eli5: How does the licensing of music work? What are the prices like? Do you pay once for infinite uses?
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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.
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