how other licensing fees work
a licensing fee can also refer to a sum paid to use intellectual property of various kinds such as a copyrighted work like a photograph or a logo that is owned by someone else for example a t shirt company that wants to sell shirts imprinted with a certain major league baseball team s logo would need to pay a licensing fee to get major league baseball s permission and possibly the permission of the team itself a television or movie company wanting to use a particular song in its soundtrack might have to pay for multiple licenses according to the american society of composers authors and publishers ascap which licenses more than 18 million songs and scores the producer would need to obtain a synchronization license for the right to synchronize a song or a piece of music with your visual image it must be obtained from the copyright owner of the music which is usually the publisher in addition the company would need to obtain a master use license for the right to reproduce a specific recording of a song from the relevant music label in one notably expensive example the producers of mad men reportedly paid about 250 000 to license the beatles song tomorrow never knows so that the character don draper could listen to it in one scene licensing fee vs royaltyroyalties are ongoing usage based payments for the right to use an asset or a property they are generally calculated as a percentage of gross revenue or net profit licensing fees by contrast are usually a fixed amount some businesses pay both licensing fees and royalties for example a franchisee might pay the parent franchiser an initial license fee for the right to use the franchise s name and processes plus regular royalties based on sales those royalties often average 5 to 9 annually depending on the franchise 