Copyright is a right granted by the government to the author of a creative work, including a musical composition. It affords the copyright owner the sole right to reproduce, create a derivative work of or perform a copyrighted musical composition in public. A copyright owner can, however, assign the copyright to another party. This part of the copyright law makes licensing possible.
Songwriters sign contracts with publishers to assign their copyrighted music over for use in exchange for a cut of the royalties and a promise of active promotion on the publisher's behalf. A publisher holds up its end of the bargain by promoting the artist's songs to prospective clients. For example, a publisher might try and license a rock band's song for use in an upcoming action film. Music publishers also buy out old song catalogs and try to license this music as well.
There are different types of licenses available to handle different situations. These include mechanical, public performance and synchronization licenses. The Harry Fox Agency issues mechanical licenses to record companies that grants them the right to reproduce and distribute copyrighted songs. A public performance license involves granting the use of a license in a public setting. A synchronization license is the right to synchronize a copyrighted song with images in film or TV.
For many businesses, such as radio stations, purchasing a blanket license is the most practical music copyright license agreement. A blanket license is a public performance license that allows the licensee the right to use any song under the supervision of a performing rights organization (PRO), such as the American Society of Composers, Authors and Publishers (ASCAP) or Broadcast Music Incorproated (BMI). The licensee pays an annual fee to have the right to perform any songs in the PRO's catalog.
A licensee agrees to use the music only in the manner in which it is described in a music copyright license agreement. For example, a music supervisor might purchase a license to use a jazz song in a documentary. He may only use the song as it was agreed in the contract, such as in a designated scene, for example. Using a copyrighted song in a format not detailed in a music copyright license agreement is just as big an infringement as having no agreement at all.