The Rat’s Nest Of Music Licensing. In One Horrifying Diagram

“I didn’t believe it at first… being an intellectual property company we understand licensing,” Hossein Yassaie, CEO of UK-based Pure told PC Pro.

“But I have to say I have never seen anything as complicated at this.”

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36 Responses

  1. Michael Harnett

    As someone who has spent the over 20 years dealing with the licensing of music both offline and online, this diagram sums up the complicated mess that is a hinderance to the growth of not only new technologies and companies but also establish companies that are creating new products. Even if one wishes to produce a free promotion for an artist many of the these same clearances have to be made or waivers acquired. The worst case scenario, which is not included in this chart, is that a company has created a new revenue product and now with each of these rights holders one has to spend an inordinate amount of time just educating each organization before you can even discuss a license. I’m not even going to get into having to negotiate different licenses with the same company for different countries and continents. The overhead costs to all parties involved is staggering and the process totally ineffiencent to growing an industry and keeping pace with everyone’s customers. I have always hoped that the licensors and licensees could just send their best business affairs personnel and lock them in a room till the process is streamlined and uniformed. One can only hope.

  2. CraigDiPaolo

    I will echo these sentiments, and say that it also seems like the licensing is 10 times worse in Europe. The idea of people getting into a room and working these issues is not outlandish notion, and other industries routinely create standards and practices to properly set the playing field. How about a collapsed copyright?

    Too bad this business has roots in mafia and thug behavior. It never stood a chance in digital.

    • Suge Knight

      Too bad this business has roots in mafia and thug behavior. >>>>> I TAKE OFFENSE TO THIS !! …. LOL ! 🙂

      • CraigDiPaolo

        Suge, you shouldn’t be so hard on yourself. You are an upstanding, fine thug.

  3. @negativejerk (via Twitter)

    GREAT infographic on how royalties work

  4. @Marek_Hoffmann (via Twitter)

    Schön. Kompliziert. Infografik zu Rechten und Lizenzen in der Musik-Branche.

    (rough translation: complicated graphic on rights and licensing in the music industry!)

  5. @wemusicmakers (via Twitter)

    The world of music royalties explained. Sort of. In a way…does this make sense to anyone?

  6. @jzredmelon (via Twitter)

    How do rights & money flow in the music biz? Take a look @ this diagram and feel my pain. Oh, and everyone takes a cut!

  7. @darkfunkman (via Twitter)

    What simplicity. No it’s not a joke but a pretty accurate picture…

  8. @_willthompson (via Twitter)

    The flow of music rights and royalties

  9. @coreyhartford (via Twitter)

    Hmm, this *clearly* needs to be more complicated

  10. @rcastleman (via Twitter)

    … and the music biz fights tooth and nail to protect THIS

  11. mchad

    What a bloody mess.

    Do we dare dream that in the 21st century this process can be simplified?

    Do we dare imagine that music publishers would agree to this simplification and therefore relinquish certain controls that come with such a complicated and cumbersome process?

    It will take a herculian effort to rewrite the book on this.

  12. @JasonBJenkins (via Twitter)

    Behold the horror of music licensing (After surviving Ruckus/TotalMusic/PPL, I’m not surprised.)

  13. @3reasonable (via Twitter)

    How the money flows (US model). Music rights and royalties flowchart

  14. @NedReardon (via Twitter)

    this explains basically everything – have a look if you’ve got anything to do with the music industry, or are bored

  15. Neil Cartwright

    He forgot something – when artists play live they must report the set-list to the PRS and the promoter has to pay royalties.

    V. sloppy

    😉

  16. davidcbalfour

    and this graphic doesn’t quite display the true horror – since all Record Companies are neatly joined together in one box. the reality is even worse than it appears here.
    we all know it’s rubbish – what I’d like to hear are concrete suggestions for ways to improve. to my mind those who suggest a compulsory licensing framework with sound recording rights and royalties administered in part by PPL are being over simplistic. If licensing will remain voluntary, does the propsed Global Repertoire Database offer any comfort?

  17. Ignacio

    Global Repertoire Database… Is that the EU-wide initiative? Or am I thinking of something else?

    Seems like we have the right people who want to get this simplified. There must be serious forces to thwart efforts to simplify and facilitate better licensing.

    Am I onto something?

    • davidcbalfour

      yes, Global Repertoire Database is the EU initiative…

  18. M G

    So, this is where my money should come from? Why am I so poor then?

  19. Brian Mencher

    While the diagram does a nice job of presenting the complexities of music licensing, I noticed at least two incorrect assertions in the flow of rights: 1) the mechanical licenses are obtained from PRS (performance rights societies) and 2) PRS’s license the performance right to cinemas. To my knowledge, cinemas/movie theaters in the United States are exempt from obtaining a performance license and mechanical licenses are either directly obtained from the publisher or through a third-party company, such as Harry Fox Agency or Rights Flow.

    Yes, music licensing is very complex; perhaps overly complex. And yes, the industry could benefit from a streamlined system. But, just because a business transaction appears to be a complex undertaking does not mean that the system necessarily needs a complete overhaul. At the end of the day, there are various rights holders in one song… and an equal number of rights holders in a particular recording of that song.

    This diagram clearly was drafted to prove a point. While I question some of its accuracy, I understand how the current music licensing protocols are burdensome and serve as a deterrent to greater usage of music.

  20. N H

    This is a good illustration of the problem, and it is true that it needs to be made less complex for licensees to acquire licenses for music (and it should be possible for them to get a license automatically, not by negotiation territory by territory, stakeholder by stakeholder.

    However the idea that the EU GRD project has legs is a fairy tale. Anyone who imagines that the European Union Competition Commission is going to be allowed to have its fingers in a system that manages global rights has got to be kidding.

    If you really want a good and stable home for an international licensing platform, the UN agency WIPO is the right answer – it has administered global rights management systems for almost a century, and all the rightsholders have long relationships with WIPO.

    • davidcbalfour

      fyi I think you misunderstand the intention behind GRD. it is not intended to be a licensing body – it is intended to be an accurate database of global rights which will serve as a one-stop info source for people who do licensing. they still need to do it themselves, it would just be much easier to know who they should approach

  21. @TuneCoreMusic (via Twitter)

    Not the simple maze found on the back of cereal boxes.

    • AM

      this is just a PR stunt from a service that doesn’t want to pay for music. this chart represents all kinds of separate transactions that have nothing to do with Pure. i don’t know the uk system that well but it looks to me like all they need to do is account to the licensing societies and labels. really not that complicated.

  22. @stsn (via Twitter)

    why the music biz sucks. not even gonna try to understand.

  23. @Plainhuman (via Twitter)

    music licensing in one (un)useful diagram

  24. @jtmcarthur56 (via Twitter)

    Very complicated. Would like to see similar chart for book publishing & software.

  25. @farrahbostic (via Twitter)

    note: songwriters≠artists, the audience is missing entirely, and you’d need multiple licenses for “one” use. depressing.

  26. Bricks and Mortar Media

    “clear as mud,” as one clever reader put it.

  27. @FrankWorsley (via Twitter)

    Music free in 5 yrs! Make $ on tour/merch

  28. @indabamusic (via Twitter)

    Hey Musicians- We’re finding new ways to simplify this – Coming soon!

  29. Brent

    We’ve worked really hard to solve a large part of this problem and we certainly fast track all licensing.

    That being said, many parties listed in this diagram will not go away or assist in any effort to streamline the process, the majors and the PRO’s included. Also consider, what effects might it have on the artists if “some” of these gatekeepers went away. I’m not saying things can’t get better but any change should not be enacted simply to make it easier, if the artists and rights holders suffer in the process.

    Brent McCrossen
    CEO – Audiosocket
    http://audiosocket.com
    twitter: @audiosocket