Royalty free music refers to recorded music that can be licensed for usage in a productions such as film, radio, or television programming, and the company or individual producing this content is not required to pay a recurring royalty on the music, as the production is distributed and sold. Labeling music as royalty free is done rather loosely because some organizations, such as broadcasters, are subject to paying royalties on this music, even though the original production company would never be subject to paying a royalty. This seems confusing at first, but let’s explore a scenario that will shed some light on what could be considered royalty free music:
Scenario: Television show needs specific music for a scene……
Let’s say a television show needs music for a dive bar scene where there is a jukebox playing music in the background. In the world of incidental music for film and television, this is know as source music ie. music in a scene being played from a source. The composer creating the underscore is too busy and isn’t really expected to write and produce “radio” music. What is the production company supposed to do to complete the scene?
License a song from a recording artist and songwriter
If the production company has its heart set on a specific song that has been recorded by a mainstream artist, and budget & timelines allow, they can approach negotiate with the parties that control the music copyrights. This would most likely be a record label to license the master synch rights, and the publisher(s) to license the actual composition, who would then contact the songwriter(s) for permission to do so. Though this happens often, it can also be a very time consuming and lengthy process.
This leads to another option.
License a song from a Traditional Music Library
Though it would be great to have a major artist playing in the background of the scene, most likely the production company does not have the money to license a current top 40 song nor the time for the back and forth between music publishers, record labels and respective legal departments. Also, a mainstream artist and their involved parties, would most likely want a payment of some sort against the revenue of the television series, overtime. Kind of sounds like a royalty, right? Therefore it would be nice if there was one point of contact to license the music quickly and affordably. That is where a music library comes in. These libraries can offer individual, fully produced tracks for a one-time fee, for a set amount of time, as opposed to a recurring royalty against gross revenue, while handling all aspects of music licensing. This saves time by cutting out all the back and forth between artists, writers, publishers, and labels, and saves money because libraries are not selling celebrity and recognition along with the track.
So, the way our hypothetical production company would acquire this music for the scene is that they would contact a music library and request something like a “roadhouse blues” song or other song that fits the dive bar scene, for use in a television series. The library sends back a playlist within an hour and tells the production company that one track can be licensed for $”X”, for a period of “Y” years. No royalties need to be paid during that period and the license can be renewed after “Y” years. That is time and money saved for the production company.
Royalty vs. License
It’s important not to confuse license types and methods with royalties. One could perceive the “re-upping” of a license after the mentioned 3 years, as a royalty that is continually paid over the lifetime of the television episode; especially if separate licenses are needed for each platform on which it airs (DVD, Broadcast, Cable, Web, etc). They would be correct if the licensor decided to name “re-upping a license” as an advanced royalty payment, but incorrect if they consider the payment as flat and unrelated to copies sold or revenue from ad airtime. Again, the term “royalty free” is used loosely and licenses differ from library to library.
Many music libraries charge based on budget size, audience size, medium, length of music used, and length of the production run, while other libraries simplify their license structure and offer licenses in perpetuity across all mediums for a set 1-time price. Really, the latter method of paying a flat, onetime price, regardless of audience size and production run length (licensed in perpetuity), is what most everyone considers to be “royalty free.” The licensee pays only once to use a piece of music in a production, and the license covers this usage forever.
But what about Performance Royalties and Mechanical Royalties
Now, to make things just a little confusing, the above scenario does not make the music ineligible for royalty collection. Notice that we are only talking about the production of the series and the revenue it collects. Broadcasters such as NBC, ABC, and cable networks are subject to paying royalties. Even though the production company does not need to pay a royalty for the music, doesn’t mean a television station would not. This is where performance royalties and come into play. Performance royalties are collected every time a composition is, well, performed. This can be from a live performance, radio broadcast, television broadcast, playback at a restaurant, etc. Performance rights organizations (PRO’s) such as ASCAP and BMI, represent composers and songwriters and collect these royalties on their behalf. So, whenever the above mentioned TV show airs, the respective PRO would collect a royalty from the TV network, and pass it along to the composer. The only way the music would not be subject to performance royalties would be if the composer is not registered with a PRO or if they wish to forfeit these performance royalties by not registering the musical work.
Another situation where royalties could be collected on a song that was in the above TV show is if it ends up on a soundtrack. Mechanical royalties are collected on the sale of physical copies (CD’s Vinyl) and digital downloads of music. If the show releases a soundtrack, which of course makes sense to create an additional revenue stream, the composer of the composition would receive a royalty on each copy of the album or single sold. This can be negotiated but most likely would be the statutory rate of 9.1 cents per copy sold. The owner of the sound recording copyright (which in most cases is also the library) could possibly negotiate a royalty as well.
Lastly, if the soundtrack is streamed, that takes us back to being subject to performance royalties.
Buyout licenses, Non-Rights Managed Music, and Copyright Free Music
As you can see from the above, royalty free music in most cases is never truly free of royalties. The only way it could be is if the right holder forfeit all rights to their composition and sound recording for a 1-time fee. This would be a buyout license purchased on a composition that is not rights managed by a PRO. This does exist with some libraries and online services when the music is synced with visual media only, but almost never in a case when said song makes it onto a soundtrack. Normally with buyout sync licenses, there is always a clause that prohibits that resale of a work as music only and would require mechanical royalties be paid. Furthermore, some may seek out Copyright Free Music, when in reality they really just want royalty free music. True copyright free music would be public domain recordings of public domain works. These individuals just want to be able to include music in their own work without spending too much time seeking permission, and without having to continually pay as the work is distributed. Again, royalty free music in these situations would most likely suffice.