Posted on 19th Apr 2018
By Jeff Brabec & Todd Brabec
LISTEN CLOSELY TO THE NEXT SONG YOU HEAR and you might be able to pick out a sound that’s part of neither the written music nor the performance. If you listen just right, what you’ll hear is the sweet ka- ching of music royalties being paid to those who bring us the melodies and lyrics. But, like a club DJ’s crossfade, music royalties are in transition, sometimes for the worse and sometimes for the better. As some distribution channels fade in importance, others increase in value and acceptance. Those changes present challenges for all stakeholders, including lawyers, advisors, producers, lenders, investors and, of course, creators and music publishers — the entities that generally administer song catalogs.
Listening to and enjoying music is one thing, but getting paid for it as a songwriter, composer or lyricist is another. This article will provide a quick explanation of how writers of music and lyrics and their music publishers receive compensation from some of the primary media which generate income and how the music licensing process that generates that income works. This field comprises micro pennies in compensation for many while making millions of dollars in royalties for others.
In any discussion involving a song though, it is important to understand the difference between a musical composition — the song — and the sound recording — the record. Under U.S. Copyright Law, each has its own distinct copyright, as well as rights accompanying that copyright. Also, in most cases, the owners will be different with a music publisher owning the song and a record label owning the master recording. Therefore, in most cases where a song and record are being licensed together for use in a project (e.g., a Beatles or Bruno Mars song and the original recording being used in a feature film), separate license negotiations with the song and sound recording owners must be conducted before permission can be granted.
The United States broadcasted 455 scripted original television programs in 2016 on network, cable and digital programs among countless unscripted programs. This variegated reality in television can provide composers, songwriters, lyricists and the publishing companies that represent them with enormous opportunities for short and long-term earnings.
Sometimes the licenses are simple and straight forward as in the case of successful dramatic series. Other times, in the case of music- and dance-centric competition series, they can be extremely complex, with multiple options for different media, term, duration and territory all exercisable by the licensee, the production company, at some designated time in the future (e.g., within 24 months of the broadcast of the episode or the airing of the final episode of a particular season). But, one thing all television licenses for compositions share in common is that they all are what are called synchronization or “sync” licenses, a term that reflects the concept that the music is being played in timed synchronization with the picture.
On one end of the spectrum is the “all media excluding theatrical” synchronization license, which allows the producer of a television series or program to distribute the series episode in virtually every medium “now known or hereafter devised” (including home and personal video) excluding only theatrical (motion picture theater) exhibition. This type of license — which is virtually always a long term “life of copyright” license — is more expensive because of the almost unlimited media distribution that it allows. Because of its flexibility and duration, this license is the favored type of agreement for licensing pre- existing music for many network television programs. In effect, once a composition is put into an episode of a series under an “all media excluding theatrical” license, there will be one fee paid to the music publisher with no additional payments due from the producer. However, there will be songwriter and music publisher “backend” performance royalties from ASCAP, BMI, SESAC, Global Music Rights and foreign performing rights societies throughout the world when the series episode containing the composition is exhibited via television, the internet or other media licensed by the societies. This type of “all media excluding theatrical distribution” license will expand to include theatrical — with an additional fee paid — in the future with the advent of select television episodes being shown in motion picture theatres (e.g., the last two season four episodes of Game of Thrones, which were released in the IMAX format in motion picture theaters in the United States).
On the other end of the spectrum are television sync licenses with a fairly limited initial distribution territory and fairly short durational terms from two to five years, but which feature multiple options to expand the rights, territory, media and term in the future depending upon the success of the series and the needs of the producer. The value to the producer of these types of “multiple option” licenses is that the rights to compositions can be secured for a lesser initial price because the term and rights granted are limited in nature. This structure also affords the producer the flexibility to maintain and expand its rights to continue to use the music if there is a reason to do so as in the case of a series becoming popular on a worldwide rather than limited territory basis.
The benefit of this type of option approach is that there will be additional fees paid if and when each option is exercised by the producer. Some examples of the type of series that utilize such an approach are The Voice, So You Think You Can Dance, Dancing with the Stars and America’s Got Talent.
Contract options available to the producer, depending on the program, may include:
Changing the territory of a U.S. and Canada license to the world or universe;
extending the initial short term for a subsequent identical term or to the life of copyright;
permitting the use of a composition and scene from the series to be shown on a jumbotron as part of a live tour of performers after the season finale;
providing the right to use short portions of a composition as part of recaps in subsequent shows;
permitting use of the composition as a bumper — the music that is played in and out of commercials — or in an app which uses all or a portion of a performance from the show, or as a ringtone or ringback or audio or audio-visual download; and many others.
Another lucrative area is the use of compositions in the promos for upcoming television programming. Fees for this type of license are set on a weekly or monthly basis depending on the nature of the promo, including the territory and media in which it will be distributed. For example, promo licenses may refer to all forms of television, all forms of television and radio, unlimited internet, radio only, all television media in the United States and unlimited internet on a worldwide basis and so forth. The duration of the promo license is usually between one to two weeks but can be up to four weeks or even a number of days, all with a separate price point.
To learn more about MUSIC, MONEY AND SUCCESS: THE INSIDERS GUIDE TO MAKING MONEY IN THE MUSIC BUSINESS , click here
This book tells you HOW THE BUSINESS WORKS, WHAT YOU MUST KNOW TO SUCCEED, AND HOW MUCH MONEY YOU CAN MAKE in Films, Television, Video Games, ASCAP, BMI and SESAC, Record Sales, Downloads and Streams, Advertising Commercials, Ringtones and Ringbacks, Interactive Dolls and Toys, Broadway, New Media, Scoring Contracts and Synch Licenses, Music Publishing, Foreign Countries and MUCH MORE.
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