In case of sound recordings, just like with musical compositions we covered in the previous
module, there are several different licenses used today stemming from the copyright contained
in sound recordings, some compulsory, and some non-compulsory in nature. Remember that
“compulsory” in this context does not mean that some licenses are required by the
users and some not, but that some can be refused and are freely negotiated, and some can not
be refused and are statutory. All of these licenses are required by law in order to use
the copyrighted sound recordings in ways that we will talk about.
We’ll start with the digital transmission license. Digital Transmission License is a
compulsory type of a performance rights license, limited to the digital transmission of sound
recordings (satellite radio, Internet broadcasting, etc.). Meaning, it is only required for the
digital broadcasts of the sound recordings, and not for the regular terrestrial broadcasts.
Regular radio stations, broadcasting terrestrially, are not required to obtain this license. Satellite
radio and internet streaming services are. The terms and the rates for this license are
determined and periodically adjusted by the Royalty Copyright Board, and paid by the digital
broadcasters, generally to SoundExchange, which distributes the funds to the recording
artists and record labels.
SoundExchange is a non-profit organization that operates since 2003 as a performing rights
organization for the sound recording copyright owners, collecting the digital transmission
royalties, and the ephemeral recording royalties, which we will talk about next, and distributing
them to its members. SoundExchange is the only legally designated and authorized organization
to perform such task in the United States, and as such, it distributes over 500 million
dollars of statutory royalties to the record labels and recording artists annually.
It should be noted that the digital transmission license comes in two varieties, covering two
different types of digital transmission services – those that are interactive, like Spotify,
and those are non-interactive in nature, like Pandora. Meaning, those that users can control
in terms of what songs they want to hear, and those where that choice is not offered.
The digital transmission license we described earlier concerns non-interactive services.
The license for interactive digital transmission services is non-compulsory, and is payable
by the interactive services directly to the sound recording copyright holders, usually
the record labels, not to SoundExchange.
The next two licenses are also related to the digital transmission of sound recordings.
Ephemeral Recording Reproduction License is a compulsory license required to make a copy
of the original sound recording for the use in digital broadcasting. That copy is referred
to as an ephemeral copy, and the license it’s a form of a reproduction license, since it
includes copying of the copyrighted work. The terms and the rates for this license are
determined and periodically adjusted by the Royalty Copyright Board, and the royalties
are paid by the digital broadcasters to SoundExchange and distributed by that organization to the
recording artists and record labels.
Ephemeral Recording Performance License is also a compulsory license, required in order
to transmit (to broadcast) an ephemeral copy of the original sound recording in digital
broadcasts. So it is a form of a performance rights license, as it concerns broadcasting
of the copyrighted work. The terms and the rates for this license are determined and
periodically adjusted by the Royalty Copyright Board, as well, and the royalties are paid
by the digital broadcasters to SoundExchange, which distributes the payments to the recording
artists and record labels.
Moving on from digital broadcasting to the recording production and industry, the sound
recording license relevant there is the Sound Recording Sampling License. Sound Recording
Sampling License is a non-compulsory type of a derivative license, because it concerns
the creation of a derivative of an original sound recording. It is required in order to
use a sound recording, or any portion of it however small, as the basis for a sound sample
of any kind, utilized in another sound recording. This includes looping, filtering, tempo stretching,
one shots, and any other type of sampling work for which one might use the preexisting
copyrighted sound recording. This license is payable by the recording producers directly
to labels. Being that this license is not compulsory, the granting of it, and the rates,
are freely negotiable between the parties.
And lastly, there is a license that covers the use of the sound recordings in audiovisual
works. Master Use License is a non-compulsory license, required in order to use a sound
recording in a motion picture, a video, a video game, or in a television based work.
It is payable by the audiovisual works producers seeking the license, directly to the labels.
The license is not mandatory, and the rates are freely negotiated. It should be noted
that a “Sound Recording Sampling License”, which we just spoke about, is often also referred
to as a “Master Use License”, in order to distinguish it from the “Musical Works
Sampling License” which covers the use of musical compositions in sampling. Both licenses,
as we have seen, are not mandatory, and their granting and rates are freely negotiated.
In our discussion about music copyright, in the previous module, we mentioned some special
considerations that apply to sound recordings and its copyright coverage. Since any relevant
type of sound recording licensing is only applicable to the recordings under the copyright
protection, we need to briefly revisit the issue of the copyright of the sound recordings
here and make sure that we understand the regulations regarding which recordings are
protected, under which conditions, for how long, in which commercial context, etc.
The 1971 Sound Recording Amendment to the 1909 Copyright Act, which became effective
on February 15, 1972, provided that the recordings published and copyrighted after February 15,
1972 be protected by the Federal Copyright Act and their copyright be regulated like
the copyrighted musical works, with the exception of the performance rights, which were not
granted to sound recordings at the time. Until then, the recordings were not covered by the
Copyright Act and were thus not protected by the federal law, but by the state laws
under the states’ common and criminal law. The amendment also provided that the state
protection of all the pre-1972 recordings will end on February 15, 2067, 95 years after