MUSIC LICENSING 101 – Jesse Harlin (December 2007)

IN 1982, MUSIC LICENSING JOURNEYED into the world of video game development with the game JOURNEY ESCAPE for the Atari 2600—the game was a vertical-scroller that contained eight bars of Journey’s hit song “Don’t Stop Believing.” Ever since then, a mutually beneficial relationship has evolved between record labels and game developers. With the rise in pirated music, labels these days are more interested than ever in finding additional revenue streams to help off-set slumping sales. Games can benefit by attracting the interest of a band’s already-installed fan base or gain valuable street credibility by steeping a game in the culture of its target audience. Twenty- seven years on from JOURNEY ESCAPE, the success of games such as GUITAR HERO and GRAND THEFT AUTO prove that developers are still devising creative new uses for licensed music.

Knowing where to start and what to ask for can be very helpful at the outset. However, since music licensing essentially boils down to making money off of someone else’s creative work, it is a century old topic with a well-established bureaucracy. Any amount of music licensing will inevitably lead to your company’s business affairs department and legal contracts of some kind.

KNOW YOUR RIGHTS

All music licensing begins and ends with rights. The licensable rights for any piece of music break down into multiple categories, the rights that are applicable to us here are master use rights and publishing rights. Master use rights are the rights associated with a particular recording of a song. This means that a song as widely covered as The Beatles’ “Yesterday” actually has over 3,000 separate sets of master use rights, each one specific to an individual version of the song.

Publishing rights, however, are harder to define. These are the rights associated with the most basic elements of what defines a given work as a unique piece of music. Typically this means its melody and/or lyrics, but only if a song has them. For instance, publisher Edition Peters owns the publishing rights to John Cage’s all-silence “4’33”.”

Which rights need to be licensed depends on the usage of the song in- game. A development team looking to use the original recording of Led Zeppelin’s “Black Dog” for an in-game radio station would need to license both the master use and publishing rights. Meanwhile, a development team looking to re-record the song for an interactive karaoke game would only need to license the song’s publishing rights.

Knowing which rights you need to obtain is the easy part. The hard part is tracking down and signing usage agreements with all of the rights holders. The master use rights are owned by the record label or music library company that owns the requested recording. Thankfully, master use rights cannot be divided up between multiple rights holders and are therefore fairly easy to get permission to use (called clearance).

Publishing rights, on the other hand, are divided between anyone involved in the writing of the song. This can mean a single songwriter, each member of a band, or any number of other complicated additional rights holders such as producers or managers. If a song contains samples of other recordings, the publishing rights holders of the original recording need to be tracked down as well. In practice, this can take a long time. One publishing company may only own 15% of the rights, leaving the remaining 85% ambiguous. Unless 100% of the publishing rights can be cleared, the song cannot be licensed. Plus, since asking for clearance on a song costs nothing, it makes sense to try and clear more songs than you might need in the hope that asking for 50 songs might result in a fully cleared list of 30.

KNOW YOUR BUDGET

Once clearance is requested, the rights holders will come back with the licensing fee. Both master use and publishing rights will have separate fees—the larger the artist or the more well-known the song, the larger the licensing fee. On average, licensing pop and rock music by an established artist can cost around $4,000 for the master use rights and $6,000 for the publishing rights per song. Some cost as little as $1,500 for each set of rights. Some can cost up to $10,000 for the publishing rights alone. Some publishers make ridiculous requests such as $250,000 and up for clearance.

Luckily, everything in the world of music licensing is open for negotiation. How a song is being used may affect its cost. If it’s going to be featured in trailers and commercials, the cost could be higher over music used as generic background filler. Additionally, some rights holders will lower their fees if they are told what other rights holders are quoting for clearance. Some rights holders might make a special deal if you license music from them in bulk. The negotiation process is long and involves repeated phone calls and emails. Always make sure to plan for plenty of time when trying to license music.

Lastly, many of the big music publishers such as EMI, Sony, and Warner Chappell are embracing streaming Internet technology as a means of helping to streamline the music selection process. Sites like emifilmtv.com, onestoptrax.com, and sonyatv.com put the depth of their licensable catalogues online for quick perusal with filterable search terms, full lyric sheets, digitized audio clips, and contact information for beginning the long process of clearing your soundtrack.  

Leave a Reply

You must be logged in to post a comment.