Music Licensing for Indies - EMusician

Music Licensing for Indies

Promoting your music to film and television productions is only half the battle. You need to learn how to legally license your music for film and TV. You need to understand master and sync rights, performing rights organizations, cue sheets, publishing, and much more.
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In the July 2003 issue of Electronic Musician, (“Working Musician: Reel Money”), I discussed how to successfully promote your music to the right television and film professionals. Skill and determination in pitching your music are essential to your success, but pitching is only the first half of the game when it comes to licensing your music for film and television. The match is won or lost in the second half of the licensing game, the business half.

Because you are probably a music person rather than a music business person, no one will expect you to understand the ins and outs of the business in the way that a music attorney or publisher does. However, any publisher or music supervisor contacting you about your music will expect you to have a working knowledge of the licensing process, which means that you'll need to understand the language of licensing and of the agreements used.

You will also need to know who owns what as far as your songs and masters are concerned, and in the end, you'll need to understand how to set up the arcane machinery that gets you paid. To help you sort out those details, I've put together this guide to music licensing for the independent musician. With some work and study on your part, you'll be well prepared when the phone rings.

GET YOUR ACT TOGETHER

If a music supervisor or coordinator is interested in using one of your songs in a show, your first contact will be a phone call asking for permission to do so. Of course, you'll say yes, but what will you say when they start asking the hard questions such as, Who owns the sync rights? The master rights? What are the splits? Let's look at an example phone call; from it you'll discover what you need to learn.

“Hi, this is Bob Klempf, music coordinator with My Mother the Dog on ABC. We heard your song ‘Love Me Like a Horny Poodle’ and would like to license it for an upcoming episode of the show. Is that okay with you? Great! Okay, so who are the writers? Affiliations? What are the splits? Who are the publishers? Affiliations? What are those splits? Who controls the master? Who controls sync? And, by the way, we have $500 per side for this. Is that okay? Where do I send the agreements?” You may not be asked all these questions right out of the gate, but for the sake of what can be learned from this example, let's take it apart.

Who wrote and publishes the song? You should be able to name all the writers of the song; their performing-rights affiliations; their percentage of participation, or the splits, in the song; as well as their contact information and social security numbers (or tax ID numbers).

The same goes for the publishing information. If you haven't assigned your publishing to anyone else (a professional music publisher, for instance) then you are, by default and by law, the publisher. Typically, you will own the same percentage of publishing rights as your writer does. If you are the sole writer, then you are also the sole publisher. If you are 50 percent writer, then you probably own 50 percent of the publishing, and so on. Notice I said “probably”? There are always exceptions to this rule because the splits aren't always about an equal division of labor, and there are as many ways to divide the pie as there are pies.

In any case, you must know exactly who owns what percentage of the writer's share and of the publisher's share, because inquiring minds will want to know. The best tack to take is to make a written agreement with your co-writers, preferably before you write the song. But whether it happens before or after, the agreement doesn't need to be complicated; it just needs to spell out the basics of who owns what.

While you're at it, put a paragraph in the agreement that states who has the right to represent the song for film and TV licensing. Horror stories abound about licensing deals that started out fine but went south because various details weren't tended to. Establishing, in writing, what the splits are and who will represent the film and TV rights will settle these issues up front. I highly recommend hiring an attorney to help you with this. Ultimately, the cost of having a good agreement will seem low compared with the potentially high price of having either no agreement or a bad one; so get some help on this and obtain it in writing.

Who controls the master? If you are the sole writer and performer on the recording and have paid for it yourself, then you control the master. In any other scenario, the ownership and control of the master is a matter of opinion — and opinions differ. Settle it now, or it may come down to a court deciding for you. If you are part of a band, or if someone else has invested money in the recording, you should have a written agreement with those parties defining their interest and involvement in it. As with the publishing, decide who will represent the master for film and TV.

Furthermore, any additional sidemen or singers on your recording should sign a waiver releasing you from any future financial obligation to them. And don't forget your business with the recording studio, either. Pay them in full, get a receipt, and be certain about the nature of anything you sign. Once again, it is a good idea to get an attorney to help you in these matters, and don't skimp. You spent thousands on your equipment and on recording, packaging, and promotion. Spend a few more bucks on some good agreements; it will pay you back many times over. Once you have templates for your agreements, you can use them over and over again.

MORE GROUNDWORK

You need to do a few more things before your business house is completely in order. First, you should copyright your music. The copyright laws provide protection to writers, but without requiring the immediate expense of registering your songs with the U.S. Copyright Office. In fact, copyright law says that your copyright “exists from the moment the work is created.” However, an official copyright registration has many legal advantages, so I recommend getting one. To save money, you can register dozens of songs at once as a collection and then extract them individually if need be. For more information, refer to the U.S. Copyright Office link in the sidebar “Linking to Success.”

Second, if you want to get your share of performance royalties, and if you are not already a writer member of a performing-rights organization (PRO) such as ASCAP, BMI, and SESAC, you should become one. Here is how it works: television broadcasters pay fees to the PROs for the right to use music written by PRO members. Whenever a show is mixed or airs, all the music used is entered into a log called a cue sheet by the music supervisor or editor. Once the show airs, that cue sheet is sent to the PROs, and they enter all the data from it into their databases. At certain times during the year, each PRO does an accounting of all broadcast performances, and then issues performance royalty checks to its member writers and publishers of all the songs that appeared on the cue sheets. If you aren't a member of a PRO, you won't get paid; it's that simple. To see an example of a cue sheet, go to the special page on my Web site, www.globalgraffiti.com/EM.htm. (For more on performance rights organizations, see “Working Musician: Play Rights” in the April 2003 EM.)

Just as important, if you don't have an official publisher or it is your choice to publish yourself, you should form a publishing company. You don't need a corporation or a brick-and-mortar business, but you do need to have a name that is registered with your PRO, and a business bank account. The reason for this is that every song, as far as the law and the PROs are concerned, has two separate parts: the writer's half and the publisher's half. You may be registered with your PRO as the writer, but if you aren't also registered as the publisher you won't get paid for half of your royalties! Furthermore, your PRO will be writing a separate check under the name of your publishing company; so if you don't have a company bank account, you won't be able to deposit the check. Consult your bank to determine how to set up your account. As for the PRO's part, they require that you fill out some application forms and clear the name you want for your company. That process can take some time, so get on it. Contact your PRO for details on how to start the process. (For more on forming a business, see “Working Musician: Going Legit,” in the February 2002 issue.)

Once you are registered with a PRO as both a writer and a publisher, you are ready to register your songs. You can register songs on the PROs' Web sites, but paper registration is still a viable alternative. Contact your PRO for the proper forms or to sign up for its Web-based song-registration service. A complete and proper registration is essential to getting all the royalties that are coming to you. These royalties can be substantial, so don't neglect this important aspect of your business operations.

The key ingredient to getting paid is the cue sheet, as mentioned earlier. If your song is used in a network television show, chances are that the cue sheets will be sent to you automatically. In any case, you should ask for them and follow up if you don't receive them in a timely fashion. Once you get the cue sheets, check them to make sure that the information regarding you, your songs, and your publishing company is correct. If there is a discrepancy, contact the show right away and ask them to fix it. That is very important because your PRO relies on the information contained in these forms to determine who gets paid and how much. Once you've straightened out any problems, submit the cue sheets to your PRO along with your song registration. Here is a quick side note: there is some small controversy over who should submit cue sheets, but the bottom line is that anyone who has either a legal responsibility or a financial interest in having them submitted should do so. The first reason for you to take on this task is to be certain that they are submitted, which sometimes they are not. The second reason is to verify that the information on them is correct, which sometimes it is not.

Last, a new, but controversial, method of broadcast licensing, called direct licensing, is becoming increasingly popular with broadcasters. This method bypasses the PROs altogether and attempts to obtain the broadcast license directly from the rights holder (you). Essentially, the intent is to buy out your performance rights for only that use and pay you a lump sum instead of paying you through your PRO in the form of performance royalties. If that possibility is brought up in your negotiations, you should consult an attorney for advice, because the way this is handled will permanently impact your performance royalties for that use.

SYNC & MASTER-USE LICENSES

Once your song is going to be used, you'll find yourself doing business with the legal and royalty departments of the show or film. You'll receive one or more documents, all of which you must read, and some of which you must sign. They'll be about as interesting as the user agreement in a software installation, but don't blindly click the Next button — what's written on those pages could impact your rights, and your income, for a long time.

As the owner of the master and the publisher of the song, you are guaranteed a certain bundle of rights by law. Because you own all the rights, anyone who wishes to use your song must first obtain your permission. A film or TV show needs to borrow only a couple of those rights from you: the right to use the actual recording (your master), and the right to use the underlying composition that the master is based on (your song). Those are two distinct things. The permission you give them to use the master is tendered in the form of a contract called a master-use license. The permission you give them to use the song itself is tendered in the form of another contract called a synchronization license. Both these licenses can be combined into one agreement if the publisher and master owner are one in the same. That will most likely be your circumstance, so I'll confine my discussion to that scenario.

The first document you're likely to get, particularly with television, will be a faxed one-page deal memo, or confirmation letter. It describes in very broad terms the important points of the agreement, such as the fees, the rights they need, the length of the agreement, and other details you discussed in your phone conversation. TV shows use confirmation letters a lot because they don't have the time to churn through the entire licensing cycle before their air date, yet they must have something in writing that is a binding promise from you. Before you sign such a document, make sure it describes what you discussed and agreed to over the phone. If it doesn't, or if you're unsure, call the contact named on the sheet and work it out. Be friendly and plead ignorance if you must, but don't hesitate to deal with it.

Now it is time for a reality check. Just because a show has asked to use your song doesn't mean it's going to wind up on the air or on the screen. Many things can happen between that phone call and the air date to kick your song out of the mix, so relax until you're contacted again. Don't call and bug the music supervisor about what's going on with your song. He or she will contact you when it's good to go. At that point, the more formal license will begin to make its way through the labyrinth of the studio legal department, eventually finding its way to you. Once you've signed the license and returned it to them, you still need to wade through more bureaucracy before you get a check. In fact, don't be surprised if it takes three to six months for your check to arrive. That's just the way it is, and everyone goes through it.

To help you through the generalities of licensing agreements, I've posted an example of one on my Web site, along with some helpful commentary, at www.globalgraffiti.com/EM.htm. For the specifics of your agreement, you'll need to consult with an attorney. But you've already signed off on the big points of the license in the confirmation letter, so you just need to compare the two documents and make sure that their points jibe.

Don't take anything for granted until you have dealt with a number of licenses. Even though TV networks can usually be counted on for a pretty standard and customary agreement, that isn't always the case with the film and TV business as a whole. For instance, some independent and low-budget filmmakers and TV producers may know even less than you do about licensing. Therefore, you must be on your guard against nonstandard agreements that could adversely effect you, such as accidentally assigning your publishing or master rights to them!

The best approach is to continue your education and consult with a professional whenever you are unsure of what you're being asked to sign. Some great books are available, and most attorneys won't charge you an arm and a leg just to look over your license, so avail yourself of those sources. I've provided some helpful Web links and resources in the sidebar “Linking to Success” that will help you find ways to expand your knowledge of the subjects covered here.

Finally, be aware that not just any attorney will do. One who isn't experienced in this business can do you more harm than good. An entertainment lawyer doesn't necessarily know music licensing for film and TV or the norms for doing business with Hollywood film studios and network broadcasters. To delegate this work with confidence, make sure the attorney you choose has a track record in this specialized field.

IT'S A WRAP

While many independent bands and singer-songwriters are getting their songs into films and TV shows, remember that talent and persistence will take you only part of the way. Spend some time learning the business of your art, and you can proceed the rest of the way with confidence.

(Please note: Nothing I've written in this article, or by anyone I've quoted, should be interpreted as legal advice. You should always consult with a qualified attorney regarding your particular situation.)

Skip Adamsis a music publisher in Venice Beach, California, specializing in placement for film and television. He would like to thank Evan Greenspan, David Grossman, Michael Kakuk, Sindee Levin, Steve Winogradsky, and Jacqueline Woolf for their help with this article.

RANDOM WISDOM FROM THE PROS

Below are edited excerpts from interviews I conducted with some of the top music attorneys and executives in film and TV. Here is a condensed version of what advice they would give to indie musicians who want to license their music for film or TV.

Evan Greenspan (owner of one of the biggest music-clearance companies in the country, EMG Inc., and past president of the California Copyright Conference): The good news is that the media world is expanding and, along with it, so is the need for more and more music. The bad news, however, is that music budgets are simultaneously contracting. That presents an opportunity for independent musicians, if they can provide high-quality music that fits smaller budgets.

David Grossman (senior vice president of Television Music, Paramount Pictures): Don't be penny-wise and pound-foolish. Hire someone who understands the business of licensing for television, or learn for yourself, so that you don't blow a deal asking for something that is outside the industry practice. Make the process as easy for producers as possible so that they want to do more business with you in the future. Understand the terminology. Look at the long-term benefits of the relationships that you're trying to create, rather than looking at them only as a short-term win.

Sindee Levin (attorney, music publisher, president of the American Mechanical Rights Association): From start to finish, keep your correspondence and interactions simple and easy. If you're not a lawyer, don't act like one. Be organized and prepared. Have all the information that is about you, your cowriters, and the owner(s) of the master at hand. If you're the contact person, make sure that all of your partners agree that you are the one designated to make the deal. Frequently, shows are looking at several songs for a given spot, so the easier you make it for them, the better the chance is that they will go with yours. When you're a top songwriter, you're allowed to be difficult. But for now be easy to deal with.

Steve Winogradsky (top music attorney, 20-year music-licensing veteran, president of the Winogradsky Company): To get your performance royalties, you and your song have to be registered with your PRO. It's amazing how many times I'll get a call from a big artist who says, “My song was used on a TV show, but I haven't gotten any money from [my PRO].” Then I'll ask if they're a member of [a PRO], and they'll say “Well, no.” Either that, or they haven't registered the song. The PROs are not mind readers. You have to tell them who you are, what you're doing, and what you own. And if they find your song, they'll pay you for it.

More excerpts from these interviews and others can be found online at www.globalgraffiti.com/EM.htm.

GREENSPAN'S RULES FOR GETTING PAID

President and owner of EMG Inc., Evan Greenspan, is a music-clearance specialist and an industry veteran who has a client roster ranging from Garth Brooks and Robert Altman to Coca-Cola and the Academy Awards telecast.

  1. Become a member of a PROIn order to get into the royalty pipeline, you need to be a writer member of a PRO. Also, if your songs aren't handled by a publisher, form a publishing company and register it with your PRO. Every dollar that comes into a PRO is split in half: one part goes to the writer and the other goes to the publisher's share. To get 100 percent of your performance income, you must be registered as both.
  2. Register your songs with your PROYou won't get paid if your PRO doesn't know that you are the writer or the publisher of a song that was used in a show.
  3. Be “findable.”If you PRO does not know where to send your check, or if your address information is incorrect, you won't get paid. I can't tell you how many situations we have handled in which a writer fought tooth and nail for his 15 percent of a song, and yet now can't be found! So, make yourself findable to everyone who might have money for you.
  4. Make sure you get a cue sheetA cue sheet is like an invoice to the PROs. It contains the information that the PROs use to determine which songs were used, who wrote and published them, and how much to pay you.

LINKING TO SUCCESS

Performing-Rights-Organizations Links

ASCAP
www.ascap.com

BMI
www.bmi.com

SESAC
www.sesac.com

People Links

EMG Inc.
www.clearance.com
Especially useful is the Clearance FAQ.

Michael Kakuk, Esq.
www.kakuk.com
Kakuk provides great information about how to organize your business.

Sindee Levin, Esq./AMRA
www.amermechrights.com
Levin is a lawyer, a publisher, and the president of the American Mechanical Rights Association.

The Winogradsky Company
www.winogradsky.com
You'll find some very helpful information about both the TV and film side as well as the composer's side of the music-licensing game.

Reference Links

Global Graffiti
www.globalgraffiti.com/EM.htm
This is Skip Adams's Web site, which includes a special section that refers to this article. You can check out a sample license agreement, a sample cue sheet, additional interviews, and more.

U.S. Copyright Office
www.copyright.gov
Great information, downloadable forms — a gold mine.

Music Law: How to Run Your Band's Business
By Richard Stim (Nolo Press, 2003)
Advice and lots of contracts from a reliable source. This book and other legal reference books available from Nolo Press at www.nolo.com.

Kohn on Music Licensing
By Al Kohn and Bob Kohn (Aspen Law & Business, 2002)
You can order this book on www.kohnmusic.com, which also has extensive links and information on licensing.

All You Need to Know About the Music Business
By Don Passman (Simon & Schuster, 2000)
Passman's book comes highly recommended by many professionals and is available at www.donpassman.com.

Music, Money & Success
By Todd Brabec and Jeffrey Brabec (Schirmer Books, 2002)
If you really want to know the truth, read this book. Also, check out the Brabecs' site, www.musicandmoney.com.

TERMS OF THE TRADE

All-in: Industry slang that means both the sync and the master-use rights are included in the deal. “Are you saying the fee is $500 per side, or $500 all-in?”

Assignment: The transfer of rights from one party to another. That is something you might do with a publisher, but never in the context of placing your music in a show.

Control vs. ownership: As the writer of a song, you are its owner. However, control over what happens with the day-to-day business of your song may be assigned to someone else, such as a publisher or administrator. In the case of film and TV licensing, giving control to a single entity (for example, a band member or a publisher) will make it much easier for a production to do business with you. Such an arrangement should be in writing.

Cue sheet: A written log of all the music used in a film or television production. The cue sheet is the reference that your PRO will use to determine how much you're owed in performance royalties.

Direct licensing: Normally broadcasters pay the PROs a licensing fee to use their members' songs. Direct licensing bypasses the PRO and attempts to make the deal for your performance rights directly with you. The advantage is that you don't have to wait for the money. The disadvantage is that you gamble with your future performance income. Bad idea.

License (master use or sync): The agreement between you and the production that allows them to borrow your song for their show. You are called the licensor and the production is the licensee. These agreements are typically nonexclusive and time limited, and they closely define what can and can't be done with the song or master.

Master-use right: As the owner of a master recording, you have the right to decide who can use that recording and under what terms and conditions. That right is the master-use right.

PRO: Performing-Rights Organization, such as ASCAP, BMI, and SESAC. These membership-based organizations are authorized by their members to represent their interests to the broadcast industry. A PRO's primary function is to negotiate and collect licensing fees from broadcasters and then distribute what they collect to the membership.

Side: Industry slang for the rights needed to license a song. The sync right is one side, and the master-use right is the other. Getting “$500 per side” means getting $500 for the sync right and $500 for the master-use right.

Sync right: The sync right is one of the rights in the bundle of rights that is guaranteed to creators of music by the U.S. Copyright laws. If you haven't assigned your publishing to anyone else, you are the writer and the publisher. As the publisher, you have the last word as to who may synchronize your song in a timed relationship to a moving picture, and under what terms and conditions. To learn more about your bundle of rights, go to the U.S. Copyright Office link in the “Linking to Success” sidebar and click on Copyright Basics.

Split: Industry slang for percentage. If you share the ownership of a song evenly with another writer, the split would be 50/50. “What are the splits on writer and publishing?”