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Copyright: Music Licensing

Music licensing is a complex and often-ignored facet of Copyright law. While in

theory it obeys the same codes we’re already familiar with, industry practice has created a
complicated web of different licenses and payment structures, few of which are designed to
be particularly compatible with theatrical use. Obtaining licenses for a play is almost always
left to the theatre; while the playwright or the designer may be able to obtain licenses, this is
exceedingly rare and difficult to administer.1 Truthfully, it’s in the theatre’s best interest to
administer copyright themselves regardless, to ensure they are cleared of any liability from
another parties’ failure to properly license work.2

Dramatic Use & Rights

To begin with the basics, music is protected by copyright. Recall §102(a) of the U.S.
Copyright Code extends protection to these types of work:

2. musical works, including any accompanying words;

7. sound recordings;3

The complexity of music licensing begins with that recognition: the composition is afforded a
separate copyright from each recording of it. Within each piece of music that plays on the
radio is two separate works, typically by at least two separate authors. Specifically, the

1
Grippo, Business and Legal Forms for Theater.
2
Ibid.
3
17 U.S.C. §102(a)

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composition is defined as “the words and music composed by the songwriter(s),” while the
recording is “the fixed embodiment of sounds resulting from the recorded performance of
that musical composition.”4

After being written and recorded, the rights are sold or licensed to a network of
distributors. For instance, for Miley Cyrus’ “Party in the USA,” the recording was authored
by Hollywood Records (a recording label), while the composition was written by Lukasz
Gottwald (Dr. Luke), Jessica Cornish (Jessie J), and Claude Kelly.5 Later, rights were sold or
licensed to distributors and publishers, in this case Kasz Money Publishing and Sony/ATV
Music Publishing Limited.6 Rights may be resold repeatedly over the years in which a song
continues to earn royalties, making the network of ownership extremely complex.

Performing Rights Organizations

To help ensure royalties are paid to the correct companies in the ever-expanding web
of producers and owners, several royalty collection organizations, or performing rights
organizations (PRO) have been formed. In the U.S., three organizations dominate the
landscape: the American Society of Composers, Authors and Publishers (ASCAP), Broadcast
Music, Inc. (BMI), and SESAC (which is no longer an acronym, though used to stand for the
Society of European Stage Authors and Composers).7 These organizations offer blanket
licenses for their entire catalog, and by subscribing to all three, a theatre can be reasonably
sure that any published song it might encounter will be covered under one of their
agreements.8 A list of the songs contained in each catalog is available on their websites,
often referred to as their repertoire. Typically, theatres will want to carry licenses with at
least two of the three; often, theatres that operate as part of a larger entity such as a university
or performing arts center can perform under the license of their umbrella organization (as
long as such an agreement exists). The pricing for blanket licenses is typically set by the
type of venue, seat count, number of performances, and average ticket prices; the cost is
often more reasonable than organizations expect.

4
Committee on Entertainment Law of the Association of the Bar of the City of New York, “Music Rights
Primer.”
5
ASCAP, “Party in the USA: ISWC T9028150358.”
6
Ibid.
7
Frascogna, Howell, and Hetherington, Entertainment Law for the General Practitioner.
8
Ibid.

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However, these blanket licenses only cover what are known as small or non-dramatic
rights. Specifically, small performance rights include “concert and other so-called “live”
performances, incidental and background music on television programs, and radio airplay.”9
For a rule of thumb, imagine that small rights are designed for restaurants and convenience
stores: music plays in the background, and is essentially incidental to the primary business
being conducted. Small rights also cover performances where they are essentially concert- or
cabaret-style, utterly without dramatic action. For instance, this often (but not always)
includes pre-show, post-show, or transition music when not directly associated with the
action of the show.

Meanwhile, grand rights or dramatic rights cover the “performance of music in a

dramatic setting or in any way which directly advances the plot of the production in which it
is included.”10 Any action which advances the plot of your story requires the dramatic rights.
This typically includes songs called for by name in the script, songs to which you
choreograph movement, or when performers react to or pantomime during a song (especially
a song from a musical or opera). A helpful test to apply is the “stool test” – consider if your
use is essentially equivalent to an actor sitting on a stool and singing into a microphone.11 If
your use is more engaged than this cabaret-style performance, you likely need to negotiate
for grand rights. PROs cannot sell grand rights licenses, but you can use their catalog to help
track down the owners who you need to negotiate with. The pricing for dramatic rights
varies widely based on the popularity of the song, duration and style of use, ticket sales and
audience size. Expect to pay far more for a hit song than for an obscure piano composition.12

The Copyright Act specifically does not recognize a performance right for sound
recordings except via digital audio transmission – this simplifies the onus on users to some
degree. “Yankee Stadium needs a BMI license to publicly perform the Sinatra recording of

9
Committee on Entertainment Law of the Association of the Bar of the City of New York, “Music Rights
Primer.”
10
Ibid.
11
Channick, “Contracts: Music Licensing.”
12
Bradford, “From Tin Pan Alley to Title 17: Distinguishing Dramatic from Nondramatic Musical Performance
Rights.”

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“New York, New York” after Yankee ball games, but does not need a license from the owner
of the [specific] Sinatra recording.”13

Small Rights (non-dramatic) Grand Rights (dramatic)

• Incidental Music • Advances the plot

• Background Music • Specified in the script
• Concerts • Integral to your storytelling
• Cabarets • Linked to dramatic action or
• Radio Broadcast choreography
• Multiple songs from one dramatic work
(i.e. musical or opera)

Covered in performing rights Not covered in blanket licenses – negotiate

organizations’ blanket licenses directly with publisher.

Figure 19: Small and Grand Rights Compared

Exceeding the Blanket Agreement

The difference between needing small and grand rights is difficult to distinguish –
“even entertainment attorneys will disagree about [any] particular use”.14 However, the issue
is rarely litigated.15 As one example, Metro-Goldwyn-Mayer (MGM), which operates both a
movie production company and the MGM Grand hotel, staged a musical review in the hotel’s
theatre titled Hallelujah Hollywood from 1974-1976. Each act showcased a film which
MGM had produced, one of which was the musical Kismet. The segment was eleven
minutes long, and essentially summarized the film including the performance of five songs
from the musical. The remainder of the show included montages of four other films, as well
as dancers and a rotating series of variety acts including a tiger and magicians Siegfried and

13
Committee on Entertainment Law of the Association of the Bar of the City of New York, “Music Rights
Primer.”
14
Grippo, Business and Legal Forms for Theater.
15
Bradford, “From Tin Pan Alley to Title 17: Distinguishing Dramatic from Nondramatic Musical Performance
Rights.”

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Roy.16 The authors of Kismet filed suit against MGM, who responded that it believed the
hotel’s ASCAP blanket license agreement covered the use. The court began by analyzing the
relevant paragraph of the ASCAP license the hotel had signed:

This license shall not extend to or be deemed to include: Oratories, choral, operatic or
dramatico-musical works (including plays with music, revues and ballets) in their
entirety, or songs or other excerpts from operas or musical plays accompanied either
by words, pantomime, dance, or visual representation of the work from which the
music is taken; but fragments of instrumental selections from such works may be
instrumentally rendered without words, dialogue, costume, accompanying dramatic
action or scenic accessory, and unaccompanied by any stage action or visual
representation (by motion picture or otherwise) of the work of which such music
forms a part.17

They determined that MGM’s performance was “accompanied by ‘visual representation’ of

plaintiffs’ play. Accordingly, defendants’ use was excluded from the ASCAP license.”18
MGM attempted to claim in defense that the visual representation was their own, rather than
copying that of the musical, but the court deemed the question irrelevant:

The question we face is not whether the ‘visual representations’ are copyrightable,
but whether the use of a copyrighted work exceeds the scope of an ASCAP license
because visual representations accompanied the songs.19

MGM lost the suit and paid damages to the authors of Kismet. Many lawsuits stemmed from
the award of damages, which has actually set more precedent than the music-licensing
portion of the case did; the court awarded damages based not only on the ticket sales for the
show, but also on a portion of the MGM Hotel’s casino proceeds, reasoning that the
infringing musical may have drawn visitors into the casino that otherwise would not have
come.

16
Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F. 2d.
17
Ibid.
18
Ibid.
19
Ibid.

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The question of dramatic use does not always hinge on visual representation, or the
lack thereof. Between 1970 and 1972, at least nine lawsuits were filed against “concert”
productions of the rock opera Jesus Christ Superstar. We will examine Robert Stigwood
Group, Ltd. v. Sperber as an example of these cases – Sperber, a booking agent doing
business under the name “The Original American Touring Company,” programmed a series
of concerts billed as “The Original American Touring Company Presents: Jesus Christ
Superstar.”20 There is no doubt that Sperber chose the name with the hope of misleading the
public into believing the performance was authorized and complete; the concerts
programmed included 20 of the 23 songs from the original musical, almost entirely in order.
Sperber claimed that their use was permitted under their ASCAP blanket license, but the
court disagreed. They begin with Nimmer’s definition of dramatic performance: “a
performance of a musical composition is dramatic if it aids in telling a story; otherwise it is
not.”21 Sperber’s performances were therefore clearly dramatic use, even if the actors
remained firmly planted on stools throughout the duration (which they literally did).

Licenses for Other Use

Music licensing is broken down into a number of granular forms by industry standard
and practice. Beyond dramatic use, there are other rights packages which can be requested
from the publisher. As with the pricing of dramatic rights, the costs are negotiated per song
and per project, and can vary widely.

The simplest right to acquire is the right of private performance, which is what your
average layperson refers to as “owning a song.” Purchasing a copy of a song on iTunes, on a
CD, or any other medium does not truly transfer the ownership of the song in any way, it
merely grants you the right to enjoy the music yourself in a noncommercial fashion.22 While
purchasing a song in this way is usually the quickest way to acquire a copy, you still need a
blanket license before you can use the song onstage.

20
Robert Stigwood Group, Ltd. v. Sperber, 457 F. 2d.
21
M. Nimmer, Copyright § 125.6 (1971).
22
Purchases of physical media are again subject to the first-sale doctrine, meaning you can resell your physical
copy; this does not change the licensing or rights to the media contained on the disk or record.

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The right of dramatic performance does not apply to use in film, television, or other
types of video. To use music with an attached visual in this way, one must acquire a
synchronization license, commonly referred to as a sync license.23 These types of licenses
are commonly requested in the entertainment industry, and typically require program
acknowledgements for the copyright holder, though such acknowledgements may also be
required in dramatic rights contracts.24 These acknowledgements can often be spotted at the
end of a film’s credits, or at the beginning of a music video.

However, the most frequently used and misunderstood package, Mechanical Rights,
permit parties to re-record a previously published song. These can also be referred to as
compulsory rights, as issuance is legally required for all publishers, at preset prices
controlled by the U.S. Copyright Code.25 At the time of writing, a mechanical license costs
only 9.1 cents per copy, though typically by contacting the publisher a lower rate can be
negotiated. The law, and the term mechanical date back to the early days when phonograph
records and player piano reels were punched by machine; today, the term has come to
generally describe the creation of a recording.26 The mechanical rights for most songs are
managed by the Harry Fox Agency, who are typically able to either sell you a license
themselves, or provide the contact who can.27 Mechanical licenses authorize the production
of many cover songs; however, cover songs can sometimes be construed as the creation of
derivative works, which could constitute infringement depending on the circumstances.

Fair Use of Music

While purchasing the correct license is typically a safer course of action, it is possible
for the use of a song or sound recording to qualify as fair use. However, music cases often
have great difficulty showing fair use, and are often settled before decisions can be written.
Cases devolve into arguments about substantiality of copying, degree of
“transformativeness,” and questions about ownership records.28 For an example of
successful fair use, consider the Elsmere Music decision, itself a landmark fair use case. In

23
Frascogna, Howell, and Hetherington, Entertainment Law for the General Practitioner.
24
Grippo, Business and Legal Forms for Theater.
25
17 U.S.C. §115
26
Frascogna, Howell, and Hetherington, Entertainment Law for the General Practitioner.
27
Ibid.
28
Gardner, “Drake Beats Lawsuit Over Sampling With Winning ‘Fair Use’ Argument.”

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1978, Saturday Night Live (SNL), a popular variety show, performed a sketch portraying a
number of politicians in the biblical city of Sodom discussing the city’s poor public image.
The group comes up with a fake advertising campaign, complete with musical jingle, which
is “I Love Sodom” sung to the tune of “I Love New York” repeatedly.29 Elsmere Music, the
authors of the New York jingle, sued for copyright infringement. SNL freely admitted its
sketch and song were intended to resemble the original, and claimed the defense of fair use
by parody. The court agreed with the purpose and character of the use as parody:

[The sketch] was clearly an attempt by the writers and cast of SNL to satirize the way
in which New York City has attempted to improve its somewhat tarnished image
through the use of a slick advertising campaign… [for Sodom, it intended to be] a
catchy, upbeat tune that would divert a potential tourist’s attention from the town’s
reputation for gambling, gluttony, idol worshipping, and, of course, sodomy.30

They determined that SNL had taken the ‘heart’ of the work, which strengthens the finding of
fair use by the nature of parody. It was clear that SNL’s broadcast was not a market
competitor for the State of New York, and that any loss of revenue on the State’s part was
due to the critical nature of the parody, rather than any form of substitution or market
competition. SNL’s use was deemed fair, and the skit often ranks among SNL’s top-ten
segments.

A more modern case of fair use in music arose from Drake’s 2013 album Nothing
Was The Same, in which a song titled “Pound Cake/Paris Morton Music 2” sampled a 1982
spoken-word recording in which Jimmy Smith, a jazz musician, decried new styles of music
and declared that “jazz is the only real music that’s gonna last.”31 Drake had attempted to
license the recording in question, but the Smith estate had refused; Jimmy “wasn’t a fan of
hip hop.”32 Drake published the song containing the sample anyway, and Smith’s estate filed
suit against Drake for copyright infringement. The judge found fair use primarily based on
the transformative nature of Drake’s work:

29
Elsmere Music, Inc. v. National Broadcasting Company, Inc., 482 F. Suppl.
30
Ibid.
31
Estate of James Oscar Smith v. Cash Money Records, Inc.
32
Ibid.

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There can be no reasonable dispute that the key phrase of [Smith’s recording] is an
unequivocal statement on the primacy of jazz over all other forms of popular music.
Defendant’s use of [the sample], by contrast, transforms Jimmy Smith’s brazen
dismissal of all non-jazz music into a statement that ‘real music,’ with no qualifiers, is
‘the only thing that’s gonna last.’ Thus, Defendant’s purposes in using the original
work are sharply different from the original artist’s goals in creating it.33

The court found the nature and substantiality of the use reasonable, and saw no market
competition between Smith’s improvisational jazz record and Drake’s hip hop album. This
case effectively extends the Cariou standard for transformative fair use into the realm of
music.34 Multiple courts have ruled on the issue of sampling as an artistic homage, creating a
phenomenon known as a split circuit where different district courts have given conflicting
opinions. Since each court’s ruling holds the same weight as precedent, sampling continues
to exist largely as a legal grey area.

Non-Profit Exemption
The myth that non-profits do not need to license music is widely held, but mostly
untrue. The U.S. Copyright Code §110 does include a bevy of exemptions, but few apply to
non-profits as a whole, and fewer still to non-profit theatre directly. Section Four carves out
an exemption for some non-profit spaces, though it is limited to nondramatic performance.
The following categories are automatically fair use:

• Performance or display of a work by instructors or pupils in the course of face-to-face

teaching activities of a nonprofit educational institution, in a classroom or similar
place devoted to instruction…
• Performance of a nondramatic literary or musical work otherwise than in a
transmission to the public, without any purpose of direct or indirect commercial
advantage and without payment of any fee or other compensation for the performance
to any of its performers, promoters, or organizers, if
(A) there is no direct or indirect admission charge; or

33
Ibid.
34
Shipley, “A Transformative Use Taxonomy.”

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(B) the proceeds, after deducting the reasonable costs of producing the
performance, are used exclusively for educational, religious, or charitable
purposes and not for private financial gain, except where the copyright owner
has served notice of objection to the performance…35

These exemptions are narrow and specifically defined. It’s unlikely that a theatre of any
reasonable size will be construed to be a “classroom or similar,” blocking most educational
theatres from ignoring licensing requirements. The restrictions on non-profit charity
performances also present a difficult standard, though more achievable for college theatres.
Again, however, note that the exemptions are limited specifically to nondramatic
performances, offering exclusion from small rights, but not grand rights. Since universities
often carry a blanket license already, the exemption is rarely invoked.

Music licensing is a complicated topic made more complex by industry standards and
practices. Theatres tend to overextend their blanket agreements, and rarely request dramatic
rights when they may be needed. Unfortunately, the risk of lawsuit with such practice is
high; ASCAP is known to send scouts to different localities with some regularity to find both
non-subscribers infringing on its members’ content, and subscribers exceeding their license.36
Litigation in this field carries a steep penalty, and is certainly best avoided.

35
17 U.S.C.
36
Grippo, Business and Legal Forms for Theater.

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