DJ Intelligence Earns Endorsement from Canadian Professional DJ Association, Inc. (CPDJA)

DJ Intelligence is excited to have earned an exclusive endorsement from the Canadian Professional Disc Jockey Association Inc. The CPDJA is Canada’s largest professional DJ association, with more members reported than all other Canadian associations combined. Many members of the CPDJA already use DJ Intelligence’s online interactive client tools on their DJ websites and through this endorsement the CPDJA will be extending an invitation to all of its members to use DJ Intelligence.

“The CPDJA is a great organization and we are thrilled they have recognized the power and value of DJ Intelligence for their membership,” said Scott Kartsounes, CEO of DJ Intelligence’s parent company Intelligence, Inc. “We look forward to serving their members with great service backed by our incredible 24×7 support.”

While DJ Intelligence is owned by Intelligence, Inc., a U.S. based company with subscribers in two dozen countries worldwide, Canada is DJ Intelligence’s second largest market with thousands of users. The software itself is fully optimized for the Canadian market, including currencies in Canadian dollars, date reversal, kilometres (KM) on the mileage calculator, and even the option to add special service/VAT taxes that are unique to Canada. It is DJ Intelligence’s goal to perfectly fit the needs of the Canadian marketplace and is continually making improvements to the software to cater to this important group of DJs.

This endorsement further reinforces DJ Intelligence’s position as an industry leader with a reputation for quality, trust, and reliability. Mobile DJs in North America can use DJ Intelligence with confidence, knowing they are working with a professional organization dedicated to impeccable customer service.

CPDJA members can take advantage of a special offer developed just for their association. If you are a member of the CPDJA and are considering subscribing to DJ Intelligence, please contact DJ Intelligence or the CPDJA through their websites at www.djintelligence.com and www.cpdja.ca.

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DJ Intelligence introduces quarterly billing options for those affected by the economy

DJ Intelligence is pleased to introduce new quarterly and bi-annual billing options for those companies hit hardest by the economy. The cost of DJ Intelligence is competitively priced at under a hundred dollars a year. But some companies who have been affected by the slow economy are finding it difficult to make ends meet, especially as bills come due during their slow/off-peak season. “Let’s face it, in this economy every dollar counts. The ability to spread out payments over a longer term or to move your annual billing date to a more profitable season is a helpful option for some companies” said Scott Kartsounes, CEO of DJ Intelligence parent company Intelligence, Inc.

The payment plans have been offered on a test basis to a few dozen companies for over a year now. “The feedback has been extremely positive. Some companies are consistently renewing on a quarter-by-quarter basis while others are taking advantage of a onetime quarterly or bi-annual payment to move out their annual billing date, for example from January to July,” said Kartsounes. “The ultimate goal is to offer the greatest level of flexibility for our subscribers and offer every available option to help them through these turbulent times.”

Those who are interested in learning more about the new quarterly and bi-annual payment plans should contact DJ Intelligence’s support team at http://support.intelligenceinc.com. “The greatest part about our payment plans is that there is absolutely no change in the level of service you receive from DJ Intelligence. You will continue to get all the same features backed by the same incredible 24×7 support,” Kartsounes added. If your company has been hit hard by the economy, please contact DJ Intelligence today to learn more about these new payment plans.

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Join DJ Intelligence at Mobile Beat DJ Show in Vegas Feb 9-11

DJ Intelligence will again be attending the Mobile Beat DJ Show & Convention in Las Vegas from February 9th-11th this year. Selected members of the Intelligence, Inc. staff will be on hand to answer questions, give product demonstrations, and gather feedback & suggestions from existing users.

DJ Intelligence will again have its interactive booth in the quiet room of the exhibit hall where you can demo the latest technologies on multiple laptops. Additionally, DJ Intelligence will be hosting an introductory website seminar at 1:00 PM on Wednesday, February 10th for those DJs who do not currently use DJ Intelligence but are interested in learning more about it. If you are attending the show, please make plans to stop by the DJ Intelligence booth to say hello and introduce yourself. If you bring a colleague over to our booth who does not currently use DJ Intelligence and they sign up, we’ll reward you both for your referral!

Existing DJ Intelligence users should also plan on attending the “Outside The Box” seminar at 2:00 PM on Wednesday, February 10th to learn about great 3rd party products that can further enhance your DJ Intelligence tools and set you apart from your competition!

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Get Real: Success in 2010 by Mark Johnson

Get Real: Success in 2010

By Mark Johnson

With some realistic, creative business management, you can realize a better future

With apologies to the 1992 Clinton election campaign, the phrase “It’s the economy, stupid” seems more relevant than ever to virtually every aspect of life these days. Lets look at what this means for mobile DJs-and how can we use it to our advantage.

It well known that while adding professional music to any occasion improves that occasion, it could be argued that we may be the first to be omitted or at the very least, reconsidered for both our added value when times get tough.

LIFE GOES ON, BUT MORE FRUGALLY

Let’s start at the top. Will people change their mind and not get married due to the economy? Probably not. Besides the love thing, getting married allows the two single people to reduce their expenses and combine other expenses like housing, insurance etc. However, when it comes down to planning their wedding, many couples are taking a second look at all of the elements within this important, once-in-a-lifetime occasion.

I’ve seen several “Your Money” segments on various cable programs that indicate an increase in the number of the young couples taking the major amount of money normally spent on a wedding (and perhaps the following honeymoon) and spending it more pragmatically as a down payment on a house. In today’s economy, that’s very hard to argue against.

I personally have been involved with this decision in a few ways. The first has been losing some bookings as couples have changed their minds on the primary wedding reception. Secondly, some have changed their receptions from large affairs to more sedate gatherings coinciding with the actual wedding ceremony. The third change has involved more of a “party” than a wedding reception, held months after the actual wedding and usually at the family home.

All of these have the intention of NOT spending money on the extravagance of a soup-to-nuts wedding reception. While we might wish to have “blank-check” clientele, the current reality seems to inficate a backlash against such large expenses.

This budget-consciousness will in many cases trickle down to other family functions as well. Bar mitzvahs, sweet sixteens, graduations, first communions and birthday parties have all taken a slight turn for the worse regarding the use of our services. Factor in the increase of the “do it yourself” attitude of the clients with iPods and the lesser DJs with their cheaper systems and standards and you have a new storm on the horizon: Less sophisticated events allowing less sophisticated music that’s barely bordering on “professional.”

Corporate events and holiday parties have also seen decreases as recent headlines have chastised major companies for such celebrations. One headline in particular mentioned a solvent insurance company canceling their annual Las Vegas “sales conference” (wink, wink) not based on the money (which they had) but on the negative image of such a luxurious expenditure (which they didn’t need). Despite the company being able to afford this event, the motivational value of such an event to the salespeople, and the business that they bring to Las Vegas, the overall choice was to pull the plug. Everyone loses.

DJs fall precariously into two distinct categories regarding events: Value Added or Discretionary Expense. People will get married, have birthdays, and they will retire or graduate with or without DJs. In essence, these and other events will continue and adding a celebration to the event may or may not require a DJ.

About the only DJ event that we are absolutely necessary for would be school dances. There, the music IS the event, instead of simply coinciding with an occasion that would occur with or without us.

But enough gloom and doom. What can we do about these tentative times?

ADJUST YOUR FOCUS

First, the “sky’s the limit” mentality regarding DJ pricing may take a temporary sabbatical. Our clients are getting squeezed and are then squeezing their suppliers for better deals. Everyone is becoming a better shopper. The intangible qualities of our services (ie., “professionalism,”‘ “worth” and “customer relationships.”) will be seriously challenged.

Second, there will be fewer events to share with seemingly more DJs. And the newcomers to the DJ business will certainly exert pressure to bring down pricing. Now is the time to reinforce your relationships with repeat customers, namely schools and corporate events. Perhaps dangle a free or reduced price dance in January for locking in a whole year’s worth of regular dances. Offer a company a reduced rate for a non-Friday holiday party. Help create mini-sales conventions/celebrations held at the company’s facilities instead of the larger annual blow-out.

Cozy up with your local facilities that refer DJs by offering a greater referral fee. That’s highly negotiable and could make the difference in many cases. These venues are usually on the front lines of booking smaller family parties.

Keep in touch with semi-annual mailings to prior one-time events like weddings and perhaps “freeze” your rate for using you in the future. That should at least inspire a return phone call. Perhaps make it a one-time offering, which should coincide with a projected duration of the current economic situation. You don’t want to lock in a current rate forever.

INTREPID ENTERTAINERS

I’m reminded of FDR’s famous statement during his first inauguration, during the Great Depression: “There’s nothing to fear but fear itself.” Sure the economy is in the toilet. Sure, there’s more competition with lesser rivals. Sure, you have increased expenses with potentially reduced income.

But this time offers a great opportunity to review your overall approach. You have expensive equipment waiting to make you money. Look at other ways to get it working for you, like rentals or sound production. You have time to perform DJ gigs. Doing some freebies won’t cramp your calendar and could potentially generate new long-term clients that will be with you after the economic crisis passes. Why let money get in the way of your business, especially the DJ business? Each performance has incredible referral potential. There are some rays of hope among the clouds.

And when the sky clears (as it always does), the flexible, better-prepared mobile DJ will come out as the stronger DJ, leaving the competition looking for their next careers.

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Cast Your Vote Now

Since releasing the most requested songs of 2009 (http://djintelligence.com/charts/DJIntelligenceMostRequestedAll2009.pdf), hundreds of new DJ companies have joined DJ Intelligence so they can include their clients’ requests in next year’s tally.

The DJ Intelligence music request system is just one of nearly two dozen interactive web modules included with the service, but among DJs it is agreed to be the most popular. The DJ’s clients can log on to their existing website and search through their personal music library (or use the default list of 75,000 songs which is updated weekly) by keyword, genre, decade, and other search parameters, or simply browse through the DJ’s library by song title or artist. They can view song suggestions by category. They can even listen to 30 second song samples and view the lyrics to any song with a single click!

When the client finds a song they like, they can add it to one of three custom request lists: Must Play, Play if Possible, and Do Not Play. The DJ can select how many of each type of request they are willing to accept and can even change the labels if they do not like these terms. The client can attach “notes” to any request for special instructions or dedications. And if the client wants to request a song that is not in the DJ’s library, the DJ can optionally provide the client with a “custom” request button for entering these requests by hand.

The client can save their work for continued progress and return to the site at any time to retrieve their saved list. Since the service is web based, the client can connect from anywhere in the world using an internet connected computer (PC or Mac) and their web browser. Throughout the process, the DJ can monitor the client’s progress through the Control Panel and even receive email notifications every time the client makes an update to their list. Upon completion, the client’s request list is electronically submitted to the DJ by email which also includes a link to a printable HTML report. If the DJ uses digital DJ software, the system can create an M3U playlist file so all the client’s requests are pre-loaded for the event!

Perhaps the neatest feature of the DJ Intelligence music request system is that every time a DJ’s client makes a request, that request is automatically included in a real time tally for the “most requested” lists. This means their contributions are helping to shape future events all over the world. Millions of requests are cast each year through this very system. To test drive a live demo site, please visit http://www.demo.djintelligence.com/music. To learn more about DJ Intelligence and add it to your existing website so your clients’ requests can be included in the voting, visit http://djintelligence.com.

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Capitalize on social networking

The DJ Intelligence News & Information Blog allows you to quickly and easily publish articles on your website. The benefits of writing articles for your blog are vast, and experts agree that publishing a blog is a one of the leading ways to increase traffic to your website and gain free exposure for your business. The articles you post on your DJ Intelligence News & Information Blog are streamed directly into the Google search index (and other top tier search engines) which means that unlike traditional web pages which can take days, weeks, or months to appear, you will often find that your blog posts show up in the Google results within hours, giving you immediate exposure. Additionally, your clients and prospects can subscribe to your blog’s RSS or Atom feed to automatically be notified anytime you publish a new article (unlike bookmarks which depend on visitors to return to your site to read the newest updates). These two elements alone can drive significant traffic to your website, but there are other simple steps you can take to further enhance your blog’s reach.

Using free services such as TwitterFeed and Ping.fm, you can effortlessly syndicate the articles you publish to your Twitter page and Facebook wall (as well as countless other social networking sites) using your blog’s RSS feed. If you do not yet use Twitter and Facebook for your business, consider setting up accounts. These are two great methods for communicating with clients and prospects, while further spreading the word about your professional services through the power and reach of social networking.

As you know, DJ Intelligence is also fully integrated with MailChimp, a leading broadcast email provider, so you can send mass emails to your past, present, and future clients. Using your RSS feed, you can set up an “RSS-driven campaign” to automatically email your clients the day after you publish an article to your blog. This is another great way to stay in contact with your client base. If you do not yet use MailChimp to send broadcast emails, consider signing up and integrating with your DJ Intelligence account.

To find out the URL of your DJ Intelligence blog’s RSS feed, visit your blog’s home page and click on the “RSS” icon. The URL which appears in the address bar after you click the “RSS” icon will be the direct URL of your RSS feed. If you have any questions or need our assistance, please contact the DJ Intelligence support team anytime 24×7 at http://support.intelligenceinc.com

So the only question that remains is, what will you blog about? Share company news & information, author and publish articles pertaining to your company or industry, tell stories from past events, share client testimonials, or post any other important information you wish to share with your customers and potential customers. The possibilities are endless. If you do not yet use DJ Intelligence for your business, please sign up today and start reaping the rewards of blogging!

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Copyright 101: Licenses Required for Common Uses of Music on the Internet

This post discusses some of the common ways in which music is used on the Internet and the types of licenses required.  Please see my earlier post describing common music licenses.  A chart summarizing the licenses required for Internet uses is avaliabe here.

Music Downloads

Music downloads, which result in copies of the music being transferred to end users, implicate the copyright owners’ rights to reproduce and distribute the copyrighted music.  An example is iTunes.  Music downloads require master use licenses to cover the sound recordings and mechanical licenses to cover the musical works (the mechanical license could be secured through the Section 115 compulsory license exception).

Music publishers have taken the position that music downloads also constitute a public performance and, therefore, require a performance license.  However, on April 25, 2007, the U.S. District Court for the Southern District of New York ruled that music downloads are not public performances but, rather, just reproductions of the original song.  See U.S. v. ASCAP, 485 F. Supp. 2d 438 (S.D.N.Y. 2007); see also In re Cellco Partnership, 2009 WL 3294861 (S.D.N.Y. Oct. 14, 2009).

Recently, music publishers asked Congress to revise the copyright law to clarify that digital downloads implicate the public performance right.  Not only could this affect music downloads, but it also could affect downloads of movies and television shows.  This could be particularly significant given the potential shift of the public’s viewing habits from television (for which significant public performance fees are paid) to on-demand downloads to iPods and laptops (which are not now considered public performances). 

Podcasting

Music “podcasting” is a hybrid of streaming and music downloads.  Typically, “podcasts” are full-length radio programs that the end user downloads (either automatically or on demand) to their computer or mobile device, such as an iPod, MP3 player, or “smart” phone.  Like streaming, music “podcasts” can include multiple songs within the “podcast.”  But, unlike the transient nature of streaming, “podcasting” results in the end user having a copy of the entire program, including all music included in the program.  Because “podcasting” results in a copy, master use and mechanical licenses are required for “podcasting” songs.  In lieu of negotiating with the publisher, a mechanical license for the podcast of a musical work can be secured using the Section 115 compulsory license.  A master use license for a podcast must be voluntarily negotiated.  The performing rights organizations (ASCAP, BMI, and SESAC) have taken the position that “podcasting” involves a public performance, and, therefore, they offer “podcasting” licenses (but see U.S. v. ASCAP above).

Non-Interactive Internet Streaming (Internet Radio)

Unlike music downloads or podcasts, streaming does not result in permanent copies of songs being transferred to the listener.  Rather, streaming is transient and any resulting copies are typically only temporary cache or buffer copies (also known as “ephemeral” copies).  As such, master use and mechanical licenses are generally not required for streaming copyrighted music.  In general, all a non-interactive webcaster needs to stream copyrighted music are public performance streaming rights.  Streaming rights could be negotiated for each and every song to be streamed on a website.  However, “clearing houses” make the licensing process simpler for streaming.  In general, music publishers in the United States are members of ASCAP, BMI, and/or SESAC (collectively “PROs”), which offer public performance licenses (and collect and distribute royalties) for songs owned by their members.  As for the record companies, Section 114 of the Copyright Act provides a statutory (or “compulsory”) performance license that is automatically granted by operation of law, provided certain conditions are satisfied.  The statutory license is administered by an organization called SoundExchange, which collects and distributes streaming royalties to record companies and performers.  Licenses from ASCAP, BMI, SESAC, and the SoundExchange statutory license, unlike master use and mechanical licenses, are known as blanket licenses.  So, once these licenses are obtained, a website operator can stream most copyrighted songs without having to get individual licenses for each song.

ASCAP, BMI, and SESAC streaming licenses can be obtained directly from each PRO.  Standard on-premises PRO licenses that many establishments may already have generally do not cover streaming—rather, specific streaming licenses must be secured.  For permission to stream the widest possible catalog of music, webcasters should secure licenses from all three PROs.  Fees for these licenses are generally based on the number of listeners to the Internet stream and/or revenue generated in connection with the website.  For purposes of calculating fees, ASCAP, BMI, and SESAC licenses typically require periodic reporting of playlists, listenership data, and financial data.

Unlike PRO licenses, SoundExchange generally does not offer or negotiate a license agreement.  Rather, a webcaster just has to file a “Notice of Use” with the U.S. Copyright Office along with a $20.00 fee before it starts streaming.  Upon filing, a website is automatically entitled to the Section 114 statutory streaming license, provided the webcaster complies with the statutory conditions, including the following:   

• For a nonsubscription-based stream, the primary purpose of the webcast must be to provide to the public audio or other entertainment programming.
• The webcast cannot be interactive (that is, songs cannot be played “on demand” and songs cannot be played within one hour of a request or at a time designated by the listener).
• The webcast must include the information encoded in the sound recording by the copyright owner, such as the title, featured, artist, and other related information.
• The webcaster cannot, during any 3-hour period, play more than 3 sound recordings from one album (and no more than 2 songs played consecutively) or 4 sound recordings from the same artist or from any set or compilation.
• The webcaster cannot publish an advance program schedule or make a prior announcement of when specific songs will be played.
• The webcast cannot be part of an archived program of fewer than 5 hours duration, an archived program of 5 hours or greater in duration that is made available for a period exceeding 2 weeks, a continuous program fewer than 3 hours duration, or an identifiable program in which songs are played in a predetermined order (other than an archived or continuous program).
• The webcaster must file a “Notice of Use of Sound Recordings Under Statutory License” with the Copyright Office prior to commencing its transmission service.
• The webcaster generally must file monthly “Reports of Use of Sound Recordings” with SoundExchange containing certain information on all sound recordings performed during the month (referred to as “census” reporting).
• The webcaster must make monthly payments to SoundExchange at the statutory rate determined by the Copyright Royalty Board (which varies depending on the type of service provided).  SoundExchange, after deducting operating costs, disburses 50% of the collected royalties to the copyright owner (typically the record company), 45% to the featured recording artists, and 5% to the non-featured musicians and vocalists.  The statutory license fees were most recently established for the years 2006 through 2010 and have been very controversial, as they are significantly higher than the pre-2006 fees and are based on a model that drastically increases the cost of streaming music.  A new rate proceeding launched in 2009 will establish streaming fees for 2011 through 2015.  In lieu of the statutory license fees, SoundExchange has entered into settlement agreements/licenses with different groups of webcasters, including certain larger webcasters, noncommercial webcasters, college broadcasters, traditional over-the-air radio broadcasters, and certain “small webcasters.”  For example, the “small webcasters” license could be an attractive option if a website (and any of its affiliates in a media- or entertainment-related business) has total annual revenues of $5,000 or less and annual expenses of not more than $10,000.  In this case, the annual license fee is $500, and the webcaster can pay an additional annual fee of $100 to be exempt from having to file song usage reports. 

Streaming technology requires copies of sound recordings to be made on computer servers for purposes of facilitating a streaming transmission.  Such copies are generally covered as ephemeral recordings under the Section 112(e) compulsory license.  The royalty for Section 112(e) copies is included in the Section 114(d)(2) royalty (discussed above).

Server copies made in connection with streaming also include copies of musical works.  In light of The Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), some take the position that such temporary copies are not “copies” under the Copyright Act and thus do not require a license.  Relevant parties agree that non-interactive, audio-only streaming services do not require reproduction or distribution licenses from musical work owners. 

Interactive / On-Demand Streaming

Interactive or on-demand streaming services allow the listener to select and play any song on-demand.  Rhapsody and MySpace are examples.  Public performance and mechanical/master use licenses are required for these services.  With respect to the musical works, public performance licenses can be obtained from ASCAP, BMI, and SESAC, and mechanical license rights can be secured using the Section 115 compulsory license (while mechanical licenses are not required for non-interactive streaming, they are required for interactive streaming).  With respect to the sound recordings, the Section 114 public performance compulsory license does not apply, so both public performance licenses and master use licenses must be secured directly from the owners of the sound recordings. 

Limited or “Tethered” Downloads

Other services provide limited or “tethered” downloads, in which copies are made to user devices; however, the copies become unusable (or “expire”) after a certain period of time or when the user stops paying a service fee (and the copies may be usable only on certain devices).  With respect to the musical works, mechanical license rights covering the downloaded copies can be secured using the Section 115 compulsory license.   With respect to the sound recordings, licenses for the downloaded copies must be secured directly from the owners of the sound recordings.  Generally, limited or “tethered” downloads do not require performance royalties; however, some disagree (but see In re Cellco Partnership below).

Ringtones

Ringtones are digital copies of songs, typically around 30 seconds in duration, that are designed to be played on a mobile phone in order to signal an incoming call in the same manner as would a telephone ring.  Ringtones come from a variety of sources, but, most commonly, mobile phone customers download ringtones from their service providers, such as AT&T, Sprint, or Verizon.  Ringtones come in two types:  (1) synthesized (either monophonic, which have only a single melodic line, or polyphonic, which have both melody and harmony); and (2) mastertones (which are digital excerpts of sound recordings).  Synthesized ringtones only require a mechanical license to cover the musical work, while mastertones require both a mechanical license and a master use license to cover both the musical work and the sound recording.  In October 2006, the Register of Copyrights issued an opinion holding that both types of ringtones can qualify for the compulsory Section 115 license (to cover just the musical work) dependant upon whether the ringtone is simply a copy of the original musical work or whether the ringtone has recast, transformed, or adapted the original work in a way that takes it outside of the scope of the compulsory license.  See Docket No. RF 2006-1, U.S. Copyright Office, Oct. 16, 2006. 

Recently, the United States District Court for the Southern District of New York ruled that publishers are not entitled to public performance royalties for mobile phone ringtones.  See In re Cellco Partnership, 2009 WL 3294861 (S.D.N.Y. Oct 14, 2009).  For the past few years, publishers have argued that mobile phone carriers should pay copyright performance royalties when ringtones are downloaded and used by mobile phone customers.   The decision is not surprising as it comes on the heels of a 2006 decision by the Register of Copyrights that held that ringtones can qualify for the Section 115 compulsory mechanical license under the Copyright Act, which is only applicable for qualifying “private uses.”  The Register of Copyrights ruled that the primary purpose of ringtones is for private, not public uses.  See Docket No. RF 2006-1, U.S. Copyright Office, Oct. 16, 2006. 

Website Background Music

To use recorded copyrighted music as background music on a website, you need permission from both the musical work owner and sound recording owner.  Statutory compulsory licenses (such as Section 115) generally do not apply to website background music, since website background music involves incorporation of the music with images (or “synchronization”).  Permissions would need to cover both the required server copy and the public performance of the music on the website.

Web Videos

To use an existing sound recording in a web video, both a mechanical license from the publisher and a master use license from the record company are required.  Since web videos will involve the synchronization of music with images, these licenses should clearly grant synchronization rights.  Performance licenses are also required for videos played on websites, which for the musical works are typically secured from ASCAP, BMI, and SESAC as blanket licenses.  Note that for music videos, publishers typically permit the record companies to sublicense the underlying musical work, so in these cases, full permission to use music videos on a website may be secured directly from the record companies.

This post is the one in a series of posts discussing the basics of music copyright law.  This series of posts can be located by selecting the Blog category “Copyright 101.” 

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Copyright 101: Summary of Common Music Licenses

Like any other property, music copyrights and the individual exclusive rights thereof, can be transferred, sold, licensed, and divided among several owners.  In general, to use recorded copyrighted music, you will need permission from both the musical work owner (typically a publisher) and the sound recording owner (typically a record company).  Note, however, if you re-record a song (instead of using a pre-recorded version), permission is only required from the musical work owner (since you are not using someone else’s sound recording). 

Following are descriptions of common music licensing agreements.  In a later post,  I will discuss some of the specific ways in which music is used on the Internet and the types of licenses required. 

Mechanical Licenses:  This type of license authorizes the reproduction of a musical work, which is typically controlled by a music publisher.  For example, a record company will enter into a mechanical license agreement with a music publisher or other musical work owner to authorize the reproduction and distribution of a recording of the musical work.  As discussed in more detail below, mechanical license fees are generally governed by a statutory compulsory license under Section 115 of the Copyright Act for which fees are set by the Copyright Royalty Board.  In cases where the recording artist has written the musical work, the mechanical license fees paid by a record company will often be 75 percent of the statutory mechanical rate.  Often a mechanical license at the statutory rate can be secured through The Harry Fox Agency at www.harryfox.com.  The Harry Fox Agency represents music publishers by issuing a variation of the compulsory license and collecting and distributing royalties on the publishers’ behalf.  In the case where the compulsory license might not apply, say in the case of music used in a video, mechanical license fees can vary widely.

Section 115 Compulsory License:  The Section 115 compulsory (or statutory) license is a statutory exception to an exclusive copyright that permits anyone, subject to certain conditions and the payment of statutory license fees, to make certain uses of a copyrighted musical work without the copyright owner’s permission.  The Section 115 compulsory license permits a user to reproduce and distribute copies of nondramatic musical works, subject to certain conditions.  Such copies may include physical copies, including CDs and records, or copies made in connection with digital transmissions (defined as “digital phonorecord deliveries” or “DPDs”), including digital downloads, limited or “tethered” downloads, interactive streaming, and ringtones.  The conditions of the Section 115 license include the following:

• The copyright owner must have distributed the musical work to the public (that is, the copyright owner has the right to control the first use of a musical composition); 
• The user’s primary purpose must be to create and distribute “phonorecords” or DPDs to the public for private use (the use of the terms “phonorecords” and DPDs means that there is no compulsory license for audiovisual works); 
• The user may make a musical arrangement of the work to the extent necessary to conform it to the style or manner of interpretation of the performance involved, but the user may not change the basic melody or fundamental character of the work; 
• The use cannot involve the copying of a sound recording (unless separate permission is obtained from the owner of the sound recording); 
• The user must send a Notice of Intention to Obtain Compulsory License to the owner of the musical work before or within 30 days after making, and before distributing, copies of the work; and 
• The user must pay the musical work copyright owner (provided the owner has registered the musical work) the compulsory license royalty for each copy made and distributed.    The rates are set by the Copyright Royalty Board, which is composed of 3 full-time judges appointed by the Librarian of Congress who each serve staggered 6-year terms.  The statutory rate for physical copies and permanent downloads (or “DPDs”) is 9.1 cents or 1.75 cents per minute of playing time or fraction thereof, whichever amount is larger (the rate is 9.1 cents for a song of up to 5 minutes in duration).  For limited downloads and interactive streaming, in general, the royalty is 10.5 percent of revenue less the amount paid to ASCAP, BMI, and SESAC (see below) for performance royalties.  For non-interactive streaming, relevant parties have agreed that no Section 115 royalty is due.  For ringtones, the royalty is 24 cents per ringtone.

Master Use Licenses:  This type of license authorizes the reproduction of a sound recording, which is typically controlled by a record company.  For example, one would need a master use license to put together a compilation record of existing recordings, to use a “sample” of an existing recording in a new song, or to use an existing recording in a film.  There is no statutory compulsory license for the reproduction of sound recordings, so master use license fees can vary widely.   

Synchronization Licenses:  This type of license, also known as a “synch” license, authorizes the reproduction of a musical work to be used in connection with visual images, such as a motion picture, television show, or television commercial.  Again, synch license fees can vary widely.  And, keep in mind that synch licenses generally only cover the musical work.  If an existing sound recording is to be used in the new audiovisual work, a master use license is also required from the record company. 

Performance Licenses:  The performance of musical works, for example, by playing songs on the radio, on television, on a website, or in stores, restaurants, bars, and nightclubs, is generally permitted under performance licenses issued by the three performing rights organizations (“PROs”):  ASCAP (www.ascap.com), BMI (www.bmi.com), and SESAC (www.sesac.com).  On behalf of affiliated writers and publishers, PROs generally issue blanket performance licenses to music users, and license fees are based on a variety of factors.  For example, performance license fees for a restaurant will be based on the capacity of the restaurant, the number of speakers or televisions in the restaurant, whether customers are charged a fee, and the frequency with which music is played.  Performance licenses for the use of sound recordings are only necessary when the performance is via digital audio transmission, for example, Internet radio stations (note, however, that legislation is currently pending in Congress that would require traditional over-the-air radio stations to secure performance licenses for sound recordings).  In certain cases, the right to publicly perform a sound recording digitally can be secured through a compulsory license under Section 114 of the Copyright Act (which I’ll discuss in further detail in a later post), subject to the compulsory licensing requirements and fees.

Print (Lyric) Licensing:  This type of license, secured from the songwriter or music publisher, permits the re-printing of the lyrics to a song, for example, for karaoke CDs, sheet music, websites, T-shirts, and posters. 

Creative Commons Licensing:  Creative Commons licensing (www.creativecommons.org) is a relatively new form of licensing pursuant to which the copyright owner relinquishes various copyright protections to permit the open public use of a work under certain conditions.  For example, a Creative Commons license may permit the open use of a work provided that (1) credit is given to the author, (2) the use is for noncommercial purposes, and (3) any derivative work must be distributed under a license identical to the Creative Commons license that governs the original work.  Variations of Creative Commons licensing mix and match the preceding conditions (such as permitting any use, whether commercial or noncommercial, with only attribution, or permitting any use with attribution but with a prohibition on derivative works).  Creative Commons has been credited by some musicians as a way to help gain wide distribution by getting their music out to the public for free.  Of course, however, once certain rights are relinquished under Creative Commons, those rights cannot be restored back to the original copyright owner.

This post is the one in a series of posts discussing the basics of music copyright law.  This series of posts can be located by selecting the Blog category “Copyright 101.” 

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