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Podcasting, Royalty-Free Music and the Music Business

I’ve been negotiating to use the music of a brilliant Austin-based experimental music group, Many Birthdays for my creative projects.

Here’s a few things I’ve learned about music licensing by doing a little googling on the Internet.

Iamusic seems to be the main source of royalty-free music, although its prices and contracts are just out of this world. Very expensive.

One problem with iamusic (and even magnatune, the so-called artist-friendly music site) is that the licensing deals are based on volume and mechanical distribution. With iamusic you have to choose “Per Project Reproduction Allowance” and “Licensed Market Area (50 miles, 100 miles, 500 miles, etc),” but these are just ridiculous concepts in an age where almost everything resides on the web.

In magnatune, you have to specify the type of usage you have (TV, venue space, school project, TV ad, etc) , but even these are ridiculously priced. To use a 15 second excerpt for a TV ad for worldwide distribution of an unknown band costs $484. To create a derivative work of a song by the same unknown band for the highest number of units possible (in this case 500,000) would cost you $90,000, a truly astounding figure (especially if you remember that derivative works were fully legal before 1976). To use a 30 second excerpt of a song for a personal web project for an unlimited time will cost $4800!

I’ve seen cheaper alternatives on musicbakery, but they still seem geared toward the mechanical reproduction model, where price is determined on the number of printed copies. This is totally unrealistic for smaller personal projects. How do you track downloads? How can you equate free downloads with mechanical reproductions? Strangely, magnatune allows noncommercial creative commons use of their music for free, which only seems to beg the question of why all music and artistic projects aren’t noncommercial to begin with.

In this day and age, unless you are using something explicitly for a TV commercial or some commercial venture, it makes little sense to be commercial. Anyway, almost every creative work starts out as a noncommercial venture. It’s hard to make a distinction here.

There are three implications here.

First, right now podcasting and no-budget video production will drive an incredible amount of demand for musical accompaniment. But the prices on most visible Internet sites are unrealistically high for anyone to afford them. Although royalty-free music sounds beaurocratically easier to manage, you are paying a hefty price and abiding by terms that may not be appropriate for web-only projects. In the long term, royalty-based music (musical rights that charge a percentage of revenues) may be a better model when the majority of podcasting exists on a much smaller scale.

Second, the commercial/noncommercial question on Creative Commons works just hangs over the head of artists. We need to distinguish between works that haven’t made money (but have to potential to do so) and works created explicitly to make money. We also need to create a mechanism that allows money to change hands between creator and user without changing the noncommercial nature of the project.

Third, independent musicians should be thinking of ways to handle their own licensing negotiations. Magnatune asks for more than content creators can pay. But independents could easily make their own price list and sell licenses via paypal or what not.

Update: May, 2007. Mark Clark , the  head of IAMusic writes:

You are correct regarding our reproduction and broadcast licensing, but they have nothing to do with internet delivery or podcasting. They only apply to reproduction of physical goods and broadcasting via TV and Radio. For internet use, including podcasts, it is worldwide for the one-time license. There is no reproduction or broadcast issues for internet use. I agree with you, it would be ridiculous to apply these concepts to internet use, which is why we don’t 🙂

Plus, we offer 206 titles for FREE which can be used for podcasting and other internet uses.

When reproduction of DVDs is the intended use, the cost to manufacture 5,000 DVDs on average is $6,200. To use the music on these 5,000 DVDs is $55.

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