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Well, I am not sure about is this is the right StackExchange site to ask this, but since can accept question about Software law, i think it's almost on topic here.

If I use creative commons music for non commercial usage in my project, it's fine if my final product is freeware.

But, what if it becomes ad-supported? It's considered commercial usage? And, if I do a paid ad-free version, this is commercial usage, i think.

Example: using this music as bgm in a game

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You should write under which CC license in specific the music is available (and add a link to the music) and then you should describe how you make use of the music within your software. E.g. even commercial music players are allowed to play CC'ed music w/o violating any licenses. –  hakre May 27 '11 at 12:44
    
Added the example –  Magnetic_dud May 27 '11 at 16:36
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2 Answers

Remember, there are different types of Creative Commons licences. If you pick music that does not have the NonCommercial condition, you don't need to worry about whether your software is free, ad-supported or paid-for (but do remember to check what other conditions apply, such as Attribution and NoDerivs).

I'm not a lawyer, but if you're making money, either directly from sales, or indirectly from selling adverts, then I would consider that commercial.

For example, the human-readable page of the Attribution-NonCommercial licence says:

Noncommercial — You may not use this work for commercial purposes.

The full legal code says:

You may not exercise any of the rights granted to You in Section 3 above in any manner that is primarily intended for or directed toward commercial advantage or private monetary compensation.

You'll get "private monetary compensation" from adverts.

Edit: so the added example is Attribution Noncommercial (3.0), which means you cannot just take it and use it in commercial software. However, Creative Commons licences are not exclusive:

Waiver — Any of the above conditions can be waived if you get permission from the copyright holder.

So you can still go and ask the creator (the copyright holder) directly for permission to use it how you want, and if you agree terms (free use, in return for something (money or credit)) then the CC licence no longer applies.

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But only for the software, and not for the music, right? –  hakre May 27 '11 at 12:45
    
What do you mean exactly? It doesn't matter how the music is used (played in a game, bundled with an mp3 player, etc), if you make money from the software or the music, you still have to respect all the conditions of Creative Commons licence. –  Hugo May 27 '11 at 12:56
    
Just imagine that the program is not a derivative work, for example a game that has a feature that users can download the music that is playing while they're solving puzzles. And as some initial suggestion links to music files under CC are offered. The music is only used for the users leisure which is obviously non-commercial, assuming the case the player is not getting monetary compensation by playing that game for a TV show for example. –  hakre May 27 '11 at 13:05
    
If the music is part of the game, CC must be respected between developer and musician. If the user is downloading the music (but using the game to do the actual downloading), I think the CC must then be respected between user and musician, and is probably ok. But I think the question was about the former case -- including the music in the software. –  Hugo May 27 '11 at 13:24
    
That's why I put a comment on top because the type of use is not really specified in the question so it's hard to answer unless more information is provided. –  hakre May 27 '11 at 13:39
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The best suggestion for the song you linked that I can give is that you talk with the original author about what you want to do and ask for permission. In case the license would limit the type of use you look forward to (which I assume but IANAL), the original author still can give you permission to compile the songs data into the executable binary of your game.

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