The Cold Cash Facts About Music Licensing

Where music meets licensing, there’s money to be made. How much money? “I have synched quite a few thousand songs into productions over the years,” states Peter Jansson of CRC Jianian Co., “and have charged anywhere between US$1.00 and US$250,000 for each one.”

That’s correct: he said a quarter of a million dollars. And there are a great many places to earn money from music. For example, there are more TV shows on more cable channels than ever before. There are oodles of commercials. There are tons of electronic games and toys. There are corporate video productions galore. There are big movies, little movies, and direct-to-DVD movies. And they all are potential places to put your music, if the rights can be cleared.

Goldmine or Minefield
The world of music clearance can be a goldmine or a minefield. We heard about the quarter-million-buck goldmine. “Having said that,” Jansson adds, “I think an average fee is usually between $4,000 – $6,000 per side (i.e. Master & Synch). It depends on how badly they want to use the song and how big a hit it was.” Those two words, “Master” and “Synch” indicate part of the problem for the average singer/songwriter who hopes to have a song appear on a soundtrack. Before you can start earning money, there’s a lot to know.

The facts are so important that NARIP, the National Association of Record Industry Professionals, has Stacey Powells lead workshops on the topic. Powells, currently clearing music for On Air With Ryan Seacrest, says “This is a much more complex part of the business than most people realize, but it can be extremely lucrative for artists, so there’s a great feeling to passing along this information.”

A Little Tech Talk
Music can be used in four broad categories under copyright law: Adaptation, Recording, Reproduction, and Public Performance. Depending on where and how someone is going to use a song, there are mechanical rights and synchronization rights that have to be negotiated, and the various parties involved may include the songwriter, publisher, and record company, usually holder of the master rights.

Well, that last part doesn’t sound so complicated. Oh really? Consider that there may be multiple songwriters, each with their own publisher for their share of the song. Song copyrights are held by music publishers (which may be the artist, but more often is a third party), while sound recordings (the masters) are controlled by record companies (which also may be the artist, come to think of it).

The Facts of the Matter
So what, exactly, is “Music Clearance”? Simple: getting permission from rights holders to use music in your production. But what rights? The song’s copyright is held by the writers (or the estate of the artists, or whoever was sold the rights). The master recording is held by whoever controls the recorded version of the song. Ah, but which version of the song? The one the singer/songwriter recorded? The one recorded with Russian lyrics? The jazz instrumental? The one recorded by the metal-reggae band?

Consider this: you can get permission from the publisher without permission from the record company — if you record a new version of the song. But without the publisher’s permission, the master recording license does you no good at all.

The field is very competitive. Don Grierson, former head of A&R at Epic/Sony, Capitol Records, and EMI-America, and often a music supervisor, consultant, and executive producer, notes that “nearly everyone in the music industry seems to be aiming at the film/TV and commercial licensing markets. There is intense competition. It can come down to relationships on some occasions, but often it is determined by the ease with which you can obtain the clearance.”

Negotiating the Fees
CRC Jianian’s Peter Jansson quickly lists some of the variables: “When it comes to Synch Licensing, there are a number of factors that determine what the fee is going to be, such as: territory (USA? World? Provincial?), media (Theatrical only? Radio? Television? DVD/Video? New technology?), usage (Featured Instrumental/On Camera? Background Instrumental? Background/Vocal?), length (Entire composition? 30 seconds or part thereof?), version (re-record or original recording), to name just a few.”

But even once you have sorted out who owns what and where something is going to be used, there’s the legal terminology, with contracts likely to contain such phrases as “World excluding the BRT’s,” “Rear Window,” “now known or hereafter devised,” “MFN,” “Pro Rata Share,” “Third Party Payments,” and even “Audit.”

True, you don’t need to know all of these things if you’re a songwriter, recording artist, manager, agent, record executive, film/TV production professional, or advertising agency executive. But the more you know, the better. Not only will you be more comfortable with the business side of the music business, you’ll be in a better position to guide a career — your own or your clients’ — to more rewarding choices.

“Just knowing a little about these topics allows you to follow the conversations these clearance guys have with my clients and all their other representatives,” says one manager of several musical acts. “And knowing a little can help a lot.”

Real-life Examples
Sometimes you learn by doing. “The very first time I licensed a song on my own,” says Marc Ferrari of MasterSource Music Catalog, “I never got paid for the license. The production company released the movie (Son of Darkness 2) then went bankrupt. What a way to start a business!! I have had better luck with nearly 1,600 licenses since then!”

Don Grierson, when acting as a music supervisor for motion pictures, says “Those who represent songs often call me and ask ‘What are you looking for?’ and it’s amazing how rapidly that can change. The music requirements for any given project, or even any given scene in a film, can change depending on the director, the producer, etc. And whatever mood is being established in the scene may change in postproduction, requiring a change in the music.”

Mistakes to Avoid
Where people are involved, there can be errors. “Publishing and record companies sell and sublease and assign rights, some of which they did not own to begin with,” points out Janet Fisher of Goodnight Kiss Music. She quickly lists a few more potential problems: “New companies file new cue sheets and suddenly a song is attributed to the wrong writer, a title is changed, a publisher forgotten; or sometimes a copyright holder just stops filing all paper work, including change of address forms.”

One indie artist who has had several compositions in TV shows says, “Being an indie artist can be a huge advantage. Music supervisors are always looking for quality master recordings. An indie artist can sign off on a master synch music license in a day. Time is always an issue, and TV supervisors love indie artists because of the lack of major label red tape which often leaves them without clearance in time.”

Goodnight Kiss’ Fisher agrees: “Obviously dealing with an indie catalogue is going to be more affordable, and easier to work with. The large entities are not as hungry as the small, and our songs are no more than once-removed from the source.”

Another who agrees is music supervisor Frankie Pine, who has worked on all the Steven Soderbergh film and TV projects in the past decade. “I have had at least one indie recording in every film,” she states, “and it is often much easier to get them to sign off on an agreement. In a business that is so time-intensive, that is a real plus.”

Helping out indie musicians is Barry Coffing of Uprising Entertainment. “We go searching for great independent music,” he notes, “and the great thing about this business is that there is so much excellent music being made in so many categories.”

Musician vs. Music Supervisor
Nancy Luca is a musician who plays so often on both coasts, she has an L.A. band, a New York band, and a Florida band, and does session guitar work (her solos were on two Heineken commercials during the Super Bowl broadcast). She observes that “There are people who make a lot of money writing music for television that ’sounds like’ other artists. It would be great if they would use the real artists like me who have great songs but no break with a big label. I am for licensing just to let people hear the real music — the stuff that was written with heart and mind, not just for a paycheck.”

Joel C. High, Vice President of music and soundtracks for Lions Gate Entertainment, displays the excitement that many of us have for making music work with images. “We often have directors who are greatly inspired by music and who may be passionate about acquiring a song that wouldn’t normally fit in the budget of that film or television project. That’s when we, as music supervisors, have to try to bring that same fervor to the negotiating process. We try to go to bat for our filmmakers in such a way that it benefits the picture and gives the best possible exposure for the musical artist. We want to get the absolutely perfect music for the scene and often the only way that can happen is by getting the recording artist to see the merits of having their song in a film – to consider the way their song is used so they will see benefits beyond just the financial one.”

A Director of Copyright and Licensing at a major independent publishing company had this to say: “Obviously, licensing music in film/TV is a wonderful way to get exposure, although for new artists, it will probably not be lucrative. And of course, there are things writers/artists should take into consideration when someone requests to use their music: Avoid giving broad rights away for free! This sets a bad precedent in the community, especially for new artists/writers, and it de-values their work.”

Did this person have any ideas for working out a compromise? Certainly: “If a writer is eager to be involved in a project, and the producer wants the use for FREE, here are a few suggestions when negotiating. First, try and reduce the terms (e.g. instead of perpetuity, reduce the term to 10 years; instead of all media, reduce to all TV or theatrical only; and instead of worldwide rights, try and reduce to U.S. only). If the producer is not agreeable to this, then the writer should request some sort of ’step deal.’ Very little money (if any) is paid up front, but should the production be successful, they are obligated to compensate the writer at certain ‘milestones’.” The feeling is that “if the producer starts making money, so should the writers of the musical works involved.”

Music supervisors Frankie Pine and P.J. Bloom have the best piece of advice for artists placing music: “When you get the call, say Thank You!” says Bloom. “There are so many people trying to get songs onto soundtracks, that it is important to get in the door and create a relationship.”

The Bottom Line
Fisher has a lovely metaphorical summary for this story: “Like any part of the music business, licensing can be feast or famine, goldmine or plain old shaft — but like any part of any business, the best protection resides in employing those with experience and integrity. If I were looking for a goldmine, I’d find an experienced miner who had found gold before.”