Licensing Madness


Let's start with a quick quiz.

Question: What do the following four things have in common?

  • Putting your hand on a hot stove.

  • Entering your username and password into the link provided in an email claiming to come from PayPal.

  • Giving your bank account and social security number to that nice widow from Nigeria.

  • Playing RIAA music on your podcast.

Answer: They are all really stupid mistakes you don't want to make.

We understand the temptation to use "big media" music on your podcast. Maybe you want to play the Village People's "YMCA" during the intro for your podcast to help set a tone for the show. Perhaps on your show you are telling a news story about a man stowing away on a plane and getting ripped apart by the landing gear with his remains falling to the ground and you want to play a clip of "It's Raining Men." Or you just dreamed of having your own show where you play a different Led Zeppelin song on each episode.

Stop! Don't do it!

Don't even think about doing it!

There is a reason why in November of 2005 Adam Curry cleaned up his show and changed to only playing "podsafe" music on The Daily Source Code. The lawyers were coming, and Adam did not want to be sued. Make no mistake about itas a podcaster you are going to be looked at as a file sharer, and the RIAA has had no problems going after grandmas and 12-year-olds for sharing music. Surely you didn't think podcasters would be treated any different?

Unfortunately, even if you just want to secure a couple of licenses, this issue is not as simple as just filling out a couple of forms and being good to go. We asked John Buckman, CEO of Magnatune, if it was even possible to get licenses for a podcast so that you could play any big media music on your show. Here is his response:

"This came up at a conference, The Future of Music Conference, when there were ASCAP and BMI people there. And they are happy to sell you a license for podcasting, but it is not the entire license you need. So all they are doing is promising not to sue you, but they are not saying no one else will.

Because podcasts, if you take the entire song and put it on a MP3 stream, that is seen as essentially a pirated copy. That is how these people see it. They see it as a mechanical copy, and so you really need a license from the record companies in order to podcast a piece of music. It is actually no different than selling it through iTunes as far as the rights situation is concerned. When you buy a song from iTunes, they transfer a copy of the music file to you. That is legally what a podcast is."


OK, we realize some people will not be satisfied until they put their hand on that hot stove and are looking for a little more than simply, "Don't do it!" Let us explain the whole issue John was talking about. Say you are dead set on getting the licenses to podcast any song no matter the cost. First, you need to look at the two groups that represent a song. On one side you have the songwriters and publishers (the composition group), and on the other side are the record labels and the artists (audio recording group).

So if Sum 41 did a cover of a Willie Nelson song, Sum 41 and Island records would fall into the audio recording group, but Willie Nelson would be covered under the composition group as the original writer of said song. In the composition group, you have ASCAP, BMI, and SESAC representing the songwriters, and you have the Harry Fox Agency representing the publishers for the mechanical license. Right off you need to get four different licenses just for the composition group. Let's assume for the sample costs breakdown shown next that you make no revenue from your site, you release two shows a week, each show has four songs, and you average 1,000 downloads per show.

Note

We talked to the Harry Fox Agency about the amount shown in this example and they confirmed that the number was correct. They then stated that they were in the process of releasing a new license structure for podcasting that makes more sense. At the time this edition of the book was written, they had not yet made that new structure public. We are not sure if it will be closer to ASCAP and BMI, or if it will be $10,000 instead of $38,000.


  • $288ASCAP, "Non-Interactive 5.0"

  • $283BMI, Website Music Performance Agreement

  • $168SESAC, Internet License

  • $37,856Harry Fox Agency, Mechanical License ($0.091 for first 5 minutes per Song)

  • $38,595Subtotal

No, there is not a mistake in our calculations. We checked them multiple times. Shocking, isn't it? But with four songs in a show, that is $0.364 per download, times 1,000 downloads per show. With two shows a week and 52 weeks in a yearBam! It is almost $40,000. Remember, with a podcast, each download is looked at as a single transaction. So if you want to be legal, this is the minimum you would pay, and we have not even gotten to the record labels or the artists yet.

Over on the other side, the audio recording group, you would normally have the Sound Exchange for Webcast licenses to deal with, except, their license does not cover podcasts. So instead of getting a single license to cover all the labels, you will need to go to every label and get licenses with each one. In addition to the amount shown earlier, you would also have the cost and time associated with negotiating a license with each and every record label.

As for Sound Exchange offering up a podcast license in the future, according to them it would literally take an act of Congress for this to happen. So this is one part of the book we will not need to update in future revisions. We talked to Derrick Oein, currently President of AMP and former COO of MP3.com. Here is part of the conversation with regards to the cost of a license from the audio recording group side:

TotPM: Have you heard of anyone who has actually received a license from a major record label for podcasting?

Derrick Oein: Not for podcasting, no. What they [the major record labels] would tell you is, well, if you want to [offer to] download a song you should pay wholesale. To them it is basically a digital download, so you should pay arguably the wholesale price of a download.... Generally you are talking a wholesale cost on the sound recording side between 60 some odd cents and low 70 cents if the wholesale price was a dollar. And they would say that is great, just pay us that.

TotPM: How do you think the whole interaction of advertising in podcasting is going to affect music podcasts?

Derrick Oein: It will be problematic. When the [independent] artists sense there is going to be some commercial aspect to it, they will say, "Well, how much are you going to pay me?" As you roll out more and more commercial aspects to what happens, I think that [independent] artists will be less and less friendly about the licensing and will demand some sort of payment.... I think that you will have to give something back to the artists.... It may not be in the level of paying eight and half cents per download, clearly, but some sort of payment that makes sense.

After reading all that, if you still want a license, here are some sites you should visit:

  • ASCAP (www.ascap.com)

  • BMI (www.bmi.com; see Figure 8.1)

    Figure 8.1. BMI is trying to generate revenue from podcasters

  • SESAC (www.sesac.com)

  • Harry Fox Agency (www.harryfox.com)

  • Sound Exchange (www.soundexchange.com)

  • IMH (www.mentalhealth.com)

Finally, we do find it very ironic that Sony BMG music in July of 2005 paid $10 million and agreed to stop bribing radio stations to feature artiststhis stemming from an investigation by New York Attorney General Elliot Spitzer. Additionally, in November of 2005, Warner Music agreed to pay $5 million to settle an investigation by Spitzer into payoffs for radio airplay of artists. Unfortunately, we as podcasters, who are more than willing to help promote some hot new artist or even just some classic artists, cannot get any help from the major record labels. Luckily for podcasters, there is a plethora of free podsafe music available that we can play on our shows today.

In the future, we do believe that podcasting will reach a tipping point with regard to listeners that will cause the record labels to flock to podcasts as a way to promote new music from their artists. What that number is and when it will happen is anyone's guess, but until then we highly recommend you keep your hand off the stove.




Tricks of the Podcasting Masters
Tricks of the Podcasting Masters
ISBN: 0789735741
EAN: 2147483647
Year: 2006
Pages: 162

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