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What is music licensing?

Music licensing is an agreement to use copyrighted music

Music licensing is a legal agreement between buyer and seller to use copyrighted music. A music licensing agreement compensates the music creator for specific uses of their music in different types of formats, like tv commercials, podcasts, or films.

A recent example of a major company failing to attain the correct music licenses is Peloton. The exercise bike manufacturer offers online classes that are backed by music tracks. In early 2019, the American PRO, NMPA, sued Pelton for $150 million for use of unlicensed songs from such major artists as Lady Gaga. Peloton had failed to get the proper sync licenses as their company quickly grew and expanded from small studios into online classes. Peloton reached a settlement for an undisclosed amount with the organization in early 2020. 

Take note music creators! Today, Peloton has one of the highest payout rates per stream, 3.1 cents per song.