LI-003Licensing and rights
What Is a Blanket License, and How Is Its Fee Set?
A blanket license lets a station, a venue or a production use a whole repertoire for a term at one fee. Who grants it, what the agreement holds, and how the price is reached.
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A blanket license is a single agreement that lets a broadcaster, a venue, an online service or a production company use every work in a repertoire, as often as it needs, for a stated term, in exchange for one fee. In music it is granted for public performance by a performing rights organization such as ASCAP or BMI, or by the UK's PPL PRS, and for synchronization by a production library. The fee is not a list price: it follows the licensee's revenue, size or output, and in the United States a federal court can set it when the two sides cannot agree.
What is a blanket license?
The term describes the shape of the permission, not the right being licensed. A per-use license names one work and one use: this cue, in this episode, for this many seconds. A blanket license names a whole catalog and a period of time, and leaves the choice of works to the licensee. When the Supreme Court examined the practice in Broadcast Music, Inc. v. CBS in 1979, it described the blanket license as the right to perform any and all of the compositions in the repertoire, as often as the licensee wishes, for the stated term.
Two families of blanket license meet in production and library music. The first is the performance license that a performing rights organization (PRO) grants to anyone who plays music to the public: radio and television stations, streaming services, bars, gyms, shops. The second is the synchronization blanket that a production library sells to a broadcaster or a producer, covering the use of any track in its catalog in the programs made during the term. A channel that drops library cues into its shows usually needs both, because the library's blanket clears the cue into the picture and the PRO's blanket covers the broadcast that follows.
Who grants a blanket license for music?
Each organization can license only the works, and the shares of works, that its own members have entrusted to it. In the United States that means ASCAP, BMI, SESAC and Global Music Rights each issue their own blanket, and a radio station that wants the full range of popular music holds several of them.
In the United Kingdom, PPL and PRS for Music formed a jointly owned company, PPL PRS Ltd, in 2018 to collect public performance fees. A business now takes a single license from it, TheMusicLicence, and the money is passed on in two streams: through PPL to record companies and performers, and through PRS for Music to songwriters, composers and publishers. In Canada, the Copyright Board establishes the royalties that a collective society may charge for the works it administers.
On the library side, the blanket is granted by the publisher that controls the catalog, which in production music is usually the library itself. In the UK the license fees for production music are standardized nationally and set by MCPS; in the United States each library sets its own.
What does a blanket license agreement contain?
Whatever the issuer, the agreement turns on the same handful of terms, and reading them in order tells a licensee what it has actually bought.
- The repertoire. Which catalog is covered, and whether works added during the term come in automatically.
- The licensed use. Public performance, broadcast, online transmission or synchronization, each named. A use that is not named is not licensed, a point covered in detail in what a blanket license leaves outside its scope.
- Premises, channels or productions. The venue, the station, the service or the list of series the license attaches to.
- Term and territory. Usually a year or more for a PRO license, and a named country or region.
- The fee formula. A flat sum, a percentage of revenue, or a tariff calculated from the size and type of the business.
- Reporting and audit. The licensee's duty to report what it used, and the issuer's right to check. Those reports decide how the fee is shared out among writers and publishers, which is why a cue sheet decides who is paid when a choir is broadcast.
How is the price of a blanket license set?
There is no single price for a blanket license, because the fee is built to follow the scale of the use rather than the number of works played. Three methods cover most agreements.
A share of revenue. Broadcasters and online services generally pay a percentage of what they earn. ASCAP's early radio licenses were already priced as a fixed percentage of each station's revenue, and local radio and television stations in the United States now negotiate their terms collectively, through bodies such as the Radio Music License Committee and the Television Music License Committee, rather than station by station.
A published tariff. Shops, bars, gyms and other businesses pay from a tariff for their category. For TheMusicLicence, PPL PRS lists the factors as the type of business, whether the music is background or featured entertainment, the size of the premises (measured by floor area, number of employees or capacity, depending on the tariff), the equipment used to play recorded music, and any live performances.
A negotiated library blanket. A production library prices its blanket against the volume and reach of the licensee's output: the number of channels or series covered, the media, the territory and the length of the term. Because the fee is fixed for the term, every extra cue a channel uses lowers the effective cost of each one, which is the reason a busy broadcaster takes the blanket and an occasional producer does not.
| Licensee | Usual issuer | What the fee follows |
|---|---|---|
| Commercial radio or TV station (US) | ASCAP, BMI, SESAC, GMR | Station revenue, on terms negotiated by industry committees or set by a court |
| Online music service (US) | ASCAP, BMI | A percentage of revenue, often fixed in rate court |
| Shop, bar or gym (UK) | PPL PRS Ltd | Published tariff: type of premises, use, size, equipment, live music |
| Broadcaster using library cues (UK) | MCPS | Nationally standardized production music rates |
| Channel or producer using library cues (US) | The library | Negotiated: output, media, territory, term |
However the fee is reached, the money is divided according to what is reported, and the report is only as good as the codes that travel with each cue: the ISRC and ISWC that identify a recording and its composition.
Who decides whether the fee is reasonable?
In the United States the answer goes back to a fight over price. When ASCAP sought much higher radio fees, the big broadcasters refused: from January 1 to October 29, 1941, no ASCAP music was broadcast on NBC and CBS stations, and BMI, which broadcasters had founded in 1939, filled the gap. In 1941 the Justice Department also settled antitrust cases against both organizations with consent decrees that remain in force; ASCAP's was last amended in June 2001 and BMI's in November 1994. Under them, both must offer blanket licenses at fees either negotiated by the parties or set by a federal judge in the Southern District of New York, the court known as the rate court. In ASCAP's case, the burden of proving that a requested fee is reasonable stays with ASCAP.
The blanket license itself was challenged as price fixing. In Broadcast Music, Inc. v. CBS, decided on April 17, 1979, the Supreme Court refused to treat it as unlawful in itself, pointing to the savings it brings in transaction, monitoring and enforcement costs, and sent the case back for review under the rule of reason. The Justice Department reopened the decrees for review in 2019 and closed that review on January 15, 2021 without changing them. SESAC and Global Music Rights are not parties to those decrees.
In the UK, a dispute over a collecting society's terms can go to the Copyright Tribunal. After ITV and PRS for Music failed to agree a license in 2014, their dispute went before the tribunal, which ruled for PRS in July 2016.
Blanket, per-program or per-use: which costs less?
The blanket is the default because it is the simplest, not because it is always the cheapest. ASCAP's decree requires it to offer broadcasters a per-program license as well: the license covers the whole repertory, but the station pays only for programs that contain ASCAP music not otherwise licensed. The 2001 amendment extended that option to any broadcaster in the broad sense, including online services carrying similar content, created a per-segment license for online and background music users, and requires ASCAP to give users a genuine choice between these forms. A talk station that airs little music can come out ahead on a per-program license; a music station rarely does, because almost every hour would count.
The same arithmetic applies to library music. A producer who needs two cues for one documentary pays per use, often called a needle drop. A channel that fills hours of daily programming with library cues takes the blanket, because counting and pricing each cue would cost more in paperwork than the fee saves.
Questions readers ask about blanket licenses
Does one blanket license cover all music?
No. A PRO blanket covers only the works, and the shares of works, that the organization represents. A song co-written by members of two different organizations is split between them, so a station or venue that plays a broad range of music generally holds a license from each.
Is a blanket license the same as a royalty-free license?
No. A royalty-free license is usually a one-time payment for a collection of tracks, with the permitted uses set out in its terms, and the music stays under copyright. A blanket license runs for a term and is renewed, with the fee recalculated each time. Royalty-free does not take a track out of the performance system either: if it is registered with a PRO, its broadcast falls under the station's PRO blanket and is reported like any other cue.
Can a business negotiate the price of a blanket license?
Large users usually do, directly or through an industry committee, and in the United States an ASCAP or BMI licensee that cannot agree on terms can ask the rate court to set the fee. Small businesses generally pay the published tariff for their category, and in the UK a disputed tariff can be referred to the Copyright Tribunal.
