The Music Business Buddy
A podcast that aims to educate and inspire music creators in their quest to achieving their goals by gaining a greater understanding of the business of music. A new episode is released each Wednesday and aims to offer clarity and insight into a range of subjects across the music industry. The series includes soundbites and interviews with guests from all over the world together with commentary and clarity on a range of topics. The podcast is hosted by award winning music industry professional Jonny Amos.
Jonny Amos is the author of The Music Business for Music Creators (Routledge/ Focal Press, 2024). He is also a music producer with credits on a range of major and independent labels, a songwriter with chart success in Europe and Asia, a senior lecturer at BIMM University UK, a music industry consultant and an artist manager.
www.jonnyamos.com
The Music Business Buddy
Episode 59: Blanket Licensing Demystified
How would you feel discovering your music was used on a major TV show without anyone telling you? That's the reality of blanket licensing – a system that keeps the entertainment world turning while ensuring creators get paid.
Allow me to break down this complex but crucial aspect of the music industry, explaining how blanket licenses grant broadcasters and venues the right to use vast catalogues of music for a fixed annual fee. Rather than negotiating individual licenses for each song, these agreements streamline the process for businesses while generating royalty streams for creators.
Delving into territorial differences, I reveal how the UK system operates through a PRS for Music partnership, contrasting this with the more fragmented American landscape where individual sync deals remain dominant. This geographical variation explains why synchronisation opportunities in the US often command higher rates than their UK counterparts.
For creators wondering about payment mechanisms, I illuminate the dual streams of revenue – upfront license fees and ongoing performance royalties – while acknowledging the frustrating reality of delayed payments. Through practical examples, I demonstrates how songs get used, how royalties are calculated through cue sheets, and why you might discover your music on television months before seeing any payment.
The episode provides valuable insights for both sides of the equation: music creators seeking to understand their rights and payment structures, and music users needing efficient access to quality content. Whether you're a songwriter curious about how your royalties work or a small business wondering about music licensing requirements, this accessible breakdown transforms confusion into clarity.
Listen now to gain essential knowledge about one of the music industry's most misunderstood systems and discover why blanket licensing matters to everyone in the creative economy. Have questions about your specific situation? I welcome your inquiries as part of the podcast's mission to educate and empower the music community worldwide.
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The Music Business Buddy. The Music Business Buddy. Hello everybody and a warm welcome to you. You're listening to the Music Business Buddy with me, johnny Amos, podcasting out of Birmingham in England. I'm the author of the book the Music Business for Music Creators, available in hardback, paperback and e-book format. I'm a music creator with a variety of credits I'm a consultant, an artist manager and a senior lecturer in both music business and music creation. Wherever you are and whatever you do, consider yourself welcome to this podcast and to a part of the community. I'm here to try and educate and inspire music creators from all over the world in their quest to achieving their goals by gaining a greater understanding of the business of music.
Speaker 1:Okay, so in this week's episode I am talking about blanket licensing. I'm doing this episode because I have had a number of inquiries recently from people asking me to kind of try and explain their royalties, explain why their song got used in a TV show, how they get paid and all that kind of stuff, and it all relates largely relates to this subject. It's one of the things that's kind of perhaps a little bit misunderstood, so I'm going to try and simplify it in the next few minutes. Here we go. Okay, I'll start with the definition and then I'm going to break it down, give you some examples and put it in context. I don't know about you guys, but sometimes if I just hear words being read, it doesn't always stick with me. It's only when it's actually applied to particular examples that I can kind of go ah, that's what it means. So if you think and learn like me, then hopefully I'll put this in a way that makes it a little bit more digestible. So to start off with a definition, right.
Speaker 1:So a blanket license in music basically grants the right to the use of a collection of musical works, often an entire catalogue, for a flat fee. So rather than needing to, kind of, you know, negotiate individual licenses or fees for each song, a blanket license will just simplify the licensing process for sort of businesses and broadcasters that frequently use music. So that could be restaurants, venues, radio stations, other examples which I will kind of come to in a bit. So instead of negotiating with individual copyright holders for each song, a blanket license basically just provides access to a much wider range of music, potentially even millions of songs. There is a predetermined kind of annual fee that is paid each year by the people that wish to use music, which also makes it then easier for companies to budget, for example. It's a pretty simplified process, depending upon where you are in the world, and I'll give you examples of that in a bit but this whole process effectively eliminates the need to track down and negotiate with each individual songwriter or publisher, so it speeds up the use of music in a wide range of media applications.
Speaker 1:Now, I often think that in order to understand something, it's quite useful to look from both sides of a perspective, right? So if we kind of look at this from the perspective of a music creator whose music has been used and then we also look at it from the perspective of a music user that wishes to license music, right, so, because they're the, the end result is the same, but the perspective that they have on this is totally different. Right, one's using music, needs music. The other one makes music and wants to make money from it. So let's start off from the uh, the kind of the broadcaster's point of view, or whoever is paying that license fee, right? So let's say, the company or entity pays a fee to the relevant PRO, and that's how it works, by the way. So let's say, for example, a production company that makes radio TV podcasts, whatever, they would pay a fixed fee each year to their performing rights organisation and then the performing rights organisation then distributes the payment in the form of kind of itemised royalties to the copyright holders of the song right that are used. So it's the PRO, the performing rights organisation, that actually issues the licence on behalf of the copyright holders, which is very often, by the way, something that you sign up to.
Speaker 1:When you sign up to, let's say, CODA or PRS for music or whoever, there's often a little box in there that says can we issue licenses on your behalf to music users, and it might be that you click yes or you click no, or maybe even, depending upon the PRO, it's a term of the agreement that you sign up to. You know, kind of like one of those little things that people don't often read. The reality is, no one's tricking you into anything when you do that. It's more so like I can't think of many people that would say oh no, please do not, you know, issue licenses for my music, for this, this, this. You know, that's where music publishers come in and look at moral rights and stuff like that.
Speaker 1:But if somebody wants to use your music, they would look and go, right, is it registered with this pr? Okay, great, we can use it under blanket use. Because if they want to use and they mean meaning the broadcaster or production company or whoever's paying that blanket license fee, that fixed fee per year they want to be able to use as many songs as possible. Like, not absolutely everything falls under a blanket license. They have to check if a certain song is accessible and covered under blanket license usage. So it can be a pretty tricky subject to sort of unpack because there are a few variables to it that can actually vary quite dramatically, especially when you look sort of country to country.
Speaker 1:So let me explain how it works in the UK. Okay, so there is a partnership set up between PRS for Music and PPL right in the UK. So the PPL stands for Phonographic Performance Limited and PRS Performing Rights Society. Okay, so PRS for Music, which is Umbrella CMO, which covers PRS and also MCPS. That's a lot of letters. I hope you're still with me. Let me just simplify that last 20 seconds. Okay, so PPL would cover the use of the recording and PRS for music would cover the use of the song.
Speaker 1:So if a production company says, hey, we want to use this song over here. They don't just need to clear that song, they also need to clear that particular recording of that song. So this is why a few years ago PPL and PRS in the UK actually partnered to create what they call the Music License, because there was perhaps a lack of education out there from companies, quite innocently, you know, clearing songs but not always clearing the recordings. So what they did was partner up to establish the Music License, which covers kind of the song and the recording. Right Now, if a song is released commercially, ie it's in the public domain, it's available to consumers, you can stream it on Spotify etc.
Speaker 1:Then a music user and the music user here, remember, is the broadcaster or company that's wanting to use the music the music user will need to check whether the song is actually registered with PRS for Music and with PPL. So in the UK PRS collects and distributes money on behalf of songwriters, composers and publishers, but PPL collects and distributes on behalf of performers and rights holders of recordings, for example, like record companies. So music users can search the databases of both organisations to find out whether a song is actually covered under blanket licence use. So if the song in question is not found, many music users will look for other options, which you know will also include other songs that are covered under a blanket licence use with PRS and PPL. So this can be a pretty lengthy process for a lot of music users and a pretty time time consuming one at that. So, especially you know, when you, when the use of you know specific song is crucial to a project that they're working on, they find out it's not covered under blanket usage. That can be a real problem in post many of the major kind of broadcasters and also a smaller blanket contract which is also available for independent production companies.
Speaker 1:The fees for blanket licences between broadcasters and PRS are not usually disclosed, although PRS for Music does provide a certain sense of transparency to copyright holders regarding the rates that are payable to them through sort of downloadable PDFs which are published on its website. So you can have a look at that. If you have a look at the rate cards for PRS and MCPS, you can see it on there and they'll show you exactly what you should get paid per you know television show, whether it was peak or non-peak and that kind of thing. So they are. I would say they're pretty transparent and open about it, but it's difficult for all PROs to be able to do that. It's a lot of work. Not all of them do it.
Speaker 1:However, there are still some discrepancies, let's say so. Rates do differ between broadcasters. So, for example, in the in the uk again, music users working with channel four will be expected to pay a fee for each track used, whereas the bbc pay a much kind of larger sum to the collection societies each year rather than paying for an, you know, an individual fee per song. So if a music user is looking to license music for a TV show that's broadcast in the UK, on the BBC, for example, the blanket license route is a pretty good option for them. However, difficulties could arise if that program is to then be licensed outside of the UK, as the blanket license may not extend to other territories, right, and other sort of additional rights will need to be cleared up. So you see, this is why people get confused about it, right? Because it's not simple. It's not simple at all, but that's why I'm doing this episode to try my best to try and simplify it.
Speaker 1:So just to put a little summary on that kind of UK case study there, blanket licensing in the UK is a little simpler because there's only one PRO right, which is PRS for music on the song side right and that controls blanket use and, you know, issues licenses for the use of those songs and issues blanket licenses to those that want to pay for them. The position is actually pretty similar in canada, according to my research, where blanket licenses are controlled exclusively by secan s-e-c-a-n. In the usa, by contrast, blanket licensing is maybe a little bit more complex and therefore a little bit less common, as there are just there's more PROs and an even wider range of broadcasters. If you look at how many broadcasters and how many PROs there are in the UK and then compare that to the USA, it just doesn't work in the same way. I mean ASCAP, for example. In the USA you can get a blanket license with ASCAP, but it's not going to cover as many things. It's going to cover certain songs and certain things, but if you want a much wider array of music. This is why tracking down single song agreements and stuff through sync agents, through music supervisors, is far more common in America. It also explains perhaps why there's more value, why very often publishers, artists, music creators, copyright holders etc. Like to pitch more for America than they do in the UK because they pay more out there, and this is perhaps one of the reasons that contributes towards that, as well as perhaps maybe a higher value of service and entertainment in general. Perhaps if they're just different cultures and just different, you know, considerations to have, okay.
Speaker 1:So one thing that works particularly well under blanket license is the use of production music, and I'm going to use a couple of other terms there. I know I've talked about production music before a couple of times on the podcast. Production music is also often referred to as library music. It's also often referred to as stock music. Now, traditionally speaking, it was very often sort of instrumental beds and cues which are created by composers, signed to a publishing library and then made available. Signed to a publishing library and then made available, not in the public domain but to music users, or, ie, made specifically for background use on television. That still exists, but it has evolved a little bit. In fact, episode 19 of this podcast goes into so much detail on it with my guest from that time, jason Tarver, where he explains how and he's very successful as a media composer and he explains production music use in great, great, great detail. Do check out that episode, that episode 19. But just to summarise that point, it works particularly well, it being blanket licensing. I should say it works particularly well in the context of production music, because that is music that is composed primarily, if not solely, for the use of production companies on an editorial level, when putting together radio stations, radio shows, television shows, podcasts, etc. And it's also instantly clearable.
Speaker 1:All right, let's now have a look at this from the subject of a music creator, right? So you know, first of all, how do you get paid, right? So there are generally kind of two ways in which a music creator, you know, is paid for their work, right? Although it can differ a little bit from country to country. I know I say that a lot, but it's true it does. But I'm going to try and kind of simplify this as much as I can.
Speaker 1:So, first of all, there's license fees, right, these are upfront fees that are paid by a media company. That covers the usage of a recording. So that's one side of it. But there's also performance royalties, right, which falls much more under the kind of common bracket of music publishing. So royalties that basically relate to the composition being played in public, which are then collected and distributed by the performing rights organisation that the member or publisher is a member of. So some of the key factors to bear in mind. However, I mentioned this a little earlier.
Speaker 1:But in the USA it's often the case that a library pays a one-off fee to a composer. This then allows the music library to take, you know, 100% of the license fee that it receives from the point onwards of when that recording is then used. But if you know there's a sense of risk there for both parties with that approach, you know so. By contrast, you know, here in the uk upfront license fees for the use of a recording are typically split between the, let's say, composer, producer and the music library. That's certainly the case in production music and still the case in the use of commercial music, ie music that is being used on television, that's already been made available in the public domain. But the caveat that comes with that, of course, is that it just depends on how you've split that master in the first place, what kind of deal you've got set up with a record company, with a producer, with a manager, with a band or whoever else owns a part of that recording with you.
Speaker 1:Licence fees can vary significantly from small fees for temporary internet usage and scale considerably higher for numbers for things for major networks. I'm kind of stating the obvious by saying that it's always usage that dictates, kind of how much you get paid. If there's 10 people listening or watching, or if there's 100,000 people watching or listening that's higher numbers you're going to get more on the back end for it, right? It kind of makes sense when we think about it logically like that. Now let's try adding a little bit of context by looking at an example.
Speaker 1:Ok, so let's imagine that you know, someone's just text me and said hey, I've just heard one of your songs on a reality TV show. And you go, really, ok, you look it up and you go oh yeah, that is, that is my song. I didn't know about that. Ok, why have they been allowed to use that? Well, the answer is blanket license, right, ok? So then how am I going to get paid? Well, you'll get paid when the cue sheets from that production company are then sent forward to your PRO, who will then calculate it and itemise the use of the royalties based upon you know how often the song was used, what time of day it was, how many people watching, all those kind of things, right, and that will dictate, kind of, how much money you get for that and by that I mean the song, because we haven't discussed the recording here, have we Now?
Speaker 1:We then have to look back and go okay, who did I sign that song to? Oh, it was this music publisher over here in this country. Okay, right, let's have a look at the deal I signed. I can't remember what we agreed to. Now you look at it and you go, okay, yeah, yeah, you know, blanket use is set up. They've got different partners that they work with and I get to keep, oh, let's see, 50 of the upfront use for any recordings for the. Okay, right, so I am going to get money for the recording as well, but that's also going to that.
Speaker 1:You know, those payments can take a little while to come through, so that if we then look back to the song and you go, well, we haven't had any money for that yet, the royalties also take time to come through for that. It's a slow process process. I wish it was faster. Maybe it'll speed up in the future, but it's still slow. Don't ask me why everybody, it just is right. So, because those things have been logged and because those cue sheets have been sent in, that creator or me in that case would still get paid. Right, it might not be straight away, in fact it definitely won't be straight away, but you will get paid for it.
Speaker 1:It might also be the case that let's say, for example, that friend hadn't texted me and said hey, your song's being used here. How would I know? Well, I'm just going to look at my royalty statement at some point and go, oh, this has been used on such and such. Oh, wow, okay. And it's weird as a music creator, because you look at it and you go that's weird, that that there, I didn't know about that. But then why would you know?
Speaker 1:It's difficult to kind of track usage on everything. And this is where music publishers come in, by the way, because you know they generally have greater protocols for that kind of thing. You know the pros. They do their best, right to keep a track of everything that's coming in and everything that has to go out. But there are going to be slips here and there where they don't know about stuff, and that's where for a music publisher can be pretty useful, because they can come in and go right. Let me just do a little bit more of a rigorous sweep up on the collection here. Let me just make sure these production companies have, you know, submitted these cue sheets, or that radio station sent this or whatever. That's one of the roles that a music publisher does. There's nothing stopping songwriters, composers, anybody that kind of controls songs, from doing that as well. But it's just, it can be time consuming and, you know, very often publishers have their own protocols, their own ways of doing things like that. So that's an advantage there of working with a music publisher in this context.
Speaker 1:All right, let's flip that right. Let's go back to that reality show again and let's look at it from the perspective of somebody that's working on the production company that's making that television programme. Right, so they found the song and the recording and they go OK, this is perfect for this spot, it's perfect for this particular scene. Ok, let's go ahead and use it. Boom, right, let's. Is it covered under our blanket licence uses? Let's have a look at PRS database. Yes, it is Fantastic, we can use it.
Speaker 1:Boom, they're not going to notify the copyright holders at that particular point. I mean, some do, but you know, generally speaking they won't. And why should they? Because they've got a blanket license in place, right, it might feel like a nice token gesture for them to reach out to every single copyright holder as to when and where and how they use their song. But it's just, it's not reality because it would just take too long, and that is again one of the one of the purposes of a blanket license, so that they don't have to.
Speaker 1:It also means that their budget is much more manageable because they can say, right, we want to use X amount of songs that is covered entirely under this and we can get that edit done and get that done and get that moved on, stick it on the cue sheet that we use that song and bang, it's made the whole process so much easier for us. Ok, so if you think about it, there's a lot of convenience here, right, it simplifies the music licensing process for businesses that play music regularly. It's also a bit more kind of cost effective for them, because you know it can be more cost effective than sort of, you know, licensing individual songs. That's in money and in time, of course, course, especially if they can kind of forecast relatively high usage. And there's also legal compliance, right, it ensures that legal compliance with the copyright laws is, is all kind of box checked correctly, you know, and obtaining the necessary licenses and stuff.
Speaker 1:Um, there are also other examples, by the way. I've only really talked about broadcasters and stuff there, but, but you know, production companies et cetera. But there are other types of people that would also wish to use a blanket license. Let's take, for example let's say, imagine like an orchestra, right, or a brass band, and they go all around the country touring and playing well-known songs, right? So they're doing perhaps their own arrangements of well-known songs. It's probably going to be cheaper, depending on how many dates they play. It's probably going to be cheaper for them to obtain a blanket license for the use of that tour for that year or whatever, because otherwise they're going to have to, kind of, you know, spend more time clearing things and paying for things separately. It just speeds up the process for them a little bit, ok.
Speaker 1:So there you have it, guys, a little summary on blanket licensing. It can be a little tricky to understand. It can also be a little bit tricky to execute and to fully explain. So I was hoping that this particular episode would be squeezed into about 10 minutes to kind of give you like a little nugget of information, but it's a little bit longer, but that's okay. Hopefully, I'll try to summarize it as best I can. If you have any questions, any queries, honestly feel free to reach out to me. Right? I'm easily found, I like to hear from people and I like to be useful to people, right? That's why I'm here, that's why I do this, that's what this is all about. Okay, that's enough from me today, until next time, everybody. May the force be with you.
