10 things marketers need to know about music rights

Music Rights Webinar 29th November 2011

Music Rights For Marketing & Procurement Executives

10 things you need to know

Presented by Richard Kirstein Founding Partner, Resilient Music LLP

.… a bit about me

The Company She Keeps

Miro Soul To Squeeze

Quick Poll #1

What’s your role?

1. Brand Client Marketing Team

2. Brand Client Procurement Team

3. Brand Client Finance Team

4. Marketing Procurement Consultant

5. WFA Team Member

6. Other

Why know more about music rights?

• Information is power

• Knowledge empowers Advertisers to challenge established practices

• Greater understanding improves cost & risk management

• Procurement can help Marketing if engaged sufficiently early

10 things you need to know

• Songs vs. Recordings

• Types of licence & who to talk to

• Approval times

• Re-records

• Cost-drivers

• Out-of-copyright

• Risk avoidance

• Competitive Tendering

• Procurement Responsibility

• Benchmarking

1. Songs vs. Recordings

COLDPLAY

Songs vs. Recordings


COLDPLAY

Songwriters Recording Artist

COLDPLAY


Songs / Compositions “Master” Sound Recordings


COLDPLAY



Music Publisher Record Label


COLDPLAY




“Publishing” right “Master” right


“The Scientist” – Original Artist Recording

Martin / Champion / Berryman / Buckland Coldplay

Song “Master” Sound Recording



http://www.youtube.com/watch?v=EqWLpTKBFcU&ob=av2e

“The Scientist” – Cover Version

Martin / Champion / Berryman / Buckland Natasha Bedingfield




http://www.youtube.com/watch?v=kEuVb1TIqCg

Key Rights Owners

Songs vs. Recordings – Now

Major Music Publishers Major Record Labels

Key Rights Owners

Songs vs. Recordings – Future

Major Music Publishers Major Record Labels

Subject to regulatory approval

Key Rights Owners


Independent Music Publishers Independent Record Labels

IMAGEM

BMG RIGHTS

MUSIC SALES

KOBALT

BUCKS

CARLIN

BLUE MOUNTAIN

NOTTING HILL

MUTESONG

GLOBAL TALENT

BEGGARS GROUP

DOMINO

PIAS

MUTE

MINISTRY OF SOUND

WARP

PALM PICTURES

NINJA TUNE

COOKING VINYL

NETTWERK

NOTE: Some companies are Europe-based only, others also cover North America & Far East

TOP TIPS #1

• Be clear which title you wish to use • Be clear if it’s an original artist recording or cover version

• Establish which rights owners have an interest in song & recording

2. Types of Licence

Types of Licence

Why do you need a licence?

• Songs and recordings are someone else’s intellectual property

• To use them, you need a licence

• Usage without a licence is an infringement of copyright

• GET A LICENCE (before usage starts)

Types of Licence Who do you talk to?


Mechanical Right Digital Downloads

Synchronisation Use of song in TVC / Video

Music

Publisher

Music

Publisher

Types of Licence


Experiential Performing at a live event

Performing Right #2 On-line & mobile

“transmission” of song



Music

Publisher

Music

Publisher

Performing Right #1 Broadcast & in-store


OR

Who do you talk to?

PRS (UK-based) used as an example collection society

Types of Licence


Synchronisation Use of recording in TVC / Video


“transmission” of recording

Reproduction Right Digital Downloads

Record

Label

Record

Label

Record

Label

Who do you talk to?

Types of Licence



Endorsement Brand Ambassador Role





Record

Label

Record

Label

Record

Label

Artist

Manager

Artist

Manager

Who do you talk to?

Types of Licence








Record

Label

Record

Label

Record

Label

Artist

Manager

Artist

Manager


“transmission” of a recording

Who do you talk to?

PPL (UK-based) used as an example collection society

Types of Licence







Music

Publisher

Music

Publisher







Record

Label

Record

Label

Record

Label

Artist

Manager

Artist

Manager


“transmission” of a recording



OR

Who do you talk to?

Licence Exclusivity

• Relevant to all licence types EXCEPT performing right

• Limited by Term & Territory

• Can be limited by product category or across all brands

• Always attracts a premium fee

TOP TIPS #2

• Be clear which rights you need (determined by proposed usage) • Be clear who controls those rights

• Bring all parties to the table from the outset

• Don’t approach artist management for synch rights for signed writers / artists

3. Approval Times

3. Approval Times Why does it take so long?

Licence Request

UK Publisher

UK Record Label

US Publisher

US Record Label

Manager

Manager

Songwriter

Artist

US controlled repertoire

From 1-2 days to 1-2 weeks

Brand (or agency)

3. Approval Times Why does it take so long?

Licence Request

UK Publisher

UK Record Label

US Publisher

US Record Label

Manager

Manager

Songwriter

Artist

Granting Approval (or Denial!)


UK Publisher

UK Record Label

US Publisher

US Record Label

Manager

Manager

Songwriter

Artist


From 1-2 days to 1-2 weeks

From 3-5 days to 2-3 months

Brand (or agency)

Brand (or agency)

TOP TIPS #3

• Start as early as possible • Always have back-up tracks

• “No” (usually) does mean “No” – Be prepare for denial of licence

• Accept that not everyone loves your brand as much as you do

Quick Poll #2

How many music rights negotiations have you previously been involved in?

1. None

2. 1 - 5

3. 6 - 10

4. Over 10

4. Re-records

4. Re-records

Martin / Champion / Berryman / Buckland Arranger / Producer

Song : “The Scientist”

Re-recording Music Publisher

Assigned or Licensed “Publishing” right

Brand (or Agency)

Engaged Services

Re-records : The Facts

Re-record

Publishing

Master

Taking an existing published song

and re-recording it specifically for

the campaign

The publishing rights (in the song)

DO have to be cleared with the

appropriate publisher(s)

The master rights (in the original

sound recording) DO NOT have to

be cleared with the record label

“Passing Off” Directly copying the original

recording may risk a “Passing Off”

claim from the artist or their label

Risk Reduction Change singer gender, key,

instrumentation for a noticeable

difference

Parody Changing the LYRICS always

requires more complex approval &

usually a higher fee

TOP TIPS #4

5. Cost-drivers

5. Cost-drivers

Channel vs. Context

Usage

Stature

Rights Owner

Timings

Competitive Environment

Extending Licence Terms

B2C vs. B2B

Term, Territory, Media

Song vs. Artist

Major vs. Independent

Urgent vs. Not Urgent

Single choice vs. options

Options included or not

Channel vs. Context

Branding

High

Overt

Lice

nce

Fee

s

Subtle

Low

Usage

Usage

High

High

Lice

nce

Fee

s

Low

Low

Term

1 Yr

UK

World

Broadcast / ATL

On-line

Experiential

Internal

In-store

2 Yrs

Fame

High

High

Lice

nce

Fee

s

Low

Low

Stature

Fame

High

High

Lice

nce

Fee

s

Low

Low

Rights Owners

Urgency

High

High

Lice

nce

Fee

s

Low

Low

Timings

No. of track options on the table

High

High

Lice

nce

Fee

s

Low

Low


Inclusion of Pre-negotiated Options

High

Lice

nce

Fee

s

Low

Fees to extend licence terms

Included in Original Licence

NOT Included in

Original Licence

TOP TIPS #5

• Only buy the “must-have” usage you need now • Include options for all “nice-to-have” usage within the licence

• Include options to extend the term into a 2nd & 3rd period (usually @ 10%)

• Always have back-up tracks

• Be very aware of balance of power between licensee & licensor

6. Out-of-Copyright

How long does copyright last?

Songs Recordings

Publishing Rights – EU Law

Copyright in the song / composition

Remains “in copyright” for 70 years

from the death of (youngest)

composer / songwriter

Master Rights – EU Law

Copyright in the sound recording

Remains “in copyright” for 70 years

from date of first commercial

release

Outside Europe, laws vary, notably USA.

“The Scientist” – Original Artist Recording

Martin / Champion / Berryman / Buckland Coldplay


First released 2005

Copyright expires end 2075

First registered 2002

Assume last writer dies aged 85 (in 2063)

Copyright expires end 2133

http://www.youtube.com/watch?v=EqWLpTKBFcU&ob=av2e

So, what is out-of-copyright (in the EU)?

Songs Recordings

Any song or composition whose last surviving writer/author died in 1940 or earlier.

Any sound recording commercially released in 1940 or earlier.

Includes : Original 78rpm discs Excludes : remastered CDs

Elgar d. 1934 Wagner d. 1883

Beethoven d. 1827 J.S.Bach d. 1750

Benny Goodman Septet “Ad Lib Blues”

Recorded: NYC October 28, 1940

http://www.youtube.com/watch?v=sUgoBb8m1eE

http://www.youtube.com/watch?v=_4IRMYuE1hI

http://www.youtube.com/watch?v=CTVraVgzC9U



http://www.youtube.com/watch?v=QmC8iUKt938



TOP TIPS #6

• If it’s in Copyright – you need a licence • Copyright Term varies between songs and recordings

• Copyright Term varies between territories

• For internet usage, you must abide by US law

• Don’t make assumptions without proper due diligence

7. Risk Avoidance

TOP TIPS #7

• No sound-a-likes • No intent to infringe • No minor changes (6 note myth)

• Identify all interested parties • Myth re attempted search • Escrow accounts

8. Competitive Tendering

No. of track options on the table

High

High

Lice

nce

Fee

s

Low

Low


Business Requirement

Budget & Usage

Commercial Terms Brief

STAGE #1 : SOURCING TRACKS

Music Sourcing Tender

Music Rights Owners

Track Shortlist Hero Tracks & Back-ups

Track Submissions

Creative Requirement

Emotional Objective

Music Brief

STAGE #2 : PURCHASING TRACKS

Simultaneous Shortlist Research

Negotiate from Position of Strength

Secure Multiple Approvals

Final Choice

Optimal Outcome

TOP TIPS #8

•Start early

•Collate all usage data up-front

•Clarify optional usage

•Clarify deadlines

•Don’t move the goalposts!

•Have back-up tracks

•Start late

•Have incomplete usage data

•Have no option data

•Have fluid deadlines

•Have fluid parameters

•Track is a must-have

9. Procurement Responsibility

Who handles music procurement for your agency?

In-house TV Producer

“Sister” company supplier

Independent supplier

• How are they charged? • Hour/Day rate or flat fee?

• Truly independent or preferred supplier? • Sourced by competitive tendering? • Remunerated by flat fee of commission?

• Is this the default agency choice? • Are they proven as “best in class”? • Remunerated by flat fee or commission?

Who handles music procurement for your agency?

TOP TIPS #9

• Challenge agency on default supplier choice

• Insist on competitive tendering to source supplier

• Avoid remuneration by commission (conflict)

• Incentivise supplier to broker the best deal

10. Benchmarking

Are you benchmarking your music procurement?

• Post-project auditing

• Assessment of fees paid to rights owners

• Matching invoices to POs

• Assessment of fully executed contracts

• Visibility by client-side Legal prior to signature

TOP TIPS #10

• Challenge agency on full accountability

• Insist on proper due diligence

• Spot-check contracts for full execution

• Spot-check invoice & PO matching

• Insist on removal of agency mark-up on any costs

• Share anonymous data with peers

RECAP: 10 things you need to know

• Songs vs. Recordings

• Types of licence & who to talk to

• Approval times

• Re-records

• Cost-drivers

• Out-of-copyright

• Risk avoidance

• Competitive Tendering

• Procurement Responsibility

• Benchmarking

Thank You

[email protected]

+44 (0)7976 2022705

richardkirstein

www.resilientmusic.com

@resilientmusic

www.linkedin.com/in/richardkirstein

+44 (0)20 3137 0324

mailto:[email protected]

http://www.resilientmusic.com/

http://twitter.com/

http://twitter.com/

http://www.linkedin.com/in/richardkirstein

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