APEX Media - Music Licensing in IFE: Where Is The Industry Now?

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Following various high-profile lawsuits against airlines and content service providers (CSPs) in the US regarding the use of unlicensed music in 2013 and 2014, music rights owners have worked to legitimize the in-flight entertainment (IFE) market, but just how much have things changed since then?

APEX Media caught up with Iain Kemplay, managing director of Kemplay Consulting, who has just released a new set of guidelines on music rights and music licensing in IFE content to help the airline industry through this period of transformation.

According to Kemplay, the fundamentals of what needs to be licensed and by whom remain the same: A record label will own and administer the mechanical and performing rights for an artist’s recordings, while music publishers (and/or a performing rights organization) will own and administer the mechanical and performing rights for the composition of the songs recorded. These need to cover all territories where the content production and delivery process takes place, as well as the country where the airline is based (once the content is on board, it is governed by the national copyright law of the airline’s base location).

However, the way in which these licenses are being acquired is changing in order to increase their coverage, consistency and transparency. In the past, Kemplay said, airlines and CSPs have obtained a patchwork of licenses through third party music rights organizations, with separate mechanical and performing rights across different territories. Now, airlines and CSPs are encouraged to work directly with record labels, label distributors and music publishers to secure “genuinely global licenses covering full production, delivery and onboard use and access to label catalogues,” he continued.

“Airlines can now gain better access to vast international catalogs of music as well as knowledge and support concerning new releases and local artists.” – Iain Kemplay, Kemplay Consulting

As airlines increasingly offer interactive music streaming services, licenses are also being expanded to cover both linear and on-demand audio and video music services.

Kemplay told APEX Media that these changes kicked in during 2016, when some record labels and music publishers introduced a standard rate card structure, which covers all mechanical and performing rights, for services that are free for passengers. Under the new rate card, “monthly costs are calculated using a fixed rate per aircraft, which varies depending on three things: the aircraft capacity, the type of music services offered, and the rights owner’s share of the total music offering on board.”

Paid-for services, by contrast, are usually licensed on a “percentage of revenue basis,” Kemplay noted.

For Kemplay, the benefits of working directly with the rights owners – rather than collective third party organizations – are obvious. “Airlines can now gain better access to vast international catalogs of music as well as knowledge and support concerning new releases and local artists. This not only enables them to provide passengers with a broader range of music titles, but also means they can be more creative with their on board music services. The partnerships that both Turkish Airlines and American Airlines have struck up with Universal Music Group have already demonstrated this.”

But improving the passenger experience isn’t the only incentive for airlines and CSPs to make sure they are licensing music correctly – there’s also the ongoing threat of litigation.

So far, the legal focus has mainly been on the United States, but now there’s a shift towards other geographies, with PRS for Music’s international department declaring in a recent article for M Magazine that it is cracking down on Middle East carriers with a view to drawing attention to music rights across the region.

For Kemplay, the key to a successful music licensing strategy for IFE is frequent communication. “What’s important is to maintain a dialogue with music rights owners as music services are expanded and developed. That will allow licenses to be revised when necessary and also make way for new business models.”

To view Kemplay Consulting’s full guidelines on music rights and licensing music in IFE content, click here.