...include just about anyone who plays music in a public place -- even those who play "hold" music for their business. These include television networks, cable television stations, radio stations, background music services like MUZAK, colleges and universities, concert presenters, symphony orchestras, Web sites, bars, restaurants, hotels, theme parks, skating rinks, bowling alleys, circuses, you name it -- if they play music, they have to have a license and pay royalties. In many countries (not the US) a download is also considered performance. So there is a mechanical and performance royalty paid. Interactive streaming services enable the users to choose songs without any restrictions from a vast catalogue of several million titles. They offer different models. In the ad-supported version the consumer gets the music for free. This so-called freemium model is usually limited in time and bandwidth.
- There is no statutory license for these on- demand services, which means that they need to obtain all that music through direct negotiations. This can take an average of two years, gobs of up-front cash, equity arrangements with the labels and no certainty of securing catalog.
- Spotify can obtain blanket licenses from the PROs, but unlike Pandora, it must license sound recordings directly from the rights holders. What Spotify pays sound recoding copyright holders depends not only on the negotiated rate, but also whether the stream is ad-supported, i.e., on the service's free platform, or premium, i.e., on the service's paid subscription platform, and the geographic location of the service and the listener.
- YouTube is by far the best known and widely used video streaming platform. It enables its users to upload their (self-made) videos. Thus, YouTube is a so called user generated content platform. Music videos are a very popular content on YouTube. Since most of them are copyrighted, it is a copyright infringement to upload them if you are not the video owner.
- YouTube and the National Music Publishers Association (NMPA) in the US signed an agreement that gives royalties to songwriters for content uploaded by them, as well as, all videos uploaded by YouTube users containing any of the songwriter's content. The royalties are generated by ad revenue based on the popularity of the particular video. By using their tool, Content ID, YouTube finds all the videos related to an artist/songwriter, identifies the videos correctly and presents the original creator(s) with three options: keep it up, take it down or make money off of it (monetization).
- Most songwriters will choose the third option. To have their work identified, they provide Content ID with their original audio tracks, and it finds all related materials across the site. Content ID will even identify videos with ties to the provided audio tracks, including someone playing an acoustic version of a popular song, all the way up to, a shaky footage of the actual artist playing the song to a sold out arena.