Music Licensing is the process through which television outlets and producers acquire permission to use copyrighted music in their programming and productions. A music copyright actually consists of a bundle of ownership rights. The four principal parts of this bundle are: (1) the Publication Right, authority to copy or publish the musical work; (2) the Mechanical (Recording) Right, authority to make audio copies of the work; (3) the Synchronization Right, authority to synchronize recordings of the work with film or video; and (4) the Performance Right, authority to perform the work publicly. Two additional facets of music copyright are (5) Grand Dramatic Rights, which involve the use of the composition in a dramatic performance such as a stage play, opera or video representation of the "story" of a song; and (6) the Master Use License (Dubbing Right), which pertains to the re-recording of a particular artist's rendition of the music. The first five of these rights emanate from the original composer and publisher of the work. The Master Use License is held by the record company that released the particular artist's interpretation of the composition.

While all six of these elements may come into play in the production of a film or video project, it is the Performance Right that is of overwhelming importance in the public transmission of television programming. In the United States (and elsewhere through agreements with reciprocal agencies), three licensing organizations administer performance rights for virtually all musical compositions still under copyright. These three organizations are ASCAP (American Society of Composers, Authors and Publishers), BMI (Broadcast Music Incorporated) and the much smaller SESAC (formerly the Society of European Stage Authors and Composers).

ASCAP, the oldest of the three, was born of a 1913 restaurant meeting of composer Victor Herbert and eight publisher and composer associates who sought some mechanism to ensure they would be paid for the public performance of their work. ASCAP began licensing broadcast stations to play the music of its member composers and publishers in 1923 when it signed a one-year $500 license with AT and T's WEAF (New York). Perceiving themselves to be at ASCAP's mercy when it came to the use of music in their programming, broadcasters formed the National Association of Broadcasters (NAB) to negotiate with ASCAP on behalf of the entire radio industry. (The NAB subsequently became U.S. commercial broadcasting's major trade association and lobbying agency.)

BMI was created by the broadcast industry in 1940 in reaction to what stations felt was a large and unjustified increase in ASCAP's licensing rates. Until BMI could build its own catalogue, many stations that had refused to renew their ASCAP licenses could play nothing but tunes by Stephen Foster and other vintage music no longer under copyright. BMI soon signed affiliation agreements with Latin American, country, western, "race music" (black), and later, rock and roll composers--musical genres that ASCAP had largely ignored.

SESAC was founded in 1931 by music publishing executive Paul Heinecke, with a catalogue consisting primarily of European concert and operatic music. SESAC later dropped its full name in favor of the acronymn and expanded its scope to encompass concert band, gospel, religious, and country music--opening a major office in Nashville in 1964. SESAC is the only one of the three performance rights organizations to also administer the mechanical and synchronization rights on behalf of its member composers and publishers.

Virtually from its inception, radio performance rights licensing was accommodated via a "blanket license." Stations paid the rights agency an annual fee based either on gross receipts (ASCAP and BMI) or market size, power, and hours of operation (SESAC). This license allowed them to play as much of the licensing organization's music as they wished. This same business arrangement subsequently was extended to the new medium of television. As in radio, television station rate negotiations with ASCAP and BMI are handled by an all-industry committee supported by voluntary station contributions. Because far less SESAC music is played, the dollars it receives are much lower and stations deal with it separately.

Since 1950, the broadcast television networks have secured their own blanket licenses for the music in the programming and commercials that they distribute to their affiliates. Even if they are network affiliates, stations still have needed their own blanket licenses to cover the music included in the syndicated series, local programs, and non-network commercials that they air. Over the past quarter-century, broadcasters fought a number of legal battles in an attempt to reduce overlapping license coverage and bring greater flexibility and economy to the performance rights clearance process. In 1970, CBS initiated an anti-trust suit against ASCAP and BMI in order to secure the option of a "per use" alternative to the blanket license. But the Supreme Court reaffirmed the dismissal of the case in 1981. Four years later, television stations lost a similar skirmish over "per program" rates that tended to make this option far more costly than the blanket license.

Nevertheless, new licensing alternatives began to emerge. Following a series of legal manuevers, ASCAP/BMI and television broadcasters began, in 1987, to negotiate a more economically realistic per program license option. Six years and several judicial proceedings later, a feasible per program license structure was substantially agreed to. This paved the way for stations to more actively purchase or lease their own music libraries for use in local productions and commercials--thus greatly shortening the list of programs for which they would have to pay an ASCAP or BMI fee. At the same time, major program syndicators such as King World began selling stations the rights to the music contained in their series for a small additional fee. Such "source cleared" deals are expected to become more and more common as stations seek to further reduce their ASCAP and BMI per program payments. Meanwhile, in a 1992 cable television decision, the Supreme Court affirmed the right of cable networks to obtain the same blanket "through to the viewer" license that had been available to the broadcast networks since 1950. This greatly lessened the performance rights liability of cable system operators.

An additional simmering controversy involves musicians and some recording companies. These interests sporadically have lobbied Congress to enact legislation that would require an additional performance rights fee to be paid to the performers of a piece of music. The television industry counters that performers already have been compensated through existing rights mechanisms and have handsomely profitted from the exposure with which television has provided them.

-Peter B. Orlik