Starting a Music Licensing Company

There are several questions you must ask yourself before you start a music licensing company.

1.  Is starting a music licensing company right for me?
Music licensing takes a lot of patience.  As you dive into it, you'll discover how vague it can be.  If you're thinking you're going to make thousands of dollars right away, and that royalty checks will be handed out to you every day - you've thought wrong.  Read this full article before you decide whether or not you'd like to start a music licensing company.

2.  Do I have enough music to start a licensing company?
Look at the successful music licensing companies out there.  Look at APM Music.  They have thousands of top-notch songs in their library.  You will need to be competitive.  I'm not saying you need thousands of songs to start a licensing company, but you will need at LEAST 20-30 tracks to start, and need to have new content being made frequently.  It's very difficult to pitch your band's CD to potential licensees and have a guaranteed success.  Having a wide variety of music and a constantly updated library of music in your hands would be most effective.


3.  Do I have the patience to start a music licensing company?
Music licensing takes patience.  It takes a lot of time and investment to get started.  It's not CRAZY expensive to start a licensing company, but you probably won't see some decent cash-flow for a good year or so - unless you get really lucky.

On top of not seeing an immediate steady income from music licensing, you're going to spend a lot of time making phone calls to producers and music supervisors, mailing CD's, copyrighting music, adding music titles to your Performing Rights Organization (PRO) account, and if you have multiple artists - distributing necessary royalties, creating and signing multiple contracts, etc.  Be sure you're going to be willing to do some good office work the duration of your company's existence.

To top everything off, you MUST act professional.  Often times, when a music supervisor finds a song in a library of music he/she likes - they'll come back.  However, if you don't speak in a professional manner to your customers, or try to put them first, you may never get any customers, and you'll fail.

4.  What type of licenses will I be doing?
Not all licensing companies license the same type licenses.  Some only license synch and master licenses for TV, Game, and broadcast use.  Some only offer mechanical licenses.  You may decide to go through an agency like HFA for certain types of licenses, and do the rest on your own - or you may decide to do each type of license.  It's your choice.


5.  Who will I be selling my licenses to?
You will need to decide what type of music you will have in your library and who you need to pitch your music to.  Finding a music supervisor is as easy as doing an IMDB search, or watching the credits of a TV show for the production company.  Once you have at least the production company's info, request contact info from them.  If you are polite, patient, and professional, most places will be happy to get any available contact information to you.


6.  Do I have the funds necessary to start a music licensing company?
Starting a music licensing company isn't incredibly expensive, but not cheap for the average at-home musician.  To simply start the business, expect to pay between $300-$500 to just start the business - more if you can't come up with cost effective solutions for your website, business location, etc.

7.  Are you an agency for other publishers or a publisher for composers/artists, or both?
A music licensing agency simply licenses music on behalf of other publishers with libraries of music of their own - all performance and publishing royalties will go to your clients, you will only collect a percentage of the licensing fee you collect (about half.)

On the other hand, a music licensing company that acts as publisher for individual composers, artists, etc., has the right to publisher's share of royalties on top of a percentage of the licensing fee (about half.)  Acting as BOTH, you will need to set up different agreements (contracts) for each type of client you represent.  It takes a bit more work, but doing both will most likely profit you the most.


Now that you have gone through and answered/figured out every preliminary question listed above...


It's time to start.

Step 1:  Get licensed to start a business in your town.
First, file a fictitious name statement.  This will serve as your business name.  This way, you can accept payments under "My Business Name" as apposed to your name.  This not only looks more professional, but makes your business easy to remember.  Your business name can be anything as long as it's not already taken.  Make sure it's unique, but easy to remember.

Next, get a business license.  Getting a business license is not difficult, it just costs a few bucks.  Doing this varies from county to county, and sometimes, city to city.  Check with your city to see what their fees are to file a fictitious name statement and obtain a business license.

Step 2:  Join a Performing Rights Organization (PRO)
You will need to join a PRO as a publisher if you're going to publish music on behalf of -and represent the music of individual artists.  There are three PRO's in the US available for you to join:

1.  BMI:  This is one of the most popular PRO's to join, specifically for composers/writers.  It's free to join as a writer, but if you're a publisher, there is a preliminary $150 registration fee.

2.  ASCAP:  Joining ASCAP as either a writer, publisher, or both will cost you $35.  If you apply for both at the same time, mailing in the forms together, you only need to pay the fee once.  However, if you mail them separately, you will have to pay the fee twice.

3.  SESAC:  This is the smallest PRO.  You have to apply to join with them, and they don't take just anyone.  They are very selective.  If you meet their preliminary requirements, it is free to join.

Each PRO works differently, visit their websites to get more info about how they distribute royalties, how they work, etc. and decide for yourself which PRO is best for you.

Step 3:  Build a Website
If you can't build one yourself, contact a professional web designer who can build one for you.  Having a website is only beneficial to your business.  You can have all your music available for preview and purchase, and you can even license your songs through your website.

Because music supervisors are often in a time crunch, it's important to make it as easy as possible for them to license and obtain your music quickly.

Step 4:  Make Your Music Publicly Available
The easiest way to do this is through your website.  Make your FULL LENGTH songs available to stream online for free.  I recommend doing this so that your customers will know the song they hear is right for them. Most of your customers probably won't even bother if they can't hear your songs in their entirety.

Step 5:  Make CDs
This isn't a requirement, but it will help you pitch your music to potential customers.  Send free "Demo CD's" that feature a selection of your best songs.  Make sure the CD and its casing look as professional as possible. It's too easy to look at a home made CD and immediately judge it by its appearance.

Step 6:  Write your license agreements
Generally, your music licenses will be generic, so type a generic template you can modify per customer.  If you're licensing your music online, there is a service called LicenseQuote (www.licensequote.com) where you can license your music online.  They have generic licenses that can be used, and have the option for custom licenses.  This will take a bit of a load of your shoulders.

Be sure you understand the standard rates for each type of license.  You can find this information at the Copyright Office's website.

Step 7:  Pitch Your Music
Now that you have your website up, your CD's made, and your business ready, contact as many potential customers as possible and let them know what you have to offer.  Give them reasons why they should license your music, and offer them a free CD or direct them to your website where they can listen to your music online for free.  Don't be too pushy.  Give them time, they are busy and have deadlines to meet.  Give them a couple weeks before contacting them.

Don't rely on just one or two music supervisors.  Contact as many as you can that you have music they can use.  Get to know what they've worked on before you contact them; you can then compare your music with music they've used before - let them know your music is a good fit for them.

Be professional, patient, yet persistent, and offer top-notch quality music.  If you do all this, you have a good chance at success.