Since “free” is in the phrase “Royalty Free Music” there has been quite a bit of confusion as to whether the music is free. It isn’t. The “free” in “Royalty Free” refers to the fact that once you have licensed the track for a particular use you do not have to continue to make royalty payments to use the track.
Let’s look at two tracks, one a Royalty Free Track and another a Rights Managed Track. Pretend I am a television producer and am creating a television commercial for Joe’s Tire Shop. There are two tracks I am interested in using in my spot. “Hit the Road” which is a Royalty Free Track (RF) and “Hot Cars” which is a Rights Managed (RM) track.
Royalty Free Licensing Example:
Let’s look at Royalty Free Licensing of “Hit The Road (RF) first. There are many RF libraries on the web. Some have one fee licenses that allow the user to use the track (typically one use per license) in any project for a flat license fee. An example of this type of library is Pond5.com. When you license a track from Pond5.com, you pay a flat fee and can use the music in just about any type of project from a YouTube video to a television commercial. Other libraries have a tiered pricing structure. My personal licensing site AudioUnderscores.com uses a royalty free tiered pricing structure.
Back to our track, the track “Hit The Road (RF) is in a Royalty Free Library that does not have tiered pricing based on the use. You pay the license fee one time and you can use the music for the life of your project. So, what does that mean? If the television spot runs for ten years, you never have to pay more money to continue to use the track.
Rights Managed Licensing Example:
Let’s look at licensing the track “Hot Cars (RM)” which is a rights managed track. The licenses used for rights managed tracks are not as standardized as RF licenses. Typically, with a rights managed license, you get to use the track for a specified amount of time for a particular use. In our example, we want to license “Hot Cars (RM)” for our national television spot. Most RM licenses have a broadcast window. With a broadcast window, you pay a license fee to use the track for a period of time. We plan to use the “Hot Cars (RM) track in a national TV spot for three months. We then negotiate the license with the RM library and pay the licensing fee. If the spot is doing very well and we decide to run it for another three months, we will need to pay another fee to the RM company for the right to extend the license.
Depending on the popularity of the song, RM licenses can be very expensive. Several years ago, I worked with a client that wanted to license a popular Aretha Franklin song for their TV commercial. They wanted to license the song and record their version of it. The 3-month license was over $10,000. I can’t imagine what the original recording or the track would have cost.
Rights-managed licenses are typically more expensive than Royalty free licenses and take longer to negotiate.
So, if RM licenses are more expensive and restrictive, why would anyone go that route rather than the Royalty Free licensing route? Typically, RM libraries have higher quality music than RF libraries. That is changing quickly but as a general rule of thumb, RM libraries are much more selective in the music they add to their library.
RF libraries are an incredible value but finding a great track can feel like looking for a needle in a haystack. Many have thousands of tracks with only a handful of writers creating great work surrounded by much weaker tracks.
Performing Rights Organizations (PRO):
Another wrinkle in the music licensing world are Performing Rights Organizations also know as PROs. Each country has one or multiple PROs. Examples are ASCAP, BMI, SESAC, GEMA…. When a piece of music is performed, a PRO collects money and pays the writer directly. In the United States, money is collected from the venue, website, or station playing (performing) the music. Television stations, radio stations, websites etc. have licenses with each PRO and pay a fee to each PRO. When a piece of music plays on their station, website, etc, they file a cue sheet with the PRO that lists the music played. The PRO compiles the cue sheet and pays the writers based on the use.
There is a fair amount of debate on the web whether or not music registered with PROs can be called royalty free. Libraries like AudioJungle.net and iStockPhoto.com do not allow PRO registered music in their libraries. Other libraries such as Pond5.com and Productiontrax.com allow PRO registered tracks in their libraries.
Which Library Is Right For You?
As a composer, which library is right for you? The short answer is that it is different for each composer. There are composers that have a great deal of success with each type of library. It may take some time experimenting with different libraries to find one or more that work for you. For a complete list of libraries visit MusicLibraryReport.com.