Businesses that play music as an integral part of their business model must pay licensing fees back to artists. As they should! Blanket licenses are a more efficient way of issuing licenses to businesses that use a lot of music, because it covers all music.
Blanket licenses are an important part of the overall licensing scheme for artists too.
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What Is A Blanket License In Music?
In short, a blank license is a single license given to a music user (e.g. a radio station, or TV company). This license allows them to use the music in any form, rather than get individual licenses such as sync licenses and mechanical licenses etc. This makes it easier for the music user, as getting individual licenses can be difficult and time consuming.
While that's the basics of it, you'll probably want to read the rest of this article for full details of how this fits into things as a whole. First, you need to have a basic understanding of how your performance rights work to start with.
Understanding The Licensing Process
When you start writing original songs, you should join a Performing Rights Organization (PRO) to register your works. This could be ASCAP, BMI, SESAC, SOCAN, or whatever the equivalent is in your country.
See more about ASCAP here.
For more information on the differences between these organizations, check out our guide on Performing Rights Organizations.
Both publishers and songwriters join PROs to register the works they represent.
Songwriters can only join one PRO and must register all of their work with the same PRO over the years.
Publishers are usually a part of every PRO so they can claim their 50% share of the work they represent.
Now, if you're an indie artist, you are both the publisher and the songwriter. Unless you have signed away your publishing rights in a record deal or a publishing deal, you own 100% of the song.
If a movie or TV show licenses your song to be used in their program, they would have to pay a set licensing fee (usually negotiated by management or by and artist’s publishing company) to own that license.
Half of the license fee goes to the songwriter and half to the publisher. Again, if you’re both the writer and publisher, then you keep the entire fee.
The principal reason people sign away their publishing rights is to get more opportunities for licensing and placements. Publishing companies want to make money on their catalogue, so they actively seek out opportunities for the material they represent to be placed.
Any time your song is played live, played on the radio, played in a TV show, movie, or used in a commercial, or is otherwise performed live, you are owed performance royalties.
Why PROs Issue Blanket Licenses
PROs control how licensing fees are paid out, so they get to issue blanket licenses.
A group or business (for simplicity, let's say a radio station) will go to a PRO and apply for a blanket license to play music that is represented by that PRO.
The PRO will charge a fee to issue the blanket license, but then the business can use all the music represented by that PRO. A radio station most likely has blanket licenses from several PROs so they can play whatever music they want to play.
In countries like Canada, you only need one blanket license, as there is only one PRO representing Canadian works (SOCAN).
Believe it or not, blanket licenses also apply to live performance venues.
Any venue that is making money off of live performances in their space must pay a blanket license to have music performed there. Some artists are not aware that they can register their set lists with a PRO and get paid for their performances – on top of the money they already made on the show.
This is because venues pay a blanket licensing fee. Your live performance fee is paid out of this.
Even businesses like coffee shops and department stores pay a licensing fee to play music in their stores. PROs use all of these revenue streams to pay out royalties to songwriters.
Once a blanket license is issued, the recipient must comply with reporting and tracking requirements. For radio stations, this means submitting their playlists. Most live venues just make artists do this themselves.
Some festivals require artists to submit their set lists at the end of the festival, and will submit the set lists to the PROs for them.
How music is reported and tracked changes based on what the business does, how the music is being used, etc.
What Is A Blanket License In Music (In Summary)
To sum up what we’ve learned here today:
- Every song has two parts to its royalties; the songwriter’s 50% and the publisher’s 50%.
- Songs must be registered with a PRO for the PRO to collect the royalties on that song.
- Businesses and groups using a song for money must purchase a license for the song.
- The licensing fee is then split between the songwriter and publisher.
- Groups can purchase blanket licenses from PROs to have the license to play whatever song they want from that PROs' catalog.
- For this reason, radio stations and the like must purchase multiple blanket licenses to have access to any song that's released.
- Fees from blanket licenses go directly towards paying royalties to artists.