A Guide To New Media Licensing Terms
Due to our location near Silicon Valley, we work with many new media producers to help them clear music rights and find creative solutions to complex technology-related licensing issues. Here is a guide to some terms that can be relevant to a conversation about licensing music for apps, widgets and viral media.
The Digital Millennium Copyright Act (DMCA): is a United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization (WIPO). It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures (commonly known as digital rights management or DRM) that control access to copyrighted works. It also criminalizes the act of circumventing an access control, whether or not there is actual infringement of copyright itself. In addition, the DMCA heightens the penalties for copyright infringement on the Internet.
For the act in its entirety go here: http://www.copyright.gov/legislation/dmca.pdf
Interactive Streaming: Interactive streaming is when a digital file is transmitted electronically to a computer or other device at the specific request of the end user in order to allow the end user to listen to a recording or a play list contemporaneously with the user’s request. Interactive streams are sometimes referred to as on-demand streams. For services which provide an interactive service or on-demand access to certain tracks or artists (E.g. YouTube), the statutory license does not apply, and a direct license must be obtained from the copyright holder
Interactive Subscription Services: “Interactive” services enable the consumer to interact with the service to hear a specific recording and to create a personalized radio station and play list. (E.g., Pandora and Rhapsody)
Limited Downloads: A limited download is a digital file that is delivered electronically to a computer or other device to reside there on a limited basis. There are two types of limited downloads: time-limited download (for example, the song resides on the computer for 30 days) and use-limited download (for example, the song can be heard 12 times before it can no longer be played). Limited downloads are sometimes called tethered downloads.
Non-Interactive Subscription Services: Non-Interactive Subscription services do not allow the consumer to interact with the service and select specific recordings. Generally, it is one continuous stream of music. These services are very generally defined as those in which the user experience mimics a radio broadcast. Web casting royalties are only paid for “non-interactive” radio and subscription services. Unlike Rhapsody and Napster’s interactive services, the consumer cannot pick and choose which particular songs or artists he wants to hear. The two FCC-approved non-interactive satellite digital subscription services are XM Satellite and Sirius.
Webcasting Royalties: Under the Digital Millennium Copyright Act of 1995 (“DMCA”), Congress provided for a “Webcasting Royalty” to be paid to the owners and/or exclusive licensees of master recordings being streamed.
Peer to Peer (P2P): Also referred to as file sharing, peer-to-peer is a popular type of application in which, rather than accessing files from a central server, users access a common network hub and open up portions of their own computer’s hard drive to the public for downloading. Any unlicensed P2P activity is illegal and can result in criminal prosecution and/or fines.
Permanent Digital Downloads: A permanent digital download (PDD) is each individual delivery of a phonorecord by digital transmission of a sound recording (embodying a musical composition) resulting in a reproduction made by or for the recipient, which may be retained and played by the recipient on a permanent basis. PDDs are sometimes referred to as full downloads or untethered downloads. Each time a song is purchased as a PDD revenue is received via a Fixed Pay Rate (i.e. iTunes, Napster, Rhapsody and Amazon) or a Subscription Pay Rate (i.e. emusic)
Revenue Share: This has multiple meanings depending on the context. On the Internet, revenue sharing is also known as cost per sale, and accounts for about 80% of affiliate compensation programs. E-commerce web site operators using revenue sharing pay affiliates a certain percentage of sales revenues (usually excluding tax, shipping and other 3rd party cost that the customer pays) generated by customers whom the affiliate refer via various advertising methods. (E.g., iTunes Affiliate program and Amazon Affiliate program)
Ring-back: Ring-back tones (aka “Answer Tones”) substitute an excerpt of a particular master sound recording of a composition for the sound a caller normally hears while waiting for the person called to answer the phone.
Ringtone: A ringtone is an excerpt of a musical composition embodied in a digital file and rendered into audio. Ringtones are stored in an end-user’s mobile telephone, pager or other portable communications device and played whenever the device activates its ring or alert function (upon the arrival of a call, message or other notification).
There are two basic types of ringtones: Phonic Ringtones and Pre-Recorded Ringtones. Phonic Ringtones are, most commonly, standard MIDI sound files that are either monophonic, where the ringtones are recreated using standard single notes, or polyphonic, where notes can be played simultaneously creating harmony and/or counterpoint. Pre-Recorded ringtones play actual clips from sound recordings.
SoundExchange: SoundExchange is a non-profit performance rights organization that collects statutory royalties from satellite radio (such as SIRIUS XM), Internet radio, cable TV music channels, and similar platforms for streaming sound recordings. The Copyright Royalty Board, which is appointed by The U.S. Library of Congress, has entrusted SoundExchange as the sole entity in the United States to collect and distribute these digital performance royalties on behalf of featured recording artists, master rights owners (like record labels), and independent artists who record and own their masters.
Satellite radio or subscription radio: is a digital radio signal that is broadcast by a communications satellite, which covers a much wider geographical range than terrestrial radio signals. Satellite radio offers an alternative to ground-based radio services in some countries, notably the United States. Mobile services, such as Sirius, and XM allow listeners to roam across an entire continent, listening to the same audio programming anywhere they go.
Streams or Streaming: A stream is when someone listens to your song but does not own it and has not downloaded it. Consumers typically listen to streams as part of a subscription model where they pay a monthly fee to stream a certain amount of music. (E.g., Rhapsody, Mog, Rdio). There are two ways to listen to a song as a stream: “Tethered” and “Non-Tethered.”
- A Tethered Stream means the media player must be connected (or “tethered”) to the Internet at all times in order to listen to the music.
- A Non-Tethered Stream means the media player (either a computer, mp3 player or mobile phone) only needs to be connected to the Internet once a month for the service to confirm that the user has paid their monthly subscription fee. After one month, if the person either stops paying their fee OR if the person does not connect their device to the Internet to verify that they have paid, the songs will stop playing on their computer or portable player.
Web casting: Web casting generally refers to the online streaming, either live or on demand, of an audio or video source to various simultaneous users. Web casting is sometimes referred to as Internet radio or Internet television. Web casters may be Internet-only services that transmit several different genre-based channels, re-transmitters of traditional AM/FM broadcasts, or services that syndicate music programming as background music on Web sites. HFA does NOT handle web-casting licensing.
User Generated Content: User Generated Content (UGC) refers to various kinds of websites where either entire or large portions of the content on the site are created by the users of the site (as opposed to the administrators). Also referred to as “consumer generated media” (CGM) or “user created content” (UCC), UGC includes contents such as blogs, podcasts and user product reviews.
Virtual Goods: are non-physical objects that are purchased for use in online communities or online games. [1] They have no intrinsic value and, by definition, are intangible. [1] Virtual goods include such things as digital gifts [2][3] and digital clothing for avatars. Virtual goods may be classified as services instead of goods. Sales of virtual goods are sometimes referred to as micro transactions. They are sold by companies that operate social networks, community sites, or online games. (E.g., Farmville, Zombie Farm)
Widgets: A widget is a stand-alone application that can be embedded into third party sites by any user on a page where they have rights of authorship (e.g. a webpage, blog, or profile on a social media site). Monetize your own digital content or link to Amazon’s digital products with the widgets below. These widgets provide compelling audio and video content for your site. Your viewers can preview music, movies or TV shows before buying. (E.g., Amazon MP3 Clips Widget)
Sources:
http://www.harryfox.com/public/DigitalDefinitions.jsp#20
http://www.tunecore.com/faq
- By Jenna Levy