Music economic compensation review
Music has three economic components: (this is for Denmark, in other countries the names of the society's are different)
- Royalties, which are paid to the owner of the recording, such as a record label, which then pays the artist.
- GRAMEX, which is paid to the musicians who performed on the recording and the owner of the recording.
- KODA/NCB, which is paid to the composer and songwriter.
In principle, all three must be paid if the music is released on a record label and the recording is registered with KODA (NCB) and GRAMEX.
In Denmark, however, GRAMEX must be paid for almost any public performance (including broadcast), regardless of whether you are registered, but streaming services such as Spotify fall outside of GRAMEX.
NCB (Nordic Copyright Bureau) represents the rights of composers on releases, while KODA is responsible for public performance - that is, NCB is for sales and KODA is for performance. Therefore, a CD released in Scandinavia always says NCB.
With regard to KODA, it depends on whether those who created the musical work being used are members of KODA or one of KODA's sister organizations, which is probably 99.9%. But some music belongs to no associations/companies. These pieces of music are either self-managed or not managed at all. For example, 1000TRAX owns its own music and manages all agreements for public performance.
And that's NOT what is called royalty-free music. Royalty-free music is typically only royalty-free after payment for consumption. Often, there are many exceptions to the exemption, which can result in additional costs for the user, as royalty-free use is often considered "if used privately". For example, if it is used on TV, there is almost always an additional payment that can be quite large.
All three forms of fees are of a private/business nature and are thus not associated with anything public, such as the Ministry of Culture, etc. These are private companies that charge fees on behalf of their customers (record labels, composers, and musicians).
Therefore, if you play recorded music in a public place, it is very likely that a fee must be paid.
However, if the music is NOT released and NOT registered with KODA or GRAMEX, then only what is agreed with the provider needs to be paid.
NB. As a business owner you need to know:
- It is NOT enough to pay a license.
- You are NOT exempt from KODA just because you only play the radio.
- You are NOT exempt from KODA just because you only play your own CDs or cassettes.