eli5: How does the licensing of music work? What are the prices like? Do you pay once for infinite uses?
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Depends on what deal is signed.
It can be for using it once in a product for a fixed price, paying every time it’s used or paying a single price for using it indefinitely etc.
It all comes down on what they can agree upon.
How do cover songs work? If a famous artist covers another famous artist song, is it split 50/50? Does the original artist now own the rights to the new version?
The short answer is that it is pay per use.
If you’re making a movie, and you want to use a particular song in the movie, you contact the rights holder and negotiate a price. A buddy of mine who made a low-budget movie wanted to use Nick Cave’s “People Just Ain’t No Good” in a particular scene. He called up Cave’s people, and they wanted $80,000 for it. I’m sure he could have talked them down, but it still would have been too much.
Songs on Spotify pay something like $0.004 per click.
Songs you hear on the radio get paid some similar amount for each play. SOCAN is the organization in Canada that administers it all, ASCAP is the organization in the U.S.
For television series, it’s similar to movies. Lots of the contracts only covered use for airing on TV or cable, and did not cover use in DVDs. I’ve heard some commentary tracks on DVD where cast members complain about how the music that aired was awesome, and for DVD it was all replaced by crap.
To have one concrete example: For Germany the GEMA organization acts as the official middle man between music rights holders on one side and companies that license the music and individuals that play music on the other side.
They have lots of different licenses depending on whether you want to play licensed music at an outside event, in your cáfe, on the radio or whatever. For internet streaming like Spotify or Apple music the conditions are [here](https://www.gema.de/fileadmin/user_upload/dokumente/musiknutzer/tarife/Tarife_VRA/tarif_vr_od8.pdf) and it’s 0.75€ to 1.75€ per end-user per month, but at least 15% of what the user pays, so for a Spotify fee of 9.99€ per month it’s at least 1.50€ per month of fee.
I’ve always assumed commercial radio must have a bulk usage agreement, e.g. “You can play the same song 50 times a same week for one low price”.
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