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The Uniquely US Challenge That Indie Artists Face When Asked To License Music To Indie Filmmakers, For Free

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Over the last few years I’ve been approached by several indie filmmaker friends seeking my help on getting music licensed for their indie film projects. While some have had budgets, most have asked for recommendations on getting music for free. Now, as an advocate for indie music creators and rights owners, I tend to disregard “no compensation” opportunities as taking advantage of artists and/or devaluing the work of music creators (although the folks behind the opportunities are wicked good people).

Several times I’ve had to respectfully tell my indie filmmaker friends that I could not share their “music placement” opportunity, but instead I could direct them to resources to license music for cheap.

I’ve since realized that what I have not done was explain why, specifically in the United States, giving filmmakers music for free is frowned upon. So, in this post I aim to do that.

But first, I will say that I understand and agree that many opportunities for music placed in film — as well as TV shows and commercials — can be a huge break for up-and-coming artists. Productions that are widely released and viewed can result in significant exposure for the music, which can translate into increased radio airplay, digital downloads, and audio and video streams, which dramatically increases the artist’s income potential and exposure. There’s a long history of songs from movie and TV soundtracks going Gold & Platinum and topping the charts.

That being said, small indie film projects are typically not the productions that create these kind of success stories. In fact, I’d argue that over 90% of independently produced projects do little by way of “exposure” for artists (if you’re an independent artist reading this who’ve had your music placed in film, please comment and share your experience).

The reality is many indie film projects do not have the distribution or exposure to generate the volume of public consumption to translate into significant benefit for the artists who contributed music to the film. This is because only a small percentage (maybe less than 1%) of the people who’ve watched the movie would actually make any effort to track down a song placed in the movie.

Now, let’s talk about how artists get paid for music licensed to films. I am focusing solely on commercially released songs being licensed to a film. I am not going into the details of original songs composed for a film, film scores, or any “commissioned” work for a film. I am strictly talking about a filmmaker asking an artist to use an already recorded and released track.

Ok, so typically, a production company should obtain what’s called a synchronization license from the artist (or label) to use the track in the film.

The term “synchronization” refers to the act of synchronizing a sound recording to a motion visual embedded in a video. A production company should pay two (2) fees for licensing music to film: master use fee and synchronization fee.

The master use fee is a fee paid to the artist (or his/her label if they are signed to a record label) for the use of the sound recording, also known as a “master.” The synchronization fee is a fee paid to the songwriter (or his/her publisher if they are signed to a publishing company) for the use of the song, also referred to as the composition.

The artist/label owns the sound recording/master. The songwriter/publisher owns the song/composition (for example the song “Diamonds” by Rihanna was actually co-written and is co-owned by Sia and her publisher; but the sound recording of “Diamonds” that you hear on the radio is owned by Rihanna’s record label. Both the writer/publisher and the artist/label must get paid for the use of “Diamonds” in a movie; those are two separate copyrights).

Alright that was a crash course on publishing.

In order for a filmmaker to license a piece of commercially released music to your film, you need a synchronization license from the independent artist (I’m going back to talking about independent artists, although I used Rihanna (a “major” artist) in my example above). An independent artist may not have a publisher nor a label, so he/she is the sole owner and should still get paid the synch fee (for the song/composition) AND the master use fee (for the sound recording/master).

Now, so far I’ve talked about what’s known as the up front fees. These are the fees you, filmmaker, would pay to an independent artist to put their music in your movie. But like I said in the beginning, many filmmakers have asked me to help them get music for free. 😦

I wouldn’t mind this too much if we weren’t talking about small projects that will be released (and generate most of its viewership) in the United States.

Why?

Outside of the United States, artists earn public performance income from the movie theaters. That’s right, movie theaters must pay public performance fees to public performance organizations for exhibiting movies. These backend royalties can add up if the movie becomes popular and has many showings across many territories.

However, in the United States movie theaters are exempt from having to pay public performance fees. This means, independent artists (specifically, singer-songwriters) do not earn income from movie theaters when they exhibit movies containing their music.

So, when you do not earn up front fees from synch and master use fees, because the filmmaker “doesn’t have a budget for music” AND you do not earn backend royalties from U.S. movie theaters, because they are exempt from paying what theaters in other countries pay, it is frowned upon to give music for free to U.S. filmmakers making low budget movies. Because these low budget projects may not have the distribution and marketing backing of it’s major and big-independent counterparts, the potential for the movie to generate “non-compensation benefits” for the artist (e.g. radio airplay, downloads, streams, awards, etc.) is significantly low.

Basically, if your indie film is being released in a few United States independent theaters and then on DVD and you want music for free, it will be a challenge. There is no substantial benefit for the artist.

All that being said, there are several examples of small budget projects generating grassroots marketing buzz and cult popularity that does impact the distribution and exposure of the movie, which in turn could generate benefits for artists who’ve given gratis (free) licenses to filmmakers. But this is not the norm. Furthermore, there are scenarios where you can license must free in the interim, but commit to payments based on hitting milestones such as getting distribution, hitting box office sales milestones, hitting DVD rental or sales goals, etc. This is a good way for a filmmaker who doesn’t have a big music budget to potentially negotiate with artists to defer compensation based on the performance of the project.

Thoughts? Questions? Stories to share? Post in the comments.

October 13, 2015

Major Labels Sue Music Tech Startup Aurous In First Week Of Launch

Here we go again. Music Business Worldwide reports that “The RIAA — on behalf of UMG, Sony Music Entertainment, Warner Bros. Records, Atlantic and Capitol Records — has today filed a lawsuit against Aurous and its founder Andrew Sampson for what it calls ‘willful and egregious copyright infringement’.”

The music app, being called the “the new Grooveshark” (Grooveshark shut down earlier this year after similar lawsuits was filed against the company), just launched in public Alpha this week.

Aurous’ founder, Andrew Sampson, maintains that the website is a search engine that enables Internet users to search BitTorrent networks to find and stream content. However, the RIAA argues that the website directly targets recorded music from overseas pirate sites, effectively enabling consumers to infringe on the copyrights of record labels.

Whether Sampson intended on his platform to illegally access and stream recorded music or if he truly believed he built a legitimate consumer app detached from piracy, like many other uninformed tech developers out there, he has been caught in what could be a very expensive and crushing legal battle informed by copyright law.

I spend a great deal of time consulting with entrepreneurs who have cool ideas to develop new music apps, services, and platforms. However, the challenge that many of them face is having a limited understanding of the music publishing and recording landscape, from the perspective of a music tech startup. With the help of a music industry professional, founders gain insight on where products and services may infringe on the intellectual property rights of others. I’ve helped numerous startup entrepreneurs create products, formulate business models, and deliver value, all while respecting and complying with the intellectual property rights of third-party rights owners.

Read more about this story at Music Business Worldwide.

March 10, 2015

Infograph: Understanding U.S. Music Royalties

The Music Business Association (Music Biz) published an infographic, “Music Royalties USA Quick Start Guide,” which gives songwriters and performing musicians a simple way to understand the complex framework they must navigate to receive proper payment for their work.

Click to enlarge and download.

The document illustrates how royalties are handled for songwriters, publishers, and performers in various media, such as Physical Products and Download Sales, Radio & TV, Satellite & Cable Radio, Non-Interactive Streaming Radio, On-Demand Streaming Music Services, and Synchronization – Movies, TV, Games, Etc. The infographic also explains some of the more misunderstood jargon related to royalties and tells songwriters, publishers, and performers exactly which entities they need to register with.
“Because the rules governing music royalties are so complex and differ so greatly from one medium to another, many artists are leaving a significant amount of money on the table without even knowing it,” said Bill Wilson, Vice President of Digital Strategy and Business Development at Music Biz. “This infographic arms songwriters, publishers, and performers with the knowledge they need to ensure they get everything they are owed, allowing them to get back to what they do best: making music. We’d also like to thank our Affiliate Partners ASCAP, BMI, The Harry Fox Agency (HFA), The Recording Academy, SESAC, and SoundExchange, who all helped review the infographic to ensure it fully captured the process.”

The “Music Royalties USA Quick Start Guide” is the latest in a series of informational infographics that affirm Music Biz’s commitment to the artist community by providing vital information needed to understand how the music industry works and tips to get the most out of the services available to them. Previous entries include the “Global Music Licensing Quick Start Guide,” “SEO for Music Websites,” the “Artist Website Toolkit,” and more.

The infographic is available for free and can be viewed as a JPG or PDF.

Source: http://musicbiz.org/press-releases/music-biz-decodes-u-s-music-royalties-new-infographic/

February 6, 2015

Music Tech Startups Must Deal With United State’s Broken Music Licensing System

On behalf of my client, I spent the week conducting conference calls and long email exchanges with ASCAP, BMI, SESAC, The Harry Fox Agency, National Music Publishers Association, Association of Independent Music Publishers, Crunch Digital, We Are The Hits, Tresona Music, and Audible Magic securing public performance licenses, obtaining synchronization licensing information, obtaining copyright identification service & royalty administration information for their UGC video hosting platform.

I Saw Great Startups @SFMusicTech, But They Have A Lot To Learn About The Music Business

What I learned (or confirmed, rather) is that there is a HUGE need to streamline and make efficient the process of securing synch licenses, a HUGE need to standardized/equalize deal structures between labels and digital service providers vs. publishers and digital service providers, and a HUGE opportunity for a collective-bargaining startup to secure pass-through licenses on behalf of many music tech startups, and we should consider making some forms of synch licensing compulsory.

Nevertheless, as long as the music industry is slow to innovate in how it deals with digital startups, there will continue to be confusion and frustration among all stakeholders and work for me to do as a consultant.

January 10, 2015

in Digital Music, Music Licensing, Music Tech, Music Videos, Networking, Speaker
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Dae Bogan To Moderate “Online Video & Music-Related Content: Promotion and Monetization Strategies” Panel At The Digital Entertainment World Conference

I am excited to announce that I will be joining the likes of Eddy Moretti (Chief Creative Officer of VICE Media Group), Steve Mosko (President of Sony Pictures Television), Ynoz Kreiz (President of Maker Studios), and Thomas Gewecke (Chief Digital Officer and Executive Vice President, Strategy and Business Development of Warner Bros. Entertainment) as the official moderator of the panel “Online Video & Music-Related Content: Promotion and Monetization Strategies” at the Digital Entertainment World conference next month.

Music Licensing: ‘Grand Theft Auto V’ Takes Music Licensing To The Next Level

It isn’t often that we get to learn about the vision behind the musical selections — including licensed music, commissioned music and collaborations — directly from the music supervisors of entertainment products; especially music supervisors of video games. So, this interview of Rockstar Games’ music supervisor Ivan Pavlovich by The Hollywood Reporter on his work for Grand Theft Auto V is a rare peak behind the curtain of creating the sonic identity of one of the top video games of all time. And boy is it insightful!

Demystifying The Music Industry: What’s The Difference Between ASCAP/BMI/SESAC and SoundExchange?

I received an email this morning from a reader who had read my piece, “Demystifying The Music Industry: What’s This About Public Performance Rights?.” He asked, “If SoundExchange was designated by the Library of Congress as the sole PRO to administer public performance licenses and also collect public performances fees for Sound Recording Company Owners, then why do artists still utilize the services provided by the other 3 US PROs (ASCAP / BMI / SESAC) – is [SoundExchange] not sufficient by itself?”

A lot of indie artists are confused about the difference between ASCAP, BMI, SESAC and SoundExchange. I’ll attempt to break down the most important differences between these groups and elaborate towards the end about other considerations and other royalty collection entities. Feel free to comment with any questions (or corrections). Read More…