Understanding Royalty Free Music: A Slice of Royalty Pie

From my previous post you should now have an understanding of the concept of copyright & music licensing. This post will explain how copyright is broken down into areas, its implications on music licensing for new media developers and how royalty free music emerged.

Think of music royalty income as a pie that can be divided into several portions. There can be few or many people claiming ownership / income from the same pot of money. The mainstream music industry has many people who demand a share and therefore licensing music can be complex. Mainstream music is also very expensive to license and there are typically many parties controlling different aspects of the musical copyright. For example, there is copyright in composition, recording, musical score, arrangement and lyrics.

From the perspective of a media creator looking to license a piece of music, there are 3 main licensing aspects to consider. These are Synchronisation, Mechanical and Performance, illustrated in the graphic below.

There are a number of interpretations of what mechanical / performance use is, and this has become more open to interpretation as internet use has increased. Adding to this complication is the fact that many countries have differing copyright legislation.

The Establishment

Please keep in mind music licensing policies were developed from about the 1930’s onwards based around copyright legislation of the day. At the time, the major labels income was the focus and instant global distribution and home recording studios were inconceivable. Since then, things have really changed, but music licensing and copyright principles are largely the same with numerous quick fix patches to accommodate new media types and usages. The reason I mention this is because it has become the foundation for all music licensing available today.

Even though royalty free music licensing is a separate section of the music industry, the historic development currently defines how all music licenses work in relation to localised copyright law. There are a few exceptions, for example, Creative Commons is a fairly new movement that approaches music licensing with a modern perspective. To quote their website “We provide free licenses and other legal tools to mark creative work with the freedom the creator wants it to carry, so others can share, remix, use commercially, or any combination thereof. “

Squeezing new business models into the shoes of old ones can cause problems for the very people copyright law is trying to protect. More about this later in this series.

Bringing it together

Based on the three main copyright areas: synchronisation, mechanical and performance, the mainstream industry uses publishers, and royalty collecting societies to collect income through licensing. This means there are lots of commercially interested parties expecting a slice of the pie.

With the monetary expectations of all involved and the popularity of mainstream music, this can be drawn out and prohibitively expensive for the licensee.

Today, with non-mainstream independent music, there is typically one copyright owner, the composer / producer.

Some years ago, somebody realised that non-mainstream music could bypass the usual channels making music licensing quicker, simpler and cheaper. This unknown entrepreneur coined the phrase ‘royalty free music‘.

The overall principle of royalty free music is to buy-out some or all of the rights in a one-time payment, which is relatively easy to achieve when there is no involvement from the mainstream music industry.

As this represented a quicker lower cost alternative to music licensing, it became very popular and the term ‘Royalty Free Music’ has become an industry recognised term.

This is not the end of the story though… the term ‘Royalty Free Music’ is often misunderstood and misinterpreted.

To be continued…

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I look forward to your comments and if you know anything about the origins of royalty free music, I would be interested in hearing from you 🙂

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