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Adaptr Blog
What does it cost to license music for my startup's app?
Posted by Giles Cassels
April 19, 2022

Music can energize your apps, bring life to your website, and transform everyday moments into a party. There’s no doubt that music is an essential element in creating motivating and exciting digital experiences for your customers. And not just any music—businesses need access to high-quality, popular music that will draw customers in. Startups need the pulling power that licensed music provides, and they need it quickly and at an affordable price.

If you’ve never had to license popular music before, you probably have no idea what is involved, and why should you? It’s a complex system, with many opportunities to put a foot wrong if you don’t know what you’re doing. Some large companies have whole departments and legal teams devoted to handling licensing, rights, and payments. As a startup, here’s what’s important to know about the requirements and costs relating to licensing music.

What does it cost to license music for my startup's app?

Cost of Licensing

Licensing music directly with the major record labels requires a substantial financial investment. First, there is the cost of lawyers and consultants to manage the negotiations, as most in-house corporate legal teams won’t have the requisite knowledge and experience in this specialized area of law. Experienced music attorneys in Los Angeles or New York City charge on average $400 to $800 per hour.

Then, there are the fees to be paid to the labels—for example, Universal, Sony, Warner, and Merlin—which have been known to require large upfront guarantees which are generally non-refundable. After negotiating with and paying the labels, it may then be necessary to do the same with the publishers of the music, and if the music is going to be broadcast, licenses may also need to be obtained and paid for through the performing rights organizations (PROs).

 

Opportunity Cost

If you agree that time is money, there can be an enormous cost associated with the extended time involved in negotiating direct deals with all the relevant record labels, music publishers, etc. It can take from 6 months to 2 years to finalize the deals before your company can actually begin using any music. Although it is difficult to calculate the financial costs of this type of delay, it is a frustratingly long period of time for any company to have its projects held in suspended animation. For a startup, it could be disastrous.

There is also an opportunity cost to limiting yourself to royalty-free or stock music, or using no music at all. Both options will leave your customers with a subpar experience. You only get one chance to engage a user—why waste it? Make a powerful first impression. Make sure your music is as high quality as every other feature of your product.

 

Cost of Infrastructure and Integration

One of the crucial things to understand is that when we talk about licensing music for your business, there is in fact quite a bit more involved than simply the licensing aspect.

The technological infrastructure required for the secure handling of licensed music is an expensive element in the equation that is not always given the requisite consideration. The platform must be absolutely secure and include an ingestion engine for the digital music files, a streaming engine, and a reporting engine that tracks and reports on the music usage in order to accurately pay the rightsholders. Audits must be conducted to verify that the data is complete and correct. All of this is necessary in order to satisfy the standards of the record labels. Obtaining this infrastructure from a third-party provider can cost $150K+ for setup alone.

 

Cost of Infringement

Risking copyright infringement is quite possibly the most expensive avenue a company could take. When music is used illegally, without the proper licenses, the company makes itself vulnerable to potentially ruinous lawsuits, litigation, and settlements.

In June of 2021, gaming company Roblox was sued for over $200 million for copyright infringement by the National Music Publishers’ Association, acting on behalf of a number of their music publisher members. By September, Roblox and the NMPA had come to an agreement settling the lawsuit, the terms of which were not disclosed. The full costs of infringement can include not only legal fees and court-ordered penalties, but also lasting damage to a company’s reputation and brand.

 

Adaptr

Startups may not need or want to know all the behind-the-scenes details of how their music is licensed—they just want the best music available, right away, and to feel confident that they are obtaining it in a legal manner that is appropriately compensating rightsholders. For this, Adaptr was born.

  • Adaptr offers the largest catalog of popular music pre-cleared for startups, freeing you from  negotiations with record labels, music publishers, and performing rights organizations, so that your music can be up and running in just a few days.
     
  • Adaptr supplies the secure platform for receiving music, streaming, tracking, reporting for payment purposes, and auditing for verification, which can be easily integrated into apps and digital experiences using software development kits (SDKs). 

  • Adaptr also protects you legally, managing compliance and providing indemnification for your company. Adaptr is the premier partner for startups looking to build relationships within the music industry.

 

Your next step: Speak with a Music Specialist at Feed Media Group to see if Adaptr is the right choice for your startup.

 

 

 

 

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