The world of business is more similar to the world of music than you might think. True, while one is built on art and creativity, the other is the opposite of those attributes. When it comes to using music for marketing your business, there’s actually quite a lot the two have in common.
Ultimately, both come down to providing value. Music provides value in its enjoyment and the emotions it evokes, making people feel happy or sad. Businesses offer value to customers by providing them with products or access to services that save them time or make their work more satisfying and successful.
This value applies both ways, too, and when it comes to business music licensing terms in the context of music and media, it’s essential to understand that music is a product with natural copyrights associated with it.
If you’re looking to use music or other assets or materials to promote, advertise, or market yourself or your business, you’ll need to properly license said assets to use them for any commercial purposes. To go over how this works, let’s dive into the nitty-gritty of it all below.
What is business music licensing?
To discuss business music licensing, we’ll need to go over some basics of intellectual property. Intellectual property (or IP for short) is a work or invention that is produced by the result of a creative process. Examples of intellectual property include patents and schematics, screenplays, and—yes—even music.
However, unlike some other types of IP, which can often be more cut-and-dry, music is a bit more confusing. This is because music licensing for business involves several kinds of copyrights.
To license a song to use in the promotion of your business or brand, one would need to properly secure the following different types of copyright:
Mechanical Music Rights
Starting with the most complicated one (mainly because it comes from a bygone era in the music industry), mechanical royalties are paid whenever a copy of a song is created and sold. The traditional example of this would be a vinyl record pressing, a CD being manufactured, or now a digital file being downloaded. In modern times, this mechanical royalty now extends to streaming. This means that a royalty is paid every time a song is streamed.
Performance Rights
This type of royalty is pretty straightforward and is paid whenever a song is played in public. Some main examples of performance royalties would be when a song is played in a coffee shop or bar, when a song is used in a TV show or film, or when a song is played on the radio.
Music Sync Licensing
Now, while performance royalties overlap here a little bit, upfront sync fees are paid whenever a song is used in a visual medium like a TV show, a movie, a video game, an advertisement, etc… And it’s not just one fee but two, as traditionally, the master owner and the publisher both receive sync fees—usually in the same amount. You can find more info on sync licensing on our blog.
If you’re looking for more info, you can read deeper into different types of music rights and royalties here, a helpful article that covers how to understand master, common, and music publishing rights in song ownership.
Why music licensing for your business matters
Now that we’ve covered what business music licensing is and how it works with music in particular, let’s go over why licensing for your business matters. The big headline here is that properly licensing music or other assets for your business is crucial if you’d like to avoid lawsuits, fines, and DMCA takedown notices.
There’s also the issue of indemnity, a contract law term that essentially means a contractual obligation of one party to compensate for the loss incurred by another party.
In music licensing, if you fail to legally license and retain the rights to use music (or any other assets for that matter) in any videos or content for your company or brand, you could be liable for any losses incurred by the indemnitee or the person you created the content for. The original copyright owner would have an infringement claim against both indemnitor and indemnitee.
To avoid these pitfalls, here’s a complete guide that covers the question of “what is indemnification” and outlines Soundstripe’s key legal protections as part of the Enterprise plan.
We should also note that it’s not all scare tactics here. Properly licensing high-quality music from resources like Soundstripe can elevate your branding and demonstrate responsibility, while also providing you with fully protected access to Soundstripe’s diverse library of music and sound effects, without the worry of copyright claims.
Key licensing terms businesses should know
As mentioned above, let’s double-click into some key licensing terms businesses should know. Here are some basic definitions for business music licensing that you might find when looking to license music or other assets for your brand, including copyright license types that determine how and where music can be used.
- Royalty-Free vs. Rights-Managed: Differences and what works best for small vs. enterprise-level businesses.
- Synchronization License (Sync License): Required for pairing music with video.
- Public Performance License: Needed for broadcasting or in-store music.
- Master Use Rights: Permission to use a specific recording.
- Commercial Use Terms: Why business use differs from personal use.
You can read much more in-depth regarding these licensing terms for your businesses on the websites for the Copyright Alliance and other performance rights organizations (PROs) like ASCAP and BMI.
How Soundstripe simplifies business music licensing
If any of the above is still unclear, we understand. We’re experts in music licensing, and we see businesses, both big and small, struggle with understanding this complex industry. But fret not! We’re also well-equipped to help you navigate the world of business music licensing with our subscription model and single-song licensing options.
For most businesses, an enterprise plan will be your best option to obtain pre-cleared music, global coverage, and commercial-ready licensing, along with support that’s built to scale with your growing needs.
You can read more about Soundstripe’s Enterprise plan here, which goes over how to license unlimited music, sound effects, and video with legal peace of mind.
Best practices for businesses
Finally, to wrap things up, let’s review some best practices for businesses seeking to license music or other assets for their videos or other marketing materials.
The first tip is to always review license agreements before using them. Just because you think something will be one way, you don’t truly know until you read the fine print—something that is especially true with the complex nature of music licensing.
Our second tip is to educate your internal teams about licensing compliance, specifically the dramatic repercussions that your business could face if you don’t take business music licensing seriously.
And our final tip is, of course, to find a reputable licensing provider with whom you can partner that you can trust. We hope that your choice will be Soundstripe, but we recommend doing your own research, exploring the options, and—most importantly—listening to some tunes to see what resonates with you and your business.
