Master License for Music Recordings
A master license gives the license holder the right to use a recorded piece of music in a media project such a film, TV show, commercial or another visual creation or audio project. A master license is obtained from the person who owns the recording (aka the master) which is the party that financed the recording. Usually, these rights reside with the record label if not the independent artist.
Master License vs. Sync License
Obtaining a master license is only the first step, because in order to use the track in its entirety, a synchronization or sync license is needed in addition. A master license differs from a sync license in that a sync license gives the license holder the right to use the composition and re-record a song for use in a media project, while a master license gives the license holder the right to use a previously recorded song in a media project. A sync license (from the publisher) is usually required in conjunction with a master license (from the master owner) to use a preexisting version of a song with a visual project.
A master license can only be issued for one song at a time. Even if someone wants to use an entire album in a project, a license must be obtained for each song individually.
Elements of a Master License
Several entities (including record companies) often share ownership of a piece of music, so everyone has to approve the use of the master recordings that they own jointly. This agreement covers the scope of how the music will be used, including the right to play or perform the music publicly. Compensation, screen credit, and representations and warranties by the musician and producer comprise additional terms included in the agreement, according to RocketLawyer.com.
Conflicts are bound to arise when the record label owns the master. For instance, if you'd be satisfied with a licensing fee of $5,000, but the record label owning the master and perhaps even the copyright demands $20,000. If that's not in the client's budget, they'll turn it down and find another option, leaving the record company the cold.
Retaining Your Master Rights
In a typical record deal, giving up master rights is the way in which a musician secures the financial support of the label to finance the recording and album release. If you actually repay the label’s investment (ie, your advance) through record sales (or earned artist royalties, a process called recoupment), then you may share in some of the master license revenues.
Holding the master rights is the ticket to generating income, and there's even more to be gotten now with the rise of streaming sites and mobile opportunities like Cricket. That raises the critical question of whether you should try to keep your master rights or sign them over to a label to secure a deal. However, it doesn't have to be all or nothing as there are some intermediate options:
Master rights reversion: When signing a record deal, you can negotiate for the return or reversion of master ownership to you after a set period of time. An album typically has a lifespan of one to three years before an artist releases the next one, so you can request that ownership revert to you after perhaps two to five years. Of course, it will then be up to you to negotiate any licensing deals as the label would be out of the picture.
Revenue share: In this model, an independent musician that doesn't want to deal with the music licensing business makes a deal with the label to serve as the master licensing representative. This master license deal gives the label a cut in the range of 15-25% of licensing earnings while allowing the artist to retain a large revenue share in addition to control of master recordings.
Learn more about sync licenses.