There are a few subjects in podcasting that will always invite discussion. Chief among them, at this point in time, is licensing of music for use in a podcast. Usually, that topic is enough to create a lot of heat, but not a lot of light. The first thing that people need to know is that you do need a license (or licenses) to play almost all of the music found in your CD collections in a podcast.

What we don't know, because of the misfit nature of the podcast medium, is how much we owe, and to whom. There are various scenarios under which pretty much everyone involved in creating music has a claim to a royalty payment in connection with a podcast. What follows is an explanation of each of those royalty schemes.

In February, I wrote a blog entry titled Podcasting, music and the law, which lists all of the licensing agents having some claim to music made available in a podcast. (I note that I am not a lawyer, much less a copyright lawyer, so naturally this is not legal advice.) First, there are the performing rights organizations (or PROs), namely ASCAP, BMI and SESAC in the US, which collect royalties for songwriters and publishers. These royalties give you the right to the songwriter's work; similar payments are made by terrestrial broadcasters in the US. For a license to play webcast audio, ASCAP charges an annual base of $288 for music in its license pool. BMI charges $283 for a similar license, which unlike ASCAP's is prorated for the year -- but also commits you to a three-year term. SESAC, a smaller PRO based in Nashville, collects $168 per year. From those figures, I threw out a back-of-the-envelope estimate of $750 which has rattled around over the last several weeks. (The precise figure is $739 for the full calendar year.)

Last month, Actual Lawyer Elizabeth L. Fletcher wrote an analysis on Blawgzine, in which she suggested that the royalty costs are "not as daunting as podcasters surmise." The figures she cited are the same as mine, though they take the prorated BMI license into consideration. Fletcher also adds that podcasters are allowed under these royalties to derive up to $15,000 in income from their shows before the royalties go any higher.

So let's say the cost is $495 for the year, to cover ASCAP ($288) and BMI ($207) for the year from April 7th on. Whether that is a particularly friendly cost to podcasters who don't advertise (and who may get 500 or 100 listeners if they're lucky) is left as an exercise to the reader. What is clear from this license is that the average hobbyist is not being offered a place at the table. (For those still considering these licenses, do read them carefully, as they apply limits to how long a show may be made available, and whether a playlist may be provided. There are also auditing requirements which require attention.)

What is also becoming clearer is that the PROs are not the only ones staking a claim. As Fletcher notes in a followup, many (including myself) believe a podcast is not strictly a webcast. Webcasts are streams, ephemeral, not intended to be saved. A podcast, on the other hand, is an MP3 file offered for download, and downloads, by their nature as digital duplicates, have another set of rightsholders to satisfy. These are the mechanical rights, administered by the Harry Fox Agency for the benefit of the publisher, and the master use right, which is typically owned by the record company.

Mechanical rights (that is, the right to make a copy) are available under a statutory license, meaning you can pay a flat 8.5 cents for each song of 5 minutes or less in duration. Songfile, which is run by Harry Fox, allows you to obtain this license in blocks as small as 500, which comes to $42.50 per track. Now your hour-long radio show, which contains ten songs, costs $425 per episode, and that may not be all.

You still need to obtain the master use right. This right, held by the owner of the recording, is not subject to any statutory license whatsoever. In other words, the owner can charge you any fee they choose. They can even offer you the rights for free. Or they can turn you down. If you as a podcaster do manage to get this far, you may get very lucky and find a label which understands the potential reach of podcasting and is willing to offer its music as "podsafe". You could also get very unlucky and find one that thinks you're just the iTunes Music Store without the DRM, and decides to charge you a dollar per track per download. I can do that math too, but I don't want to. (Side note: just because music isn't from an RIAA-member label does not ipso facto make it "safe". Independent labels own master rights, too. Ask permission.)

Most discussions of licensing costs I've read bring up the doctrine of "fair use." It's common to cite fair use, and be justified in doing so, in various familiar situations (e.g., recording TV shows, ripping to MP3). However, when it comes to uses like playing complete songs, or using samples as voiceover music, without such elements as criticism or satire to support it, the case against that being fair use is pretty cut and dried. Claims that using less than 30 or 60 seconds, or reproducing them under a certain bitrate, qualifies as fair use are urban legends, as far as I've been able to determine.

So this is where we make our scene: the PROs see you as a webcaster, and charge you by the stream, despite the fact you're not streaming. Harry Fox, from the publisher's point of view, sees you as a distributor, despite the fact that you're not offering the tracks individually. And the record company might see you as a reseller, despite the fact that you may not be selling anything to anyone. In which case, they might think you're a pirate.

See? It's tricky. It seems logical to assume that one outlet was never meant to be both a webcaster and a distributor: to adopt a physical analogy, you can't be both the radio station and the CD at the same time. But podcasts offer properties of both. In a sense, a podcast is a platypus -- a new, confounding species that will require observation and experimentation before we reach any kind of resolution on how it's classified. In time, we're likely to get clearer terms that may allow some podcasters to turn a profit with licensed music, but by the strictest interpretation of these royalty systems, that day is clearly not today.

In a followup, I'll try to describe the ecosystem inhabited by this particular platypus, and offer what I think would be reasonable licensing terms for podcast music.