So you want to start a music podcast. Or, maybe a music webcast. Regardless of which format you choose, you’ll need to acquaint yourself with copyright law and licensing. But how easy it is to license the content you desire varies greatly on whether you opt for a podcast, where users download your episodes (much more difficult to license), or a webcast, where users stream your content online, but cannot download it to their listening devices (much easier to license, but still potentially complicated).
The Exclusive Rights of a Copyright Owner
First, if you own a copyright in a song, then according to § 106 of the Copyright Act of 1976, you have the exclusive right to: (1) reproduce it; (2) distribute it to the public; (3) perform it publicly; and (4) perform it publicly by means of “digital audio transmission.” Each of these exclusive rights can be licensed to the same or different entities. For example, perhaps Ted has the exclusive right to reproduce and distribute a song, while Jane has the exclusive right to perform it publicly. What this means is that if your use of a song touches upon more than one of the exclusive rights, then you may need to obtain licenses from more than one entity. As we shall see below, the mechanisms you must use to license each of the exclusive rights varies greatly depending on the use to which you are putting the song. To make matters more confusing, whether a given right is triggered isn’t always immediately clear based on that use.
Two Copyrights, One Song
The licensing regime would be complicated enough if each recorded song was comprised of only one copyright; but instead, each recorded song is comprised of two copyrights: the musical composition copyright, i.e., the music and the lyrics, and the sound recording copyright, i.e., the recorded performance of the musical composition. The musical composition copyright initially vests in the writers of the song, and the sound recording copyright initially vests in the person or entity that records the song. But often, the songwriter’s right to the musical composition copyright is transferred to a publishing company, while the right to the sound recording copyright is transferred to the record label or distributor that releases the song.
What Does This Mean for Licensing?
Depending on the specific use to which you are putting the song, you may need to obtain as many as four different licenses, likely from four different entities, using different licensing mechanisms (i.e., direct license, bulk license, compulsory license). Each of these potential licenses is discussed in detail below.
(1) License to Publicly Perform a Musical Composition
The exclusive right of public performance is implicated whenever a musical composition is performed. Often, songwriters assign this exclusive right to third-party publishing companies, which are entities that specialize in exploiting this right.
One way that publishing companies do that is by further authorizing one of the three performing rights organizations (“PROs”), e.g., ASCAP, BMI, or SESAC, to issue licenses for public performances of the composition. To facilitate the process, these PROs offer bulk licensing packages to both podcasters and webcasters. That means that you can license every song in each PROs catalog by obtaining one of these so-called “blanket” licenses. If you’re careful, then you may only have to obtain one or two blanket licenses, but unless you’re committed to checking each song and making sure that it’s covered by the blanket license that you do have, you may want to go ahead and secure all three blanket licenses, one from each of the PROs, renewed annually. The PROs typically charge a combination of a rate based on a percentage of revenue and/or a per-session fee, with a minimum yearly payment of somewhere between $100 an $300.
(2) License to Reproduce and Distribute a Musical Composition
Publishing companies also typically further authorize entities called “collective rights management agencies,” like The Harry Fox Agency (“HFA”), to issue so-called “mechanical licenses,” which provide licensees with the ability to reproduce and distribute musical compositions. The current rate for such a license from HFA is 9.1 cents per download for songs up to five minutes in length. If your podcast includes a song that lasts four minutes, and the podcast is downloaded 1,n000 times, then you’d owe $91 dollars to HFA, plus the HFA per song processing fee (approximately $8 – $10).
If you want to avoid going through HFA, or if the rights you need to license aren’t administered by HFA, then you can obtain pretty much the same license yourself by following the procedures of 17 U.S.C. § 115, which provides potential licensees with something called a compulsory license. “Compulsory” means that it’s an involuntary license – so long as you comply with the restrictions set forth in the statute (like the notification requirements), you can distribute the musical composition copyright without (much) further ado. The rate that you pay for this privilege is set by statute, and is, not coincidentally, 9.1 cents per download for songs up to five minutes in length.
(3) A License to Publicly Perform (by digital audio transmission) the Sound Recording Copyright
Now things start to get a little bit more complicated. First, note the awkward inclusion of the phrase “by digital audio transmission.” This language is required because there is currently no exclusive right to publicly perform a sound recording on terrestrial radio, i.e., AM/FM radio. If you hear “Crazy” by Patsy Cline, for example, then Willie Nelson, the songwriter, gets paid but neither Patsy Cline nor her record label get paid. Conversely, although it makes no sense these days to differentiate between the two, you must obtain a license to perform a sound recording via digital audio transmission. When a sound recording is played via digital audio transmission, e.g., SiriusXM, Pandora, etc., then, yes, Willie Nelson gets paid, but so does Patsy Cline. And her record label. Even the session players on the song get paid. That’s a much better and fairer system.
But I digress.
As stated above, the sound recording copyright lies in the recorded version of the musical composition. Similar to the copyright in the musical composition, the artist typically doesn’t retain the copyright in the sound recording unless the artist self-releases. Instead, the copyright in the sound recording is usually transferred to the record label. Unfortunately, obtaining the right to use a sound recording is much more complicated than the process for obtaining the right to use the musical composition. The kind of license you need to use a sound recording depends on the nature of that use.
Interactive Podcast and Webcasts
If you are making a digital transmission that is interactive, meaning a listener can select which song they want to listen to on demand (think Spotify), then you must obtain permission straight from the source – i.e., the owner of the sound recording copyright, which, again, is usually the record label. To play 12 songs in an interactive service, you’d potentially need 12 direct licenses, each one likely subject to different terms and rates, and if one copyright owner or administrator doesn’t want you to use the sound recording, then they have the power to just say no because there is no statutory license available.
However, if your webcast is non-interactive, meaning you select the songs and your listeners can’t (think Pandora), then you may be eligible for a statutory license, which is another compulsory license like the one we discussed in reference to the license to distribute a musical composition. But in this case, an entity called SoundExchange has been designated by Congress to administer the statutory license, and to qualify for it, you must strictly abide by the requirements set forth in 17 U.S.C. § 114(d)(2), which are numerous and designed to ensure, among other things, that your service isn’t actually interactive and doesn’t trigger any of the other exclusive rights.
For example, one of the rules is that your playlist can’t be announced in advance. Seems bizarre, but the rule is designed to prevent people from being able to listen to a song when they want to, which would be a hallmark of an interactive service. If the playlist is archived on the site, then the playlist still can’t be displayed, even though the original airing has passed, because the playlist then functions as an advance notice of what’s contained in the podcast. Another example is 17 U.S.C. § 114 (d)(2)(C)(iii)(I) and (II), which stipulates that previously aired programs that are posted on a website must be at least five hours in duration and may not reside on a website for more than two weeks, because otherwise a user would have access to on-demand music – whenever they wanted to hear a song, they’d just go to the archived playlist.
There’s rhyme and reason behind these rules, and you should know what they are because the Recording Industry Association of America (“RIAA”) will enforce them.
There’s no statutory license here. Regardless of whether the podcast is interactive or non-interactive, podcasters must obtain direct licenses, which for the huge majority of podcasts is a nonstarter, at least if you decide that your podcast requires this license in the first place, i.e., that a public performance is occurring when your listeners download your podcast, and that you want to try to go legal by obtaining these licenses.
(4) License to Reproduce and Distribute a Sound Recording
Finally, the thorniest license of the bunch, and in fact the license that pretty much sounds the death knell for podcasts that want to try to go legal. If you want to reproduce and distribute a sound recording copyright, then you will need a master use license from the owner of that copyright, which is typically the record label or distributor, unless the songwriter has self-released the song. This is a direct license, which is the opposite of the compulsory licenses we’ve discussed above. There is also no collective rights agency that administers these rights for the various parties. Instead, if you want to reproduce and distribute a sound recording, then you need a direct license to do so.
How Does Whether I Podcast or Webcast Affect Anything?
If you are podcasting, then you are almost certainly reproducing and distributing musical compositions and sound recordings, because your listeners are downloading your podcasts, which means that you’d need to procure the licenses described in (2) and (4).
But if you’re making a podcast available for download by individual listeners, then are you publicly performing the musical composition and the sound recording? After all, your podcast is theoretically only going out to individual listeners. But the word “theoretical” in the previous sentence is key. Although there is actually some legitimate debate on this point, you should know that the entities that control the exclusive rights of public performance described in (1) and (3) above have pretty universally adopted the position that a podcast does trigger these rights. Therefore, if you don’t obtain these licenses, then you may receive a nasty letter from those entities. Really though, deciding whether to comply with (1) and (3) isn’t necessarily your biggest problem as a podcaster, it’s knowing that you have to obtain the direct license described in (4).
The sad recap here is that if you’re a podcaster with little to no budget or clout, then you pretty much cannot play copyright protected songs in your podcast, because if you do, you may have to obtain all of the licenses described in this article.
That was a bummer, but what about webcasting? Here, it’s actually simpler, which is why webcasting, if you fit within the parameters of the licenses, is much easier to legally do than podcast. Webcasters are pretty clearly publicly performing songs, because webcasts are essentially like radio broadcasts except over the internet, so the licenses described in (1) and (3) are required here. Remember that those are the licenses that are subject to blanket and compulsory licenses, so licensing those rights is relatively simple.
But does a webcast also reproduce and/or distribute musical compositions and/or sound recordings? Sure, a podcast is pretty clearly a distribution, as listeners typically download the podcast onto their listening devices, but webcast listeners don’t download anything – the entire program is streamed online. Although copyright owners and administrators likely have some creative arguments here, i.e., that placing the songs into a webcast is itself a reproduction and/or distribution of the song, webcasters likely don’t need to procure the licenses described in (2) and (4) above, which is huge, particularly with regard to (4), because it means that webcasters don’t have to procure master use licenses from each record label that owns or administers the sound recording copyright.
Want to toss caution to the wind and proceed without any licenses? Depending on the size of your following and presence online, you may succeed for awhile. But eventually, the RIAA and copyright owners and administrators will come knocking, and when they do, they may give you a chance to obtain the appropriate licenses, or they may – depending on how egregious the offense – simply file a lawsuit against you, seeking damages and injunctions for the direct infringement, and potentially the contributory and vicarious infringement of copyright, if your service enables the infringement of others. Damages for copyright infringement can range up to $30,000 for each unauthorized use, or up to $150,000 if the infringement is willful.
For podcasters in particular, the above licensing regime pretty much prevents them from incorporating music into their programs. For webcasters, the process is easier, but copyright owners and administrators still sometimes engage in over-enforcement of copyright, and demand licenses for uses of copyrights that shouldn’t be required. Plus, to ensure that they qualify for the statutory license administered by SoundExchange, webcasters must remember to comply with the stringent requirements of that license.
The podcast and webcast communities, and in fact the music community in general, would benefit enormously from congressional clarification of which rights are implicated based on a given use of a song in a podcast or webcast, and the creation of some sort of streamlined marketplace where podcasters and, if so designed by Congress, webcasters, can easily procure bulk licenses for each of the implicated exclusive rights.
Until then, it’s a minefield out there, particularly for podcasters. Tread carefully. Got any questions? As always, feel free to contact us.
 These are the exclusive rights that apply to recorded songs; the full list is available at 17 U.S.C. § 106.
 Although we won’t delve into it here, it’s worth noting that federal protection of sound recordings only applies to recordings made after 1971. If earlier, then, confusingly, state common law copyright may apply.
 Songs lasting longer than five minutes are licensed at a different rate.
 Note that I only said “podcast” here. That’s because, as discussed below, arguably webcasting doesn’t implicate these rights.
 Although parties can negotiate around this statutory rate it if they so desire.
 Of course, you could try to strike a bulk deal with the major labels, which own or administer a quite large number of these rights, but unless you’re Spotify or Beats Music…good luck with that.