The following is not to be construed as individualized legal advice and should not be relied upon without seeking specific legal advice.
If you’re like most storytellers, you probably don’t have a formal legal background to help you navigate the legalese of a music license.
There’ll even be time to enroll afterwards, if you still want to try out the Harvey Specter lifestyle.
The Golden Rule
In Part One of our “So You Want to Obtain a Music License” blog, we covered the different types of copyright involves with music and how the “Most Favored Nation” clause affects a licensing fee.
In Part Two, we’ll explore the litany of other factors that determine the overall cost. But before we descend into that rabbit hole, let’s take a moment to remember the golden rule of music licensing:
THE ARTIST RULES.
Even though the contents of this legalese rabbit hole can affect the price of a music license, a license fee is ultimately determined by the artist. These “rules” are by no means set in stone. Ultimately, the artist can determine what the price will be, and that artist may or may not decide to follow these guidelines, which makes hunting for that wascally wabbit pretty tricky.
So without further ado, let’s dive in!
Check out a playlist of some of my favorite MD artists while you read:
FIVE W’s and an H
The “Usage” answers the “What” and “Why”: What will the song be used in, and why is it being used? Is it going to be part of an audio-visual commercial? Will it be part of an independent film? How much of the song will be used? Why is it being used in the first place? All these questions should be answered in the “Usage” section of a license agreement.
Generally, the less “prominent” the use of the song, the smaller the fee.
Lower Fee Example: To use the song in the background of 15-second advertisement.
Higher Fee Example: To use the song as a feature part of the opening scene of a motion picture film.
Not to state the obvious, but the “Territory” answers the “Where”: Where in the world will the music be played?
Generally, the smaller the area, the smaller the fee.
Lower Fee Example: The state of Illinois.
Higher Fee Example: Worldwide.
Yes, I know this can get confusing, but there is a term called the “Term;” so bear with me. The “Term” answers the “When”: When and for how long will the song be used? Whether it’s for a hundred years or a hundred days, the amount of time that a song can be used must be established in the agreement.
Generally, the shorter the amount of time, the smaller the fee.
Lower Fee Example: Two weeks.
Higher Fee Example: Perpetuity (which is fancy lawyer talk for “forever”).
Lastly, the “Media” answers the “How”: How will the music be shown to the public? Media can range across many different mediums, especially given the types of new media now made available by technology: basic or on-demand broadcast, websites and social media, in-store use, film festivals, etc. The list goes on and on.
Lower Fee Example: Internal sales presentation to 10 people.
Higher Fee Example: Television broadcast on a major television network during a sports championship game (we are not allowed to mention any specific sporting events, but feel free to use your imagination on this one).
WILD CARD: Exclusivity
What’s a voyage down the rabbit hole without a few trippy surprises?
In legal circles, exclusivity means granting an entity to do a thing, such as license a song, and forbidding all others to do the same. This is part of the “How,” as it determines how a song is used outside of the license agreement. Just like a journalist reporting breaking news, some people will want a song to be completely exclusive to their production. This occurs frequently with advertisements, as a brand will want to make sure a certain song is only used for their specific brand, so that consumers will only associate with them whenever they hear it. With exclusivity deals, the brand will require that the artist does not license that specific song to any of its competitors.
Generally, any type of exclusivity will significantly increase the licensing fee.
Lower Fee Example: A brand requires that the song cannot be licensed to a specific competitor.
Higher Fee Example: A brand will require that the song can only be licensed for its own use.
There you have it, folks: the basics of music licensing … and it only took me two blog posts! Granted, there is obviously a lot more that goes into a license agreement that us lawyers are paid to worry about (representations, warranties, indemnification, confidentiality, etc.), but these are the main terms that determine the cost of a music license. I apologize for not being able to bring in any fun ‘90s punk band references into Part 2, but it would have made for a much longer read.
Punk and grunge aside, they say knowledge is power, and that knowing is half the battle. In giving you this information, I only hope that, “…if you don’t know, now you know.”
Reach out for more information on obtaining a music license at email@example.com.
By: R.J. Inawat, Corporate Counsel, Music Dealers