Learning Music Licensing

By Elizabeth T Russell

Music infiltrates even the quietest respites of museums, whether it's muzak in the elevators, an audio tour of an exhibition or a live concert in the galleries. Though such interludes can enhance visitors' museum experience, they can complicate things for staff who must contend with the complex system of music licensing. Luckily, reviewing a few basic principles, outlined below, can make this a much more . . . harmonious process.

If your museum struggles with issues surrounding its use of music, start with AAM's Information Center Fact Sheet: Music Licensing for Museums. It's a great reference. Before launching into our discussion, though, let's make sure we're all starting from the same gate. Music licensing is copyright, pure and simple. We all need to have a basic understanding of copyright law to tackle the issue productively.

The following types of work are eligible for protection under United States copyright law: literary works; musical works, including any accompanying words; dramatic works, including any accompanying music; pantomimes and choreographic works; pictorial, graphic and sculptural works; motion pictures and other audiovisual works; sound recordings; and architectural works. The law calls work in any of these categories a "work of authorship."

Note that "musical works" and "sound recordings" are completely separate works of authorship. A musical work is a composition. It's what the songwriter wrote, and it can be depicted on score paper. A sound recording, on the other hand, is the work that results from "the fixation of a series of musical, spoken or other sounds." In the case of music, it is the particular recording—fixed by the performers and the recording engineers—of a musical work.

When you pick up a CD and wish to use it for a particular purpose, you therefore almost always need two separate licenses: one for the sound recording and one for the musical work embodied on the sound recording.

The next important concept is what one "gets" with a copyright. The answer: a bundle of six independent, exclusive rights:

1.   Reproduction
2.   Adaptation
3.   Distribution
4.   Public performance
5.   Public display
6.   Public performance by digital audio transmission (sound recordings only)

So, each copyrightable "work of authorship" receives this bundle of six exclusive rights.

Well, almost. The law has a few exceptions. Sound recordings, for example, don't receive rights #4 or #5 from the bundle. This is significant because #4—the right of public performance—is a key concern for museums.

Let's think about both musical works and sound recordings, each of which receives its own separate bundle of rights. Without a license from the copyright owner, can you reproduce a musical work or a sound recording? No, because both musical works and sound recordings enjoy right #1. Can you create a derivative work (i.e., an adaptation) of a musical work or a sound recording? No, because they both enjoy #2. Same with #3: You cannot distribute copies of either.

Can you publicly perform a musical work without a license? No, because of right #4. Now get ready for the exception. Can you publicly perform a sound recording without a license? Yes, you can, because right #4 does not extend to sound recordings. The only exception to this is the limited public performance right for sound recordings set forth in #6: the right to public performance by means of digital audio transmission. "Digital audio transmission" essentially refers to satellite, cable and webcasts. If you're publicly performing a sound recording via any such digital delivery method, you need a performance license.

In summary, to play a CD "live" in your museum, you need a public performance license for the musical work, but not for the sound recording. If you play that same CD via webcast, you need a public performance license for the musical work and for the sound recording.

That brings us to the performing rights societies (PRS). Let's say you're a composer. You hold the copyright in a musical work. You live in Montana. How on earth are you going to know if a band or a restaurant or a museum in Alabama publicly performs that musical work? Copyright law (right #4 from the bundle) says nobody can publicly perform your musical work without a license—but if you have no way of knowing, how can you enforce your rights? You can't. That's why you affiliate with a PRS.

We have three main PRSs in the United States: ASCAP, BMI and SESAC. Musical work copyright owners—composers and music publishers—affiliate with one of these three. Accordingly, each PRS has a repertoire comprising all of its affiliates' registered compositions. Each PRS collects public performance royalty fees from venues, including museums, that publicly perform the compositions in its repertoire. Through a series of complicated formulas, the PRS then distributes those fees to its affiliates, who thus get paid for public performances of their works.

The PRS's scope is extremely limited. They collect license fees only for musical works. And for each musical work, they only license one of the six rights on the bundle: #4, the right of public performance. So, if you want to use something other than a musical work, or if, with respect to a musical work, you want to exercise a right other than #4, the PRSs have no authority and you must deal directly with the copyright owner to obtain the licenses you need.

It's a myth that local musicians are not covered by the PRSs. Almost all composers and publishers choose to affiliate with a PRS, including your small-town neighbors. But a copyright owner's PRS affiliation is nonexclusive. This means that, even though the PRS has authority to license public performances of its affiliates' works, the affiliates themselves can grant public performance licenses directly to users. So, if you wish to perform a composition written by a local composer, the composer can grant you a direct license to do so even though he or she is represented by a PRS, so long as the PRS is notified.

Striking a Balance
As stated in the United States Constitution, copyright laws must balance the rights of the author and the rights of the public. The purpose of copyright is to promote the creation of material that will benefit the public. That's why copyright protection doesn't last forever. Once the applicable period expires, copyrighted material passes into the public domain and it's free to use. The other side of this coin, however, is that—as an economic incentive for authors to create—we need to provide a period during which an author may enjoy exclusive rights to his/her material.

The continuing relevance of this model is the focus of heated debate, as technology outpaces copyright law. Though that debate is beyond this article's scope, it is important to mention because it frames the music licensing challenge for museums: How can museums secure affordable access to music and still provide fair and reasonable compensation for composers?

They can start by knowing (and respecting) when a license is required. There are four scenarios in which you can use material without a license: if the material is not subject to copyright protection at all; if you own and control the copyright yourself; if a statutory exception applies to your proposed use; or if your use of the material would constitute "fair use." If none of the above applies, you need a license. Period.

Don't rely on fair use. Despite all the myths, there is no bright-line rule about how fair use is defined. And you don't get a free pass just because you're a nonprofit. Fair use requires balancing four factors: the purpose and character of the use, including whether it is of a commercial nature or for nonprofit educational purposes; the nature of the copyrighted work; the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and the effect of the use upon the potential market for or value of the copyrighted work.

Sure, the first factor considers whether your use is for nonprofit educational purposes. But that's just one part of one factor to be considered. In each individual case, a judge or jury must weigh and balance each of the four factors against the realities of your use. Sometimes a judge will put more weight on one factor and almost none on the others. You never know. Every case is different, and seemingly identical cases with different judges often yield opposite results. It is my personal opinion that most uses of music by museums would not qualify as fair use once all the factors are balanced. So if you're relying on fair use as your justification for not licensing music, make sure you've reviewed your position thoroughly with counsel.

A much more comfortable situation is finding a statutory exception that would permit your proposed use without a license from the copyright owner. AAM's fact sheet describes the exceptions most applicable to the use of music in museums. There are some caveats to keep in mind, though. The face-to-face teaching exception is unlikely to apply to museum performances of musical works because it is specifically limited to performances that take place in a "classroom or similar place devoted to instruction" in a nonprofit educational institution. In other words, this exception is intended for schools. Museums might be able to use it successfully in some circumstances, but I certainly wouldn't bank on its applicability for most day-to-day uses of music.

The so-called "nonprofit performance" exception should be available for many museum performances of musical works. The statute, however, is fraught with potential pitfalls. I choose not to discuss them here, so as not to jeopardize the position of any museum seeking to avail itself of this exception. But please: If you intend to rely on this exception, consult with counsel first.

Solutions to the museum music licensing issue are possible. Museums can explore direct licensing with composers and publishers; they can identify works that are in the public domain; they can learn more about fair use and the statutory exceptions; they can pursue negotiation with the PRSs. In certain circumstances they can use written agreements to shift potential liability.

Clearly, though, it is not cost-effective for a single museum to craft its own solutions. Work together and speak with a single voice. Craft solutions not just for your museum but for all museums similarly situated. Work with your professional associations, advocacy groups, state agencies and cultural alliances. Involve composers, publishers and, yes, the performing rights societies. Banish the myths. Provide copyright education for museum professionals and for musicians. Strike win-win deals. It's possible.

Elizabeth T Russell is the founder of Russell Law, a law office in Madison, Wis., that provides "Legal Services for Creative People." This article reviews and expands upon her presentation at the 2008 AAM Annual Meeting. It is for general educational purposes only and is not legal advice. For further reading, visit the U.S. Copyright Office website.