Music Licensing ABC – the First Question for Music User…

that before you use someone else’s property, you will first have to seek the owner’s permission. The same applies to music; but are you aware that music is not just the CD or the electronic file that you download from the Internet? So who owns the music from whom you should seek the permission (or, adopting the legal terminology, licence)?

What commonly termed “music” is understood, at law, as two distinct copyright works – musical works and sound recordings. Each is copyright protected and not to be confused with the other. A “musical work” is sometimes conveniently referred to as “repertoire” or “composition”, which is the composite of a melody plus lyrics, i.e. the work of the composer and lyricist. (Just to be clear – each of composition and lyrics is itself copyright-protected.) The rights in musical works are usually owned and/or controlled by entities called music publishers. Examples of notable music publishers include Warner/Chappell Music, EMI Music Publishing, Sony/ATV Music Publishing and Universal Music Publishing. It follows that, if one intends to use a composition and/or the lyrics, the user needs to identify the music publisher holding the musical work in question and seek an appropriate licence. Depending on the intended usage, sometimes the users (licensees) should seek a licence from the relevant performance rights organisation (“PRO”) with which the music publisher is affiliated. For example, the PRO in Hong Kong is the Composers and Authors Society of Hong Kong (“CASH”).

Separate from the musical work, a “sound recording” refers to the recording of the musical work, i.e. the soundtrack of artist’s performance of musical work. The rights in sound recordings are frequently owned and/or controlled by record companies, or more commonly known as record labels. Examples of notable labels include Warner Music, Sony Music, Universal Music. If one intends to play or otherwise exploit a recording, the user needs to identify the label holding the sound recording and seek a licence. As with the case of musical work, depending on the intended usages of the sound recording, sometimes the licence is granted by the collective with which the record label is affiliated. For example, Warner Music is a member of the Hong Kong Recording Industry Alliance Limited (HKRIA), which may be the party from which the licensee should seek a licence for the usage of sound recordings of Warner Music.

After you identify and approach the appropriate licensor, a licensee will typically be asked a range of questions, including: What is your business? How does your business propose to exploit the musical works / sound recordings? Do you intend to charge for your service? How much money you will earn from your proposed exploitation of musical works / sound recordings? Naturally, the answers to these questions will help the licensor determine whether to grant you a licence; and, if so, the type of licence to be granted to you, the licence fees, and any conditions that the licensor would impose on you in the licence. This is when the negotiation of licensing deals starts; and input from lawyers experienced in licensing would become valuable.

As a side note, performer has certain rights in his / her performance as prescribed by copyright law. To name a few, such rights include the right to make copies of fixation of the performance, right to be identified as the performer of the performance in question (credit), etc. In practice, in most territories in the region (including Hong Kong), performers assign such rights to record labels. Therefore, in Hong Kong, the performer’s rights in sound recordings are usually cleared when the licence is granted by record labels.

Haldanes advise on and negotiate licensing deals for licensees ranging from multi-national corporations (streaming platforms, broadcasters, etc.) to event organisers. We provide practical legal and business advice to clients as to how best to structure their businesses in the region and devise licensing strategies. We have extensive connections and networks in the media and entertainment industry across the region, from licensors to licensees; and are able to connect clients with the right parties to get deals done. If you wish to learn more about our media and entertainment practice, or wish to talk to anyone of our team, please click here.

For more information, please contact our Weiken Yau at weiken.yau@haldanes.com