INTRODUCTION TO MUSIC CLEARANCESSTEVEGORDONLAW.COM

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BASIC CONCEPTS AND DEFINITIONS

“MUSIC CLEARANCES”

MUSIC CLEARANCES

• MUSIC CLEARANCES = SECURING LICENSES TO USE PRE-EXISTING SONGS AND MUSIC RECORDINGS FOR VARIOUS PROJECTS

• MUSIC CLEARANCES DOES NOT PERTAIN TO CREATING NEW MUSIC (e.g., HIRING A MUSICIAN OR A COMPOSER TO CREATE ORIGINAL MUSIC)

EXAMPLES OF MUSIC CLEARANCE PROJECTS• “ELVIS BY THE PRESLEYS” -- DOC AIRED ON NETWORK TV. SECURED LICENSES TO USE DOZENS OF SONGS

RECORDED BY ELVIS.

• “FENDER DIGITAL LEARNING” -- CLEARED HUNDREDS OF SONGS FOR STAND-ALONE INTERNET VOD SERVICE

• “THE GLORIOUS WORKS OF G.F. ZWAEN” -- CLEARED SONGS AND MASTERS FOR THIS INDIE FEATURE

• “MERCY STREET” TELEVISION SERIES -- CLEARED SHERYL CROW SONG FOR PROMO

• “FRONT AND CENTER” -- TV CONCERT SERIES ON PBS FEATURING VARIOUS BLUES ARTISTS. SECURED LICENSES TO USE THE SONGS THAT THE ARTISTS PERFORMED IN THE SHOW (e.g., BUDDY GUY PLAYED SONGS BY HENDRIX, DYLAN AND OTHERS)

• NATIONAL MUSEUM OF AFRICAN AMERICAN HISTORY AND CULTURE -- CLEARED OVER 150 SONGS AND MASTERS FOR MORE THAN 130 SHORT FILMS TO BE PLAYED AT THIS NEW MUSEUM

• SOUNDTOYS -- CLEARED SONGS FOR TOY ANIMAL COLLECTION

• ROCK THE PERFORMANCE – CLEARED HUNDREDS OF SONGS FOR DIGITAL SHEET MUSIC SALES

“MUSIC CLEARANCES” VS “MUSIC LICENSING”

•“MUSIC LICENSING” IS SOMETIMES USED TO REFER TO MUSIC CLEARANCES, BUT IS ALSO USED TO REFER TO THE “SYNC BUSINESS”

MUSIC LICENSING IS ALSO USED TO REFER TO PITCHING PRE-RECORDED MUSIC TO PRODUCERS AND MUSIC SUPERVISORS FOR PLACEMENTS

The Basics

MUSICAL COMPOSITIONS (“SONGS”)

vs.

MUSIC RECORDINGS (“MASTERS”)

vs.

FOOTAGE CONTAINING MUSIC (“FOOTAGE”)

SONGS vs. MASTERS

SONGS (aka “Musical Compositions”

SPANISH HARLEMBMI Work #1393049

The writers of this song, Leiber and Phil Spector, are represented by two different publishers. Consent to use this song for any project is required from the publishers, although they may have gain approval from the writers -- as a matter of contract or courtesy.

Songwriter/Composer Current Affiliation CAE/IPI #

LEIBER, JERRY BMI 17713791

SPECTOR, PHILIP BMI 63684950

Publishers Current Affiliation CAE/IPI #

ABKCO MUSIC, INC. BMI 56388746

SONY/ATV SONGS, LLC BMI 187062752

MASTER (aka “Sound Recording”)

SONY MUSIC OWNS COPYRIGHT IN THE MASTER

FOOTAGETHE BEATLES ON THE ED SULLIVAN SHOW

SOFA Entertainment, owners of the Ed Sullivan Show, controls exclusive rights in the footage including the recordings contained in each episode.

PUBLIC DOMAIN: SONGSWorks Registered or First Published in the U.S.

Date of Publication Conditions Copyright Term

Before 1923 None None. In the public domain due to copyright expiration

Producers can use public domain songs without permission

PUBLIC DOMAIN: MASTERSDate of Fixation/Publication Duration of Copyright

Fixed prior to 15 Feb. 1972 Subject to state statutory and/or common law protection. Fully enters the public domain on 15 Feb. 2067

15 Feb. 1972 to 1978 95 years from publication. 2068 at the earliest

1978 to 1 March 1989 70 years after death of author, or if work of corporate authorship, the shorter of 95 years from publication, or 120 years from creation. 2049 at the earliest

After 1 March 1989 70 years after death of author, or if work of corporate authorship, the shorter of 95 years from publication, or 120 years from creation. 2049 at the earliestSound Recording Act of 1972 extended the term of copyright for sound

recordings for a very long time.

MFNMost Favored Nations: In the event Licensee grants more favorable terms including, without limitation, additional consideration in any form, to the co-publisher(s) of the Composition or the party granting rights to use the master recording thereof (if applicable) in the Motion Picture, Licensee shall notify Licensor thereof, and this Agreement shall be deemed amended to incorporate same as of the date when such higher fee is paid or such more favorable terms are granted to such third party, and to continue for the duration of the period which such more favorable terms are granted.

Special Rules for Public Broadcast Stations are Favorable for ProducersSONGS

Section 118 provides for a compulsory license subject to rates negotiated by PBS and publishers.

PBS pays that rate on behalf of producers of programs airing on public broadcasting stations.

But this only applies to transmission by PBS stations, and not any other media such as home video.

MASTERS

Section 114(b) exempts sound recordings for PBS stations:

“The exclusive rights of the owner of copyright in a sound recording . . . do not apply to sound recordings included in educational television and radio programs . . . distributed or transmitted by or through public broadcasting entities . . . Provided that copies or phonorecords of said programs are not commercially distributed by or through public broadcasting entities to the general public.”

Permission and payment is required for other media.

STANDARD TERMS AND FEES• Documentaries

• Feature Movies

• TV Shows

• Musical Theatre

• Ad Campaigns

• Stand Alone Digital Projects

•

DOCUMENTARY Standard Terms

OPTION 1: Basic Cable or Pay Television

TERRITORY: United States & Canada

Term: 3 Years

FEE: $1,000.00 per song

OPTION 2: Foreign Television

TERRITORY: World excluding United States & Canada

Term: 3 Years

FEE: $1,000.00 per song

OPTION 3: Internet Streaming Services (eg. Hulu, Netflix)

TERRITORY: World

TERM: 3 Years

FEE: $1,000.00 per song

OPTION 4: Airplane and Closed Circuit

TERRITORY: World

Term: 3 Years

FEE: $500.00 per song

(Offer same terms for concert programs)

Home Video

Royalty: 12 cents per song and master for DVD and permanent downloads.

Advance: 2,500 units ($300) with rollovers every 2,500 units thereafter

Territory: U.S.

Term: 7 Years

FEATURE MOVIES (INDIE MOVIE)

RIGHTS:Film Festival/One (1) year/ World $500OPTION:All Media Broad Rights Step Deal:Media: All media now known or hereafter devisedInitial Fee: $_____With Steps of $____ at $3M, $5M, $8M, $10M, $12M and $15M worldwide gross receipts based in ALL forms of exploitation (including but not limited to theatrical, all videograms/DVD, all TV media, and Internet streaming and downloading). (Principle factors determining price: Identity of song or master; use, e.g., foreground/background or over credits; production budget)

TVProducers will seek buy-outs of all rights in perpetuity

•Example: $12,000 for excerpts of 2 songs in HBO docudrama

Spectrum of fees:

•MTV generally offers $0 for songs by new bands to be used in any of their programs; artist only receive PRO royalties, if any

•Cable shows will offer a few thousand to a few more thousand for emerging acts

•For stars such as Bruno Mars, fee may be $25,000 and up

“TOMORROW NEVER KNOWS” IN MAD MEN

In 2012 Lionsgate, the studio that produces “Mad Men” for AMC paid about $250,000 for the recording and publishing rights for the Beatles’ “Tomorrow Never Knows.” "Tomorrow Never Knows" was used at the end of an episode in Season 5 of Mad Men.

MUSICAL THEATRE

•No advances

•4-5% of Gross Box Office

•Pro-rated by the number of songs

• Denials depending on identity of writer

ADVERTISINGPrice:

• $0 for current hit song in a promo for homeless dog

• $5,000 for Billy Ocean hit from 80’s for ten days in five small markets for commercial for car show

• $375,000 for song and $375,000 for master for national TV commercial for life insurance

• Other terms: Duration – usually no longer than a year; Media – on-line in addition to TV may cost extra; Identity of song – obscure songs may be cheap

• Save 50% by re-recording

STAND-ALONE DIGITAL PROJECTS

EXAMPLES:

•VOD services: Flat fee for term of years

•Kickstarter and other crowd sourcing sites: $500

•Digital sheet music: Royalty and advance

•Music Apps: Huge advance for major label music

•Video Games: Flat Fee buy out

MUSIC BASED APP

BLANKET LICENSES FROM MAJORS:

Major Label 1:

•Advance: $50,000 advance

•Minimum guarantee: $250,000 for one year.

•Royalty: 70% of gross revenues deriving from that label's masters.

•Territory: U.S. only

Major Label 2:

•Advance $350,000 advance payable upon execution

•Additional $20,000 "content prep fee" also payable upon execution.

•After the first year $30,000 would be due at the beginning of each month.

•Royalty: 50% of revenues from that label's masters.

•Territory US Only

•Publishing included

ALTERNATIVE TO LICENSING FROM MUSIC PUBLISHERS and LABELS

• Indie Music

• Music libraries (“stock music”)

• Commission/Work for hire

OTHER STAND-ALONE DIGITAL PROJECTS•Simulcasting (PRO licenses)

•Webisodes and web series (Similar to TV)

•Lyric sites (LyricFind)

•Artists Websites (avoid covers)

•Music Webzines and Blogs (Pitchfork - avoid covers)

•Ringtones and Ringbacks (26 cents)

National Museum of African American History and Culture

Cleared over 150 songs and masters for more than 130 short movies