BMI and the Radio Music License Committee announced a settlement of their rate court litigation over the royalties that commercial radio will pay for the public performance of musical compositions licensed by BMI. While we have not yet seen the agreement, the press release already raises one issue likely to sew confusion in the broadcast industry – the extent to which the agreement allows the use of music in podcasts. While the press release says that the BMI license includes the use of music in podcasts, radio stations should not assume that means that they can start to play popular music in their podcasts without obtaining the rights to that music directly from rightsholders. They cannot, as BMI controls only a portion of the rights necessary to use music in podcasts and, without obtaining the remaining rights to that music, a podcaster using the music with only a BMI license is looking for a copyright infringement claim.
So why doesn’t the license from BMI fully cover the use of music in a podcast? As we have pointed out before, a broadcaster or other media company that has performance licenses from ASCAP, BMI, SESAC and even GMR does not get the right to podcast music – nor do the SoundExchange royalty payments cover podcasts. These organizations all collect for the public performance of music. While podcasts may require a performance license (see our article here about how Alexa and other smart speakers are making the need for such licenses more apparent as more and more podcast listening is occurring through streaming rather than downloads), they also require rights to the reproduction and distribution of the copyrighted songs and the right to make derivative works – all additional rights given to copyright owners under the Copyright Act. These additional rights are not covered by the public performance licenses from ASCAP, BMI, SESAC, GMR and SoundExchange, nor are the rights to use the “sound recording” or “master” in the podcast. What is the difference between these rights?
The public performance right is simply that – the right to perform a copyrighted work to the public (those beyond your circle of family and friends). Making a copy of a copyrighted work is a different right, as is the distribution of that recording. Both are triggered when the podcast is downloaded onto a phone or other digital device – the manner in which podcasts were initially made available to the public. As we have written before (see, for instance, here and here), by convention (and now by the provisions of the Music Modernization Act), making available music for on-demand streaming (where a listener can choose a particular song, or a set of songs that will play in the same order all the time) has come to be considered to involve the rights of reproduction and distribution even if a download does not occur (the “mechanical royalties” covered by the MMA – see our articles here and here on the MMA). Thus, as podcasts – even when streamed – are made available on demand, the rights to the reproduction and distribution of the words and music of a song must be obtained. These rights are obtained not from any of the organizations mentioned above, but usually for a production like a podcast, directly from the copyright holder – usually the publishing company with which the songwriter is affiliated (or the publishing companies in some cases where multiple songwriters have co-written a song and reserved rights to approve uses of the song in productions like podcasts – see our article here).
The right to make a derivative work is another right of the copyright holder (see my article here on derivative works). A copyright owner must give his or her permission before their work is modified in some way. While that can involve the changing of lyrics to a song, it can also involve associating that song in some permanent way with other content. In the video world, that is referred to as a synch right – where the audio is “synched” to the video creating a single audiovisual work. Synch rights are not specifically defined by the Copyright Act. They have traditionally referred to audiovisual productions, but the same concept is at play in the creation of a podcast, where the music is synched in a permanent fashion to other audio content to create the podcast. In a recent complaint by Universal Music against a podcaster, Universal complains that the podcaster violated not just the public performance rights of the copyright holders, but also their rights to authorize the reproduction, distribution, and the derivative works made from their copyrighted material (see our article here on that suit).
In addition, even if these rights are cleared, these rights only cover the underlying musical work or musical composition – the words and music in the song. There are an entirely different set of rights necessary to use the recording of a song from a band or singer in a podcast. The rights to the “sound recording” or “master recording” also need to be obtained for any on-demand use of music. SoundExchange covers digital public performances of the sound recording, but only when provided in a noninteractive setting where the user cannot determine what song will be heard next (see our articles here, here and here for more on the difference between interactive and noninteractive digital uses). The rights to use the master recording in a podcast, as the podcast is available on demand, need to come from the copyright holder of that master – usually the record label (but sometimes the artist) for most popular music.
This is all a long way of saying that podcasters need to get permission for the use of music in their productions. Many podcasters have commissioned original works where they license from local artists the recordings of music written and performed by those artists. Some online services have recently begun to develop, where they clear all the rights to music and license that music to podcasters for set fees. But, thus far, most of that music is not major label releases, but instead independent music. There are some indications that might change in the near term. But right now, for major label releases, you generally need to get permission directly from the copyright holders to use their music in a podcast. The bottom line – don’t use music in podcasts without getting permission.
Courtesy Broadcast Law Blog