without a distributor. On Tidal and similar music streaming platforms, the artists can buy various subscription plans and proceed with easy licensing processes that are curated with various personalization tools to provide all the required resources for promoting their music without losing the rights of it. 

When you self-release your music, you hold all power and rights and will be the only one to collect any royalties when permitting licenses to third parties. However, if you decide to license, you must research the streaming platforms and licensing companies before choosing which to go with to license and stream your original music. 

Not all of them handle the licensing methods the same way, which is why you will gain more knowledge in doing so independently. There are also other factors to consider, such as if they feature artists in your genre or style of music, how much they pay their artists, and how much of the licensing or streaming process is handled by you.

THE PAYOUT PROCESS

Independent musicians have the option to negotiate their terms when licensing for their streaming revenues. When working with a licensing company or streaming platform, they may have fees already set up, or they may negotiate on your behalf, so take some time to review their payout process.

The licenses can be exclusive, meaning that whoever obtains the license gets the music rights, and you cannot allow anyone else to use that music. They can also be non-exclusive, where you can utilize the same musical track to more than one licensee. Musicians even have the option to negotiate to receive their fee upfront.

While music licensing and promoting your music through streaming can seem challenging, taking some time to understand the process will help you feel more equipped when choosing to work with a licensing company or streaming platform. If you ever run into trouble or feel that you are just too confused, you can always reach out to a fellow musician or even a music lawyer or someone who can understand legal rights and contracts to assist you.