MUSIC IN FILM AND TELEVISION – SYNCHRONIZATION LICENSES
Instructor’s Notes for Classes 7 and 8
MID-TERM EXAM DURING CLASS 7
Music In Film And Television – Synchronization Licenses
Text Reading Assignment for Seventh and Eighth classes:
MUSIC PUBLISHING- THE ROADMAP TO ROYALTIES
Chapter 7(Music in Film and Television),
PLAIN & SIMPLE GUIDE TO MUSIC PUBLISHING
Chapter 6 (Synchronizations)
Music in Film and Television
It would be hard to imagine a film without music. At one time in the distant past, before the talkies, films were silent and accompanied by a live pianist in the theater. Obviously, we have come a long way.
Synchronization Right
The right to use either a sound recording or a musical composition in a visual production is called a “synchronization right”. This refers to the right to use a piece of copyrighted music – be it master or composition – in timed relation to the visual images of the production be it a television show, feature film, cartoon, documentary, commercial, or other visual production.
There is another right which comes into play if the song is dramatized, which is called “grand” rights or dramatization rights. This right is normally implicated
The synchronization right rests with the copyright holder of the Master and Composition. There is no “compulsory right” to use either one. If the copyright holder does not want their music used in the film, that is their privilege. I
The Director’s Choices in Getting Music into their Film
The Director typically determines where music will be needed it he film (“cues”) and what type of music will be needed. The Director has the following choices in getting music for his film.
A. Original Score
B. Commercially Released Recordings (and the underlying Musical Composition
C. License a Musical Composition and Record your own sound recording of it to use in the film
D. License pre-cleared music from a Film Library
A. Original Film Score
Composers such as 5 time academy award winner John Williams, known for his “Jaws” and “Star Wars” scoring, is an example of a well known film scorer. Fees film scorers range widely based on the reputation of the scorer. First time scorers will often work for drastically reduced rates to get a scoring credit and a chance to build their reputation in the film industry.
Selecting the scorer is the responsibility of the director who is seeking the scorer who can best bring to life their vision of what the music should convey for the selected scenes and interludes. It is critical for the director and scorer to have a close working relationship and confidence that they can write and record original music that will have the desired impact. Who can forget the powerful music in jaws which signified the dreaded approach of the killer shark?
Film Scoring Agreement
Usually the producer wants the composer to compose and record the finished music and will pay a “package” price for the total minutes of music required. The movie is typically edited at this point, and the director will give the composer a list of music “cues” and a sheet showing the times that the music is to begin and end during the movie. The director will carefully go over the type of feeling that the director is trying to achieve with the music and some ideas of what he or she is looking for in terms of instrumentation etc.
Once the price is agreed upon, a deal memo will be negotiated which will contain terms such as:
- total amount of music to be delivered in running time, songs, and/or number of music cues, and basic description of instruments to be used
- total amount of money to be paid and when paid, i.e. 50% upon commencement and balance upon delivery
- kill fee if the producer decides the chemistry is not there
- delivery date with schedule for rough demos to be completed
and description of delivery items, i.e. sound recordings and completed music cue sheets
- creative control
- production period
- copyright ownership and royalties
The Producer may pay the scorer on a “Work for Hire” basis which causes the Copyright to all of the music composed, and the sound recording of the music, to be owned by the Producer who commissioned it. The Producer’s Publishing company will control and administer the publishing rights and pay the songwriter their songwriter royalties earned from the exploitation of the compositions.
If the film scorer is established, they may negotiate to keep the publishing rights and simply give the Producer the right to the sound recordings and a perpetual license to use the musical compositions in connection with the movie in all media for perpetuity.
Royalties for use of the music in the film and on soundtrack albums are often negotiated as part of the composer’s contract. The publisher will earn mechanical royalties which will be shared by the songwriter. The composer, depending on their stature, may also get recording artist royalties.
Here is an article that goes into some detail on Music Scoring Agreements:
Composer Agreement Basics
By Steven Winogradsky
In last month's column, I wrote about the basic principles of copyright law in the United States. This month, I want to present an overview on the key terms of the typical composer agreement with a motion picture or television production company. Future columns will focus on many of these points in more detail.
The agreement between the production company and composer sets out the basic relationship, duties and obligations of each party. Generally, it assigns complete ownership and control of the music created to the producer, subject to the composer sharing in the royalties earned from exploitation of the music. These royalties would come from the music used within the context of the production and by exploitation of the music by the producer licensing it to others.
The services to be provided by the composer should be spelled out completely. In some cases, the composer will only create the music for the production and leave it to others to orchestrate, conduct, produce and record the music. Usually, however, the composer will perform all of these functions, under the direction of and in consultation with the producer. Included in these services may be producing the soundtrack album from a motion picture.
As music is usually done in post production, the composer's services generally begin after the principle photography is complete unless there are scenes in the production where the music is an integral part, such as a concert or nightclub scene where singers or musicians are on camera. As such, the term can usually be clearly defined from the date of "spotting" the picture (reviewing the production with the producer and director to determine where and what kind of music will be used) until the music is dubbed in to the final edited version. In cases where music must be pre-recorded for use in the film, the term may be designated to cover both situations.
Compensation for a composer is determined by the budget of the film and the composer's stature in the industry. Fees range from zero to $750,000.00, depending on the situation. This is merely a creative fee and does not cover the costs of recording, such as studio time, engineers and mixers, rental of recording equipment and recording tape. Payments to the composer are usually staggered and triggered by certain events in the composing and recording process taking place. Payments to third party musicians, orchestrators and copyists as well as studio time and engineers are made by the producer.
Sometimes, however, a composer will deliver a "package deal", where the composer assumes all responsibility for payments to musicians, copyists, orchestrators, studio time, instrument cartage and rentals and recording tape. Any overages are their responsibility and any money not spent is their compensation.
This is more common with scores consisting primarily of synthesizers, since many composers have their own equipment and recording facilities.
If the composer is required by the producer to travel outside their local area in order to record the music, they are usually given first class air fare and a weekly per diem to cover their expenses.
Whatever the nature of compensation, the composer's fees include any payments they might receive as a result of their services being under the jurisdiction of the American Federation of Musicians (AFM). Upon completion of the composer's duties, the producer's only responsibility is to make the appropriate payments. He is under no obligation to actually utilize the music in the production. More than one music score has been dumped by the producer and a new one created instead.
Perhaps the most important part of the typical composer agreement is the section whereby the parties agree that the music created is deemed to be a "work made for hire". Section 101 of the Copyright Act of 1976 (17 U.S.C. §101) defines a "work made for hire" as:
1. a work prepared by an employee within the scope of his or her employment; or
2. a work specially ordered or commission for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work....if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.
This gives the producer complete control and ownership of the music and recordings created and all associated elements, such as musical scores, instrumental parts, outtakes, etc. This allows the producer to use the music in any way he sees fit, including exploiting the music in the production in any and all media now known or hereafter devised, including trailers, advertisements and other types of promotions. It also eliminates the reversion of any ownership rights to the composer, as might be the situation in the case of a typical songwriter agreement. In addition, the producer may employ others to change, modify or re-write the music to meet his needs in the event that the composer fails to do so. In many cases, the producer will require language allowing it to use the music in prequels, sequels, television programs based upon the film or in any other production produced by this producer at no additional fee for the composer.
The producer has all the powers of a music publisher, such as licensing of the music to third parties and collecting most types of royalties. He may also assign his rights to an actual music publishing company to administer, subject to the composer receiving their share of royalties.
There may be occasions, however, where the producer will allow the composer to keep all or part of the publishing of the music. This is usually done on a low budget project in lieu of compensation to the composer. This allows the composer to receive all or part of the publisher's share of royalties from all sources and to exploit the music in other ways. Certain restrictions may be placed on the future use of the music so as not to compete with the producer's film. Irrespective, however, the composer is entitled to collect the "composer's share" of public performance royalties from their performing rights society (ASCAP, BMI or SESAC) directly, without any interference by the producer.
If a soundtrack album from the film is released, the composer would normally be entitled to royalties for the use of their music or their services in connection with creating the music. If his underscore is included, the composer is considered the artist and record producer and would receive a royalty based upon the retail sales price of the album. If there is another artist on a track produced by the composer, only a record producer royalty would be payable.
The composer's soundtrack royalties would be subject to the same terms and deductions that the producer receives from the record company. In addition, no royalties would be payable to the composer until a negotiated portion of the recording costs and "conversion" costs are recouped. Conversion costs are those incurred in transforming the music recorded for the production into a format suitable for release on the soundtrack album. This usually involves editing, re-mixing, any studio costs for each and any additional talent payments.
The composer must warrant that the music created for the film is original and indemnify the producer against any costs incurred by the use of the music, including any claims based upon a breach by the composer of these warranties. Some agreements will contain language making the composer indemnify the production company upon "breach or alleged breach". While the composer should be responsible for any breaches of his warranties and representations, a mere claim of breach should not be sufficient for him to bear the costs of defending against the claim. More appropriate is language holding the composer liable for cost incurred for a "breach reduced to judgment by a court of competent jurisdiction or settled with Composer's consent, which shall not be unreasonably withheld".
If the composer has a "loanout company" that employs them for these types of services, the agreement is actually between the producer and the lending company. As such, it is important to have a letter of inducement directly from the composer to the producer. This letter states that the composer agrees to abide by all conditions of the composer agreement, will look solely to the lender for compensation and that if the lender should cease to exist, the composer will become personally responsible for all obligations.
The agreement also includes a provision that, in the event of a breach by the producer, the composer's remedies are limited to damages at law and not equitable relief in the form of an injunction inhibiting or preventing the exhibition or distribution of the project. This clause is crucial because it would disastrous to the producer for a composer paid $200,000.00 to be able to enjoin the release of a $50,000,000.00 movie.
The Certificate of Authorship reiterates the "work made for hire" language and also waives all moral rights, or "droit moral". It also reinforces the warranty of originality contained in the primary agreement.
Lastly, there should be a schedule of royalties to be paid to the composer in the event that the music is exploited by licensing its use to a third party. These royalty provisions are similar in nature to those between a songwriter and a music publisher and define the various types of exploitation and the composer's share of each source of income. Since the producer/publisher collects all license fees and royalties (except the composer's share of public performance royalties, which are paid directly to the composer by their performing rights society), there is also an accounting provision that states how these royalties are to be paid and an audit provision on the composer's behalf.
Composer agreements can range from 4 to 20 pages but, for the protection of both parties, all of them should contain the basic terms listed above. As these are legally binding agreements, you are encouraged to engage competent legal counsel before entering into this type of agreement.
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B. Licensing Commercially Released Recordings
In addition to a score that moves the picture along, Directors also utilize popular recordings to set the time period, or enhance a scene. Songs are identified as possible candidates and professional music supervisors are hired to oversee and assist the Director in the process of getting quotes for “synch licenses” for all the identified songs from the record labels and the publishers who own the compositions. This can be a very complicated process if a large number of songs are needed.
Typically once the music needed has been identified, the Music Supervisor will search out the Labels who own the Masters and Publishers and send out letters to them with the following information:
- Description of the film project
- Description of the scene where the music is played and how it will be played, i.e. background music, coming out of a radio, sung and played by an actor, etc.
- Amount of time needed of the Song
- Type of Rights needed i.e. Film Festival, Television, Theater, DVD, Internet or all media
- Either a request for a quote or an offer to begin negotiations.
Factors that Effect Fees for Synch Licenses
- The more popular a song has become, the higher the synch fee that will be asked for the synch license
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- Use of the music in the trailer is one of the more highly paid uses. Often music used in the trailer is not used in the film.
- Use of the song over the opening or closing credits is paid at a much higher rate
- Background use is one of the lowest paid rates
- Where the music is being performed in the movie ‘live’ by a band, the fee is much higher
Levels of Rights Clearance or “Step Deals”
When dealing with a major motion picture clearance, the rights sought will be for the “Universe” and in distribution of the picture “all media now known or hereafter devised” for perpetuity. This is the broadest license possible, and for a major picture which is going to be globally distributed, it makes sense to acquire such broad rights up front.
Here are the rights that would be included in such a grant:
Film Festival
Theatrical Distribution
DVD Distribution
Over the Air Television
Cable Television
Satellite
Internet
Pay-per-view
Of these rights, the most expensive component would be the Theatrical Distribution rights. These rights are required only if the film is distributed in motion picture theaters.
However, for independent films which do not have guaranteed, world wide, theatrical release distribution commitments, it may be unnecessary and cost-prohibitive to acquire all these rights. It may be that the only distribution the film gets is direct to DVD, in which case that is all that the producer need acquire.
The solution that publishers and producers have worked out in these situations is to agree to the terms of compensation for each level of use, with pre-agreed option prices for each level.
Typically, the Film Festival license will be secured for a fairly nominal fee, with agreed “steps” up as to the more expensive rights needed. The benefit to the parties is that if the film is picked up for distribution while making the film festival circuit, the Producer will already know exactly what total monies they have to come up with in order to clear the music for the level of distribution secured.
For example
Film Festival: $500
Theatrical Distribution $5,000
DVD Distribution $500
Over the Air Television $1000
Cable Television $500
Satellite $500
Internet $500
Pay-per-view $500
Or any of the above can be combined, i.e. All TV rights, etc
Two Synch Licenses Needed: One for the Master, One for the Composition
The owners of the composition are often separately owned companies. Major record companies tend to own vast quantities of sound recordings and publishers own the rights to the underlying compositions. To license the sound recording for a film, you also need the permission of the owner of the musical composition.
Amounts Paid to Master Owner and Composition Owner – Most Favored Nations Treatment
Typically the owners of the composition and the sound recording will each ask that they receive the same amount or “most favored nations” treatment.
This is not to be confused with “most favored nations treatment” between all songs being licensed which is rarely attempted due to the varying degrees of popularity between each song.
Once the fee and terms are agreed upon, the copyright owner or the film production company negotiates the terms of the license and when the terms are agreed, pays the fees.
It is not unusual for film companies to negotiate terms for more music than they actually intend to use. In this case, they will only pay for the music actually used in the film.
IN CONTEXT AND OUT OF CONTEXT USES OF LICENSED MUSIC
Producers will often seek the right to use music for both “in context” and “out of context” uses. “In context” means that whenever the music is used by the producer, it is always exactly as it was used in the film.
This type of use means that if a film clip is use on a tv show, the music is already part of the clip and the “in context” use is pre-approved. If the clip is shown as part of the trailer, the same thing applies.
However, “out of context’ uses are those that are DIFFERENT from the use that was originally made of the music in the film. It might mean using the music in the trailer or other advertising, in a totally different manner. Or using the music for the DVD menu or any other marketing use. These uses should not be granted as the use of music in a trailer is a highly compensated use and should be paid for separately. The amount charged for these additional uses should be at least double the use for what the publisher charged for the actual use in the movie, perhaps more.
Advantages of Independent Labels who Own Masters and Publishing Rights
It is not unusually for independent labels to also own not only the masters, but also the publishing rights to the masters in their catalogue. This makes
C. Licensing the Composition and Creating a New Sound Recording
There are times when instead of licensing a sound recording and the underlying musical composition, the director will chose to license only the musical composition and re-record their own version of it. It may be that the owner of the sound recording wants too much money and that it is not critical to the movie to have the authenticity of the original recording for the purposes of the film. In those cases, the director will simply hire a producer to record a new version of the composition which will either be a “sound alike” which comes as close to the original as possible, or a new arrangement if that is preferred. Either way, the director only has to enter into an agreement with the owner of the musical composition for the required license.
D. Licensing Music from Film Music Libraries (or Production Libraries or Stock Music Libraries)
Film Music Libraries are commercial companies which have amassed large collections of recorded music and sounds. Either they own the master and compositions themselves, or have licensing arrangement with the owners when enable them to quote fees for all rights to music in their inventory for interested filmmakers. They offer pre-recorded stock music for low budget films, television programs, commercials, corporate industrial videos, and similar uses.
The benefit of the film library approach to getting music is the advantage of ‘one stop shopping’ at a place that has a multitude of genres and musical styles all of which are legally available for film use. The rates tend to be reasonable and are quoted by the minute and breadth of rights desired. There is no haggling so the transaction costs are very low since there is no real negotiating with a multitude of rights holders and attorneys are not involved.
Even major publishers have production libraries. “Even with the full blown recession, production music is not seeing any declines in our company” says Universal Publishing Production Music worldwide president Gary Ross. “We’re probably benefitting from the recession. As production budgets get cut, we find them coming to us”.
Hip hop music is in demand from production libraries resulting in efforts to add more titles to the repertoire of mainstream production libraries. Nick Firth, Chairman of BUG Music says “There are great advantages for the music publisher. You don’t have to worry about the hit parade. There are no charts, no hits, no managers. The music publisher is in control and owns the music and the master, so it’s a lucrative deal.
With the emergence of the internet, such film production libraries have become even more convenient and accessible. Well established film libraries such as 5 Alarm Music co-exist on the internet with newcomers such as Rumblefish, Gamecues, YouLicense, Pump Audio, Beatpick, and Ricall.
Types of Deals Struck between Artist/Writers and Online Music Libraries:
Commissioned Music on a Work for Hire Basis
Artist agrees to write and record music for an upfront fee and writers’ share of the performance royalties. More experienced writers may get a 50% share of all publishing income derived from the sync licensing activity of their work. Library owns the copyright to the recording and composition
Exclusive Term License
Artist/Writer who owns their own sound recording and composition licenses their works for an agreed term for 50% of the income received by the library, plus performing rights royalties. License can be renewed at option of writer after the term, or terminated.
Some libraries will allow an Artist/Writer to place their material with more than one Library as long as they can “re-title” the work. This means changing the title of the song slightly and re-registering it with PRO’s, but listing the music library as the publisher of the different title. This allows each music library with that song to license the same music but under a different title so that any performance royalties will flow through to the music library which made the original placement even though the sound recording is identical in both cases. In a digital music world where sound “fingerprints” are being used, this can be confusing since the same “fingerprint” of the recording can result in multiple titles of the composition due to re-titling.
“Taxi” Model
Artist writer joins an organization like Taxi and pays an annual fee. Taxi supplies leads from music supervisors. Artist/writer sends in submissions to Taxi who review and forward if music has merit. Artist/writer pays a submission fee of $10-15 to have music listened to by professionals. If there is interest in the music, the Artist/writer deals directly with the interested party and negotiates the terms and keeps any license fees.
Up Front Fee + Storage Fee Model
Some websites charge artist/writers a fee for placing a certain number of songs on the site plus a monthly storage fee. If a placement occurs, the two parties deal directly with each other to conclude it and no fees are paid to the website based library.
Royalty-free CD’s
Some libraries sell their music on a CD for $50 to $300, and the purchaser can use it for as many film projects as they like with no additional fee. Some offer music that is guaranteed to not be registered with any PRO so that the music can be publicly performed without getting a license from any of the 3 societies.
E. Music Supervisors
The burden of securing, negotiating, and clearing the music for a film can be a daunting task for the inexperienced. Budgets need to be set, affordable music selected or composed for all the music cues, requests for quotes sent to record and publishing companies, substitutions made where selected music is either not licensable or unaffordable, and finally, licenses issued, executed and fees paid so that the film can be “locked” and ready for distribution. Fortunately, a skilled and experienced music supervisor can take over all of these tasks.
Once a decision has been made to engage the services of the music supervisor, the filmmaker and music supervisor decide the scope of the work. It may include everything from creative help in suggesting the music, to budgeting estimates, scheduling, composer supervision, licensing activity, and negotiation to name a few. Once the music supervisor is engaged, they coordinate with the filmmaker as the process hopefully winds its way to the successful licensing of the music needed for all the desired music cues.
Filmmakers may have unrealistic expectations of their ability to afford the songs on their “wish list”. Music supervisors can bring a dose of reality to the process. It is a rare film that is able to license all of the desired music without running into licensing obstacles requiring a substitution of some of the originally desired music. Licensing failures are due to factors that range from exorbitant quotes, to refusals due to political and personality
Motion Picture Soundtrack Recording
If a soundtrack recording using the name of the Motion Picture is to be released, a separate contract is negotiated with the owners of the Master Recordings to license them for the purpose of including them on that sound track recording. Usually an advance plus a penny rate will be paid. The sound track recording often has music which never appeared in the actual soundtrack of the film, but simply adds to the commercial appeal of the record.
For the music publishers, the Producer of the Film only needs to a mechanical license from them, and may try to get a reduced mechanical rate.
At times Record Companies are approached with the idea that all of their music will be used for the film and soundtrack album, which in turn will be the designated company to release and market the record. Some times the Record Companies will pay a fee to the Motion Picture Producer for this privilege, anticipating that the success of the picture might well drive sales of the soundtrack album which can “piggyback” on the motion picture marketing and promotion.
Here is an article by Steven Winogradsky that goes into more detail:
Soundtrack Albums
By Steven Winogradsky
A soundtrack album has become such a popular, and sometime profitable, method of promoting a film to the point that it has become something of a necessity for certain types of films. At the time of this article, 15 out of the top 100 albums listed on the Billboard charts are soundtrack albums. Being able to release a soundtrack allows for the creation of music videos utilizing music and scenes from the film that allow for "free" advertising on "MTV"-type channels. It allows a film to benefit from having music in it by a popular artist. At the same time, a film that is "hot" can attract major artists to participate, sometimes at fees that are reduced due to an additional source of revenue other than just the master license for the film.. It can also assist in financing a film, depending on the size of the advance a producer may receive. In certain cases, however, the only purpose of a soundtrack album is to appeal to the vanity of the producer, director or composer.
Soundtrack albums consist of three different types of music: (a) instrumental underscore written especially for the film; (b) songs written and/or recorded especially for the film, either using the actors from the film as the artist or a well known artist to perform; and (i) previously existing master recordings that are licensed for use in the film. Soundtrack albums may contain one or all of these three types.
The amount of each of these types of music in the soundtrack album will, in many ways, determine the royalty the record company releasing the soundtrack will pay the film company and other parts of the negotiation. In rare cases, there may be two separate soundtrack albums; one consisting of the underscore and the other of songs written or licensed for the film. The film "Batman" was such a case, with one album featuring songs by Prince and one that included the underscore by Danny Elfman.
Who Releases the Soundtrack Album?
If a soundtrack album is contemplated by the film company, negotiations will commence with record companies for the release of the album. With multi-faceted companies like Warner Bros. or MCA/Universal, many of the soundtrack albums from their films are released on their sister company record label. While not implying that the film company will not be dealt with at arms length, the parameters of the deal have been previously fought over, with each company knowing what terms the other will agree to and which they will have to negotiate. In some ways, this makes the negotiation easier since the two companies have dealt with each other on numerous occasions and have worked out the basic structure of an agreement. The cross promotional aspects in this case work to the advantage of both companies.
Other times, if there is no affiliated record company, the film producer has the freedom to shop the album to whomever he pleases. Certain labels may be better than others for a particular album, depending not on the negotiation but also on their marketing strengths and weaknesses. A soundtrack album featuring rap and dance music would probably not be best served by a label specializing in country music. Like every other aspect of a film, the soundtrack album is something of a collaborative effort by the record company and the film company.
Freedom of choice, however may not always be available. There may be times when only a particular record company will release the album. There are, for example, labels that specialize in soundtrack consisting solely of underscore. As these types of albums tend not to be huge sellers, a label used to dealing with this market may offer the best chance of maximizing the potential income from the album rather than a "pop" label. In other cases, the label of a major artist may insist, as part of the agreement to allow that artist's song in the film, that they release the soundtrack album. Having more than one major artist only complicates this type of situation. In such cases, it is not uncommon for one label to release the soundtrack album while another releases a single from that album so that both companies may exploit and profit from the music in the film.
Licensing Music for the Soundtrack Album
As mentioned previously, the music on a soundtrack album may come from various sources. For underscore, the composer agreement covers the rights necessary for the music to be included on the soundtrack album, giving the film company, as copyright owner, the right to license the music created. The same generally applies to songs written specifically for the film. For recordings of existing compositions that are created for the film that are recorded by a featured artist already under contract to a record company or for previously existing compositions and recordings being licensed for the film, a separate negotiation must take place in addition to the sync and master licensing discussed above. For existing compositions, mechanical licenses must be negotiated with the music publishers. This allow the record company to manufacture "phonorecords", i.e. audio-only devices such as vinyl records, audio cassettes and compact discs.
There is a statutory rate proscribed by The Copyright Act (as of this writing, the rate is 9.1 cents per copy for uses up to 5 minutes in length, subject to periodic review), but a lower rate may be negotiated. It is the responsibility of the film company to negotiate these rates, but the record company must pay the necessary royalties. Often, the record company will impose a ceiling of 10 times the statutory rate on the total amount of mechanical royalties that they will pay on the album. A similar restriction will be imposed on singles, EP's, etc. Sometimes, however, the record company will impose a ceiling of 10 times 75% of the statutory rate.
For music written for the film, the film company, as publisher, has the ability to license the mechanical rights at any rate they deem appropriate. Since third party publishers of existing compositions have no vested interest to reduce their mechanical royalty, the film company may be put in a position of licensing its mechanical rights for less than the full statutory rate. In fact, many soundtrack agreements have a provision requiring the film company to license any so-called "controlled compositions" at 75% of the statutory rate. "Controlled compositions" are those written by owned or controlled, directly or indirectly, by the film company. Where the record company imposes a ceiling of 10 times 75% of the statutory rate, the film company (as publisher) may actually receive less than 75% in order to come under the ceiling.
For new songs recorded by an featured artist, the artist's record company (if they are not releasing the soundtrack) will want to be compensated for the use of their exclusive artist on another label. This will take the form of an "override" royalty, that is, a royalty paid to the record company over and above that paid to the artist themselves.
For previously existing master recordings, the record company/copyright owner of the master will generally require a royalty based upon the manufacture's retail sale price ("MRSP"), pro rata to the number of tracks on the soundtrack album. This royalty will generally include the rights to the artist's performance, name, likeness and biography in connection with the soundtrack as well as the royalty for the producer of the master being licensed. There will be certain artists, however, that will require separate permission and payment for the use of their recordings. There may also be restrictions in the ways that the soundtrack record company can utilize these existing recordings, such as not being able to re-mix them for use on the soundtrack or not being able to release a particular master as a single. Conversely, as part of the negotiation, the soundtrack label may impose certain restrictions on the licensing record company, such as not releasing it as a single or withholding it from an artist's "greatest hits" album for a certain period of time so as not to compete with the soundtrack album.
The royalties paid to the original record company, since they are based upon MRSP, will be subject to a series of deductions for foreign sales, club, premium and mail order sales, mid-priced and budget sales, on the same percentage as the royalty paid from the soundtrack label to the film company.
Royalties and Advances
The record company releasing the soundtrack album will pay the film company a royalty on every unit sold based upon MRSP and subject to deductions for packaging, foreign sales and category variations, as outlined in the sample agreement. As listed, there are different rates for albums vs. singles, domestic vs. foreign sales, full retail vs. discounted sales, etc. The packaging deductions also vary by type of configuration of the software. Most of these types deductions are fairly standard in the recording industry, whether for soundtrack albums or those by a recording artist but there is some room for negotiation as to the percentage of the deduction. Standard accounting provision will be included as well as language allowing for the keeping and distribution of reserves against returns, promotional copies and "free goods" that are contained in every record deal.
The film company will them be required to pay royalties to the artists whose works are contained on the album. Sometimes, the record company will agree to make the artist royalty payments directly and deduct them from the film company royalty.
It is possible for the film company to receive an advance against future royalties that can assist in financing the film or, at the very least, go to assist the music budget for the film, allowing the producer to attract higher quality talent. The size of this advance will depend greatly on the stature of the artists on the soundtrack, the nature of the music (i.e., underscore, songs, etc.), the overall budget of the film and many other intangibles having to do with the perceived value to the record company.
Miscellaneous Provisions
The soundtrack agreement will contain reciprocal assurances having to do with the release dates of the film and release dates of the soundtrack album. Generally, the film company will require that the album (or at least a single from the album) be released approximately 30-45 days prior to the release of the film in each territory so as to promote and generate interest in the film. To do so, the record company will require that fully edited masters be delivered approximately 90 days prior to the release of the film so as to allow for manufacturing and distribution of product. Included in this requirement will be the necessary artwork, photographs, logos and all consents. Also reciprocal will be provisions for record company credit in the closing credits of the film and in certain types of paid advertising as well as film company credits and logo on the soundtrack album packaging.
The agreement will typically also have a clause providing for the creation of a music video using footage from the film. Generally, the film company and record company split equally the costs of the music video, with the film company usually having creative control. Since the video promotes both the film and the album, the costs to the record company are usually not recoupable against royalties.
While it may seem that every film released has a soundtrack, because of the difficulty in negotiation the rights described above, it's probably not as many soundtracks released as film producers would like to have released.
MUSIC CUE SHEETS
When to Submit a Cue Sheet:
Here is a list of the types of productions that should have their music use reported on a cue sheet. Without the music cue sheet, which is turned into the Performing Rights Organization, it will not be possible to pay the writers and publishers for their performances earned by the airing of the film over television, cable, and the internet.
- Film use
- Theatrical use
- Broadcast & Cable Television use, such as:
- Feature performances
- Background performances
- Theme performances
- Logo performances
- Infomercial performances
- Promotional announcements and commercial jingle performances
- Syndicated and locally originating programs
- Local Television per program licenses, such as:
- Films and video productions
- Syndicated programming
- Locally originating program broadcasts
- Incidental and ambient uses of music that have been broadcast
Example of a Music Cue Sheet Form for a Film Production: (to be provided in class)
CLASS EIGHT
MUSIC IN FILM AND TELEVISION CONTINUED
