The Blanket License Explained

The U.S. Supreme Court summarized the virtues of the blanket license in CBS v. Broadcast Music, Inc., 441 U.S. 1 (1979) as follows:

"... the blanket license developed ... out of the practical situation in the marketplace: thousands of users, thousands of copyright owners and millions of compositions. Most users want unplanned, rapid and indemnified access to any and all of the repertory of compositions and the owners want a reliable method of collecting for the use of their copyrights...

"A middleman with a blanket license was an obvious necessity if the thousands of individual negotiations, a virtual impossibility were to be avoided. Also, ...(individual licenses would pose) a difficult and expensive reporting problem for the user and policing task for the copyright owner. Historically, the market for public performance rights organized itself largely around the single-fee blanket license, which gave unlimited access to the repertory and reliable protection against infringement." Id. at 20-22.

What That Means In Plain English

In the music industry, a blanket license is used to give permission to use music in a situation where issuing individual music licenses would be cumbersome. Although the term "blanket license" can have a few different applications, one common blanket license occurrence that people are likely to encounter in the music industry is a blanket license issued by a performance rights organization, such as BMI, SESAC and ASCAP, for the music they represent. These licenses are issued to radio stations, venues and other places that host public performances of music.

Performance rights societies use these exclusive rights to allow them to issue blanket licenses. A group - a radio station is a good example - will go a performance rights collection group and apply for a blanket license to be able to use the music represented by that group. In turn, the performance rights group will issue the blanket license - for a fee. The license allows that applicant to then use ALL of the music represented by the group. For example, if a radio station is issued a license by ASCAP, then that license gives them the right to use all of the music represented by ASCAP on their station. For this reason, most places that host public performances of music need blanket licenses from each performance rights society. Continuing with the example of radio stations, it would be difficult for a station to survive by only playing the music of one society's members - only playing music written by writers who are ASCAP members would exclude the station from playing a major hit that happens to have been written by a writer with a BMI membership.

When a blanket license is issued, the recipient must comply with certain tracking and reporting guidelines set out by the royalty collection group. They may be required to turn in playlists for a certain period of time or to report the set lists of shows played in their venue. These reporting criteria vary depending on who is using the music and how, as well as between performance rights agency. The fees for blanket licenses also vary wildly, depending on how heavily the license recipient uses music and how large of a listener base they reach. Large radio stations can pay millions in blanket licensing fees, while very small venues and businesses may only need to come up with a couple hundred dollars per year to get a license. The licensing fees collected from blanket licenses go to pay songwriters and publishers. Well at least that is how it is supposed to work in a perfect world.

by The Insiders