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How to Licence Music for Streaming

If you want to stream audio or audio and video online, and want to include someone else's music in that stream, you need to understand what licensing might be involved. This article will start with an explanation of licensing, then outline a clear picture of what licensing is required for some live and on-demand streaming scenarios.

This will read a little formally to strive for accuracy. I asked a close friend and one of the defining multimedia lawyers with expertise in the music licensing world, John Enser, partner at CMS and one of the leading multimedia lawyers and experts on music licensing, provided indispensable fact-checking on early drafts of this article.Thanks too must go to Tom Frederikse, partner at Clintons, who is one of the most "in the trenches" legal minds, working for many well-known and lesser-known digital services, who similarly provided insights and corrections when needed. The folks at UK's PRS for Music could not have been more helpful and insightful, and they also revealed some changes happening to the available licensing that will affect stream producers worldwide.

The details and ideas presented are as accurate as can be in the spring of 2021. It is an evolving space, so things may have changed by the time you read this. Always review the latest information from the licensing bodies before you inadvertently fall foul of the law.

Music licensing models and associated terminology can be highly nuanced by territory, and while much of what follows is applicable worldwide, this article does reflect a UK focus.

The laws are applicable to the individual (or organsation) that owns and operates the infrastructure from where the music is hosted and streamed, and in each case is enforced by national law. Each licence to use copyright content must be obtained from the relevant territorial rights holder—which in most cases means country-by-country, though there are exceptions (pan-European and pan-African licences are available). Territories for which a service cannot (or will not) get the necessary local licences should be geoblocked/georestricted to prevent access.

If content is streamed into a particular territory without the necessary licences, the relevant rights holder may take action against the owner/operator (sometimes with support from local authorities) to stop that that local copyright infringement. This may include a claim for damages if the service is thought to have caused significant financial loss to the rights holder.

World Intellectual Property Organization (WIPO)/UN treaties form a high-level framework for every country's national copyright law, though this is only for enforcement (not licensing) so most services are never aware of the overarching Berne Convention that underpins the global legal structure.

Safe Harbor

More importantly for the main services, the U.S.' "safe harbor" (and the EU and UK's "Mere Conduit") laws provide immunity from copyright infringement for any user-generated content (UGC) service that has "no actual knowledge" of the infringing content uploaded by its users. That lack of "actual knowledge" can be eliminated by alerting the service to a specific infringement and thereby forcing removal – which is known as the "notice and takedown" procedure. In theory this works well, but in practice it is a heavy burden on the rights holders; the UK's British Phonograph Institute (BPI) sends more than 200 million takedown notices to Google each year, i.e. several per second, 24/7.

The safe harbor system explains why a UGC service like YouTube has so much more content that Spotify/Apple and why YouTube makes so much profit while Spotify has yet to get into the black. Under the "safe harbor" provisions, the legal responsibility for music licensing technically rests with the end user (and, other than a few high-profile cases 10 years ago, rights holders generally do not sue th...