Music Licensing Explained: Rights, Costs, MFN and Clearance

You find the right song. The edit suddenly works. Then the quote comes back with language like: “€30,000 per side, on a 100% publishing basis, MFN and subject to artist approval.”

If you do not work in music rights every day, that sentence can raise more questions than it answers.

This guide explains what the main music licensing terms mean, what drives the cost and what actually happens between the first request and final clearance.

The short answer

To use an existing recording in an advertisement, trailer, game campaign or film, you will usually need permission for two separate rights:

• The master right, covering the recording you hear
• The publishing right, covering the underlying song and lyrics

The campaign scope then defines what you are asking to license. This includes the territories, media, term, paid promotion, number of edits and any creative changes.

Every relevant rights holder must approve the use. One missing approval can stop the track from being cleared.

Why does one song have two sides?

A released track contains two different pieces of copyright.

The master

The master is the actual recording. It may be owned or controlled by a record label, the performing artist or another company.

If you want to use the original recording, the master owner needs to approve it.

The publishing

The publishing side covers the composition: the melody, lyrics and other original musical elements written by the songwriters.

One publisher may control the full song. But many songs have several writers, each represented by a different publisher. Those shares may be split across companies and territories.

All relevant publishing shares normally need to be cleared before the composition can be used.

What about samples?

A recording or composition may contain a sample or interpolation from another work. That can add another layer of rights and approvals.

This is one reason ownership research matters. A song that looks simple at first can involve more parties once the complete rights chain is checked.

What does “per side” mean?

“Per side” separates the master fee from the publishing fee.

For example:

• €30,000 for the master
• €30,000 for the publishing
• €60,000 all-in rights-holder fees

If a quote says €30,000 per side, the total is usually €60,000.

Always check what “all-in” covers. In many music licensing conversations it means the combined master and publishing fees. It does not automatically include music supervision, clearance work, production, legal costs, VAT, withholding tax or bank charges.

Those points should be stated clearly in the budget.

What does “100% publishing basis” mean?

Publishing ownership is often divided between several parties. A quote on a 100% basis gives the value of the whole composition before each publisher’s share is calculated.

Imagine the publishing fee is agreed at €30,000 on a 100% basis and the shares are:

• Publisher A: 45%
• Publisher B: 30%
• Publisher C: 15%
• Publisher D: 10%

Their fees would normally be:

• Publisher A: €13,500
• Publisher B: €9,000
• Publisher C: €4,500
• Publisher D: €3,000

Together, those shares add up to the €30,000 publishing fee.

This is different from each publisher receiving €30,000. The words “100% basis” are important.

What does MFN mean in music licensing?

MFN means most favoured nation. In practical terms, it protects a rights holder from receiving less favourable financial terms than another party covered by the same MFN agreement.

MFN can apply in different ways:

• Between the master and publishing sides
• Between the publishers sharing one composition
• Between several songs used in the same production
• To specific terms such as the fee, term, media or renewal conditions

The exact wording matters.

MFN does not always mean every party receives the same euro amount. A publisher controlling 15% may still receive 15% of the agreed 100% publishing fee. The protection may relate to the fee basis rather than the final amount paid to that publisher.

Why can one higher quote affect the full budget?

Take the earlier example. The target is €30,000 for the master and €30,000 for publishing, making €60,000 all-in.

Now imagine a publisher controlling 15% asks for a €50,000 publishing fee on a 100% basis.

Its 15% share would be €7,500. But if all publishers are protected by MFN, the other publishing shares may also need to be calculated on the €50,000 basis.

And if the master and publishing sides are MFN, the master fee may also rise to €50,000.

That could move the total rights-holder budget from €60,000 to €100,000.

This is not automatic in every deal. It depends on the MFN wording and what can be negotiated. But it is why a higher request from one party needs to be assessed against the full clearance, not only that party’s share.

What do common clearance status terms mean?

Submitted or pending

The request has been sent to the rights holder. It has not been approved.

Indicative fee or starting point

A rights holder has given an early view of the likely fee. It may help with budgeting, but it is not a formal quote or approval.

Subject to artist approval

The label or publisher may be willing to discuss the use, but the artist, songwriter, manager or estate still needs to approve it.

For major artists, this can be the most important step. The quality of the edit, the brand, the context and how the music is used can all influence the decision.

Approved in principle

The main creative and commercial request has received a positive response, but final terms, contracts or internal sign-off may still be outstanding.

Subject to contract

The parties have agreed the broad position, but the licence still needs to be negotiated and signed.

Fully cleared

Every required rights holder has approved the use and the agreed conditions for release have been met. This will usually include written licence terms and may include signature, invoicing or payment requirements.

A track should not be treated as fully cleared while a required share or approval is still missing.

What drives the cost of music licensing?

There is no fixed rate for licensing a song. The fee is shaped by the track and the complete campaign request.

The song and artist

A current hit, global artist or culturally important catalogue track will often cost more. But fame is not the only factor. Some artists are selective about brands, products or political and social context.

The type of project

A small independent film, a game reveal, a streaming trailer and a global brand campaign create different levels of exposure and commercial value.

Territory

A licence for one country will normally be different from worldwide use. International online campaigns may need worldwide rights even when paid media runs in selected markets.

Media

“Online” is often too broad to price accurately. Rights holders may distinguish between:

• Organic social posts
• Paid social and pre-roll
• YouTube and platform channels
• Websites and digital advertising
• Television
• Cinema
• Video on demand and streaming
• Events, showcases and award entries
• Out-of-home media
• Game platforms and console stores

A clear media list avoids expensive changes later.

Term

Six weeks, six months, one year and perpetuity are different requests. A longer term normally costs more.

It also helps to separate active campaign use from archive or holdover use. A licence may allow an old post to remain online after the paid campaign ends, while prohibiting new posts or promotion.

Paid media

Rights holders look at the scale and duration of paid promotion. Four weeks of paid social in one market is different from a global media buy across several platforms.

Number of edits and versions

The main film, cutdowns, teasers, social versions, local edits and alternative durations should be included in the request.

More versions can increase the fee or require wider wording in the licence.

Prominence and duration of use

A song used for five seconds in the background is different from a track carrying a full ninety-second trailer. Opening titles, end cards, lyrics on screen and featured performances may also affect the quote.

Exclusivity and category restrictions

A request to keep the artist or song away from competitors can add significant cost. Rights holders will want to understand the product category, duration and territories covered by the restriction.

Creative changes

Lyric changes, rewritten arrangements, new vocals, mashups, translations, covers and trailerized recordings may need additional approval.

A new recording can remove the need to license the original master. It does not remove the need to clear the composition.

Timing and complexity

A short deadline does not always increase the licence fee, but it reduces room to negotiate and develop alternatives.

Multiple publishers, samples, estates and artist approvals can also make a clearance more complex.

Which costs should be in the music budget?

A complete music budget can contain several separate lines.

Rights-holder fees

These are the master and publishing licence fees paid for the use of the song.

Music supervision and clearance

This covers the work needed to research ownership, approach the correct parties, present the use, negotiate terms, manage approvals and take the licences through to completion.

Production

A cover, re-recording, trailerized version, edit, mix or bespoke score can add arrangement, performer, studio and production costs.

Taxes and transaction costs

VAT, withholding tax, bank charges and currency conversion may sit outside the quoted rights fees unless the agreement says otherwise.

The phrase “all-in” should therefore always be followed by a clear explanation of what is included.

How does the music clearance process work?

1. Define what the music needs to achieve

The creative idea comes first. What should the song do for the film? Where should it build, hold back or create space? Why does this specific artist or track matter?

This helps us protect the idea when rights, timing or budget questions appear.

2. Confirm the campaign scope

We collect the practical details rights holders need:

• Project, brand, game, film or series
• Track and recording version
• Campaign description and creative context
• Territory
• Media
• Term
• Paid promotion
• Number and duration of edits
• Exclusivity
• Launch date
• Music budget
• Any requested edits, covers or lyric changes

When the project is confidential, a secure link, watermark or NDA may be needed before creative material can be shared.

3. Research the rights

We identify the master owner, publishers, songwriter shares, samples and any additional approval parties.

Ownership can change, so current confirmation matters.

4. Check feasibility

Before an edit becomes fully dependent on the song, we assess whether the track is likely to be available, whether the budget is realistic and where the main risks sit.

A strong alternative can be developed in parallel when the deadline requires it.

5. Submit the request

Each rights holder receives the same core information, including the creative, scope, budget and timing.

A clear request helps labels, publishers, managers and artists make a decision without unnecessary back-and-forth.

6. Manage quotes and approvals

Responses rarely arrive at the same time. One party may approve quickly. Another may ask for the trailer, a higher fee or a change to the scope.

We track each share separately and keep the client updated on what is confirmed, what is indicative and what is still pending.

7. Align the terms

The master and publishing licences need to cover the same real-world use. Fees, MFN, term, territory, media, cutdowns, paid promotion, renewals and archive rights are aligned before release.

8. Complete the licences

Once all approvals are in, the licences are reviewed, signed and processed. The production then receives a clear record of what can be used, where, for how long and under which conditions.

How long does music clearance take?

A straightforward request can move within a few working days. A major artist or complicated song can take several weeks.

There is no guaranteed response time because rights holders, artists and songwriters need to review the use.

Starting early gives the team more room to negotiate, protect the edit and keep another route available.

Can we start editing before the song is cleared?

Yes, teams often work with a temporary track while clearance is in progress. But that carries risk.

The song may be refused, the fee may exceed the budget or the final licence may not cover the intended campaign. Avoid locking the complete edit around one unapproved track without a workable alternative.

And do not release the film until every required right has been cleared.

Can a cover make clearance easier?

Sometimes.

A cover or re-recording creates a new master, so you may not need the original label’s master licence. You still need permission for the underlying composition.

The publishers or writers may also need to approve the arrangement, lyric changes and the context of the campaign.

A cover is therefore a different clearance route, not a way around music rights.

What happens if one rights holder says no?

If a required master owner, publisher, writer or artist refuses the use, the song cannot be used as requested.

Sometimes the scope can be changed. A shorter term, fewer media, selected territories or a different recording may create a route forward.

If the refusal is final, the practical answer is another track, a cover where the composition remains available, or bespoke music built around the same creative brief.

What should we send for a first rights check?

Send us:

• The exact song and artist
• A link to the recording
• The project and client
• A short description of the creative idea
• Territory, media and term
• Paid promotion plans
• Number of edits
• Launch date
• Available music budget
• The current edit, storyboard or treatment if available

If some details are still open, that is fine. We can help shape the request before it goes to the rights holders.

Need help with a clearance?

Clear Music handles music clearance for games, film, trailers and advertising. We research the rights, approach the relevant parties, manage artist approvals, negotiate the terms and take the process through to final licence.

Send us the track, the creative, the scope, the budget and the deadline. We will tell you what is clear, what is still open and what the strongest next step is.

Start a music clearance request.