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Licensing: Digital platforms and profiting from artists’ music

On Behalf of | May 8, 2024 | Licensing Agreements

Streaming platforms such as Spotify and Apple Music and social networking apps like Triller and TikTok have revolutionized how people consume audio content. These platforms, acting as licensees, can profit from an artist’s music. An artist’s catalog becomes accessible to users once a license agreement is established with the licensor (usually the record label representing the artist).

However, this access comes with many considerations. The most critical is not just the proper execution of the agreement but, more importantly, its adherence.

Following the licensing agreement: A critical step

Licensing agreements are the legal frameworks that permit streaming platforms to host and profit from an artist’s music. Such agreements outline the terms and conditions for licensees to use copyrighted music. They cover aspects like:

  1. Royalty payments: The agreement specifies how the licensee (the platform) will pay the licensor (the label and, consequently, the artist) for each stream.
  2. Territorial rights: The agreement may specify the places where the licensee can stream the music.
  3. Exclusivity: Some agreements may grant the licensee exclusive rights to the music for a specific time.

Adherence to these terms is crucial. Failure to comply can lead to legal disputes and potential losses for the licensee (streaming platform).

The consequences of non-compliance: Sony and Triller

Sony Music Entertainment, a major record label, had a licensing agreement with Triller that allowed the platform to use music from its artist catalog. However, Triller failed to uphold its end of the agreement by neglecting to pay Sony the agreed licensing fees. This breach of contract led Sony to take legal action against the social networking app.

After a legal battle, the two companies reached a settlement in which Triller agreed to pay the owed amounts and ensure future compliance with the licensing terms. This situation highlights the potential legal ramifications for platforms that fail to adhere to licensing agreements.

Legal action can be worth pursuing

Profiting from artists’ music is a major revenue stream for music streaming and social networking platforms. However, these platforms must abide by the terms of their licensing agreements. This ensures a fair return for the artists. Also, it enables the platforms to operate legally and maintain credibility in the music industry.

Companies that have concerns about copyright infringement should consider consulting with an attorney. They can provide guidance on the nuances of licensing agreements, help negotiate fair terms and assist in pursuing litigation if necessary.


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