Tips for Clearing Music for Television and Motion
By Steve Gordon, Esq.,
Reprinted from "Entertainment Law & Finance"
licensing offers ancillary income in a music business that lately
has seen decreases in sales of recorded product. Even the Internet,
which has negatively affected record sales, offers music licensing
opportunities. In the following interview, New York entertainment
attorney Steve Gordon discusses the practical considerations involved
in the licensing of music. Next spring, Gordon will teach a course
on digital music law and business models at New York University
and present a seminar at Columbia University on the future of music
on the Internet. Gordon's contact information, information on the
course and seminar, and his previously published articles can be
found at Steve Gordon Law.
[Question] What kinds of projects do
you work on?
MusicDish Network Sponsor
Steve Gordon TV, movies, documentaries, compilation
albums, DVDs and Internet-based projects. I recently worked on several
interesting jobs in cooperation with Universal Media Inc. [a company
specializing in finding footage and music]. These projects included
a documentary on Latin jazz for the Smithsonian Institution, a companion
record album for Smithsonian Folkways Recordings, a network TV special
featuring the music of Elvis Presley, and a PBS special featuring
Frank Sinatra's duet performances from his old TV series, to be
released as a home video and on foreign TV.
Currently, I'm working on an independent movie about
a serial murderer who targets punk rock fans, containing more than
two dozen songs and masters. I also represent a publicly traded
Internet content provider that is continually securing rights in
all kinds of content, including music, videos and computer games.
[Question] What is the
process for securing copyright clearances?
Steve Gordon The process is basically the same
for any kind of project. Research the songs, strategize with the
client, negotiate the terms and review or, in certain instances,
prepare the licenses. In regard to the last item, music publishers
and labels will usually provide their own licenses. However, occasionally
a small label, publisher or unsigned artist will request that you
draft the license.
With respect to research, the kind of material to
be cleared will dictate the nature of research to be performed.
For instance, for musical compositions, the ASCAP and BMI databases
are excellent sources for identifying the writers and music publishers.
Each of these databases may have to be explored because each performing-rights
organization provides information only on the songs in its own repertory.
SESAC also administers certain songs that will not be included on
the ASCAP or BMI sites. In addition, the Harry Fox Agency provides
information concerning songs that it represents (see Songfile.com).
If your client is using musical recordings, the packaging
and liner notes can supply information such as the name of the record
company and artist, and the release date. If the client is using
excerpts of TV, movie or video footage, someone should view the
credits from the original TV program, movie or music video to determine
the TV service, studio or record label that controls the copyright
in the footage. The musical artists, actors and other persons (or
their estates) appearing in the footage may also have to be cleared
depending on various circumstances, including whether there is a
musical performance in the footage.
Once you have identified those who control rights
in the material to be used, you are almost ready to approach the
owners and negotiate terms. (See sample clause below.) But first
you must strategize with the client. This conversation should include
what rights will be required, that is, media, territory, duration,
what you think it will cost and what to propose to the licensors.
This process is the real "art" of licensing. With
knowledge of the applicable business practices and pricing, you
can advise your client on the approximate amount of money he or
she will have to pay for clearances; alert him or her to potential
problems, such as material that may be too expensive and may have
to be replaced; and develop a letter addressed to the owners accurately
reflecting the precise rights that your client needs and proposing
the lowest reasonable fee or royalty. The proposed payment, which
obviously must be approved by the client, should be as low as possible
and include a cogent explanation of the reasons that the owner should
accept such a rate. At the same time, the proposal should not be
so out of whack with standard business practices that the owner
The negotiation process involves a discussion with the copyright owner
or its representative about the project, plus continual follow-up.
Many of the projects on which I work will not make a great deal of
money for any individual copyright owner. For that reason, many of
these requests usually are low-priority items to the people from whom
I am seeking permission. To do this work, therefore, a combination
of courtesy and persistence is recommended.
Ultimately, if the licensor doesn't accept your terms,
you will have to negotiate compromises or even advise the client
to drop the desired music. For instance, trying to get a hit song
for an independent movie may not happen because the song owner may
not like your client's project, or may not wish to license it to
anyone at any price, or may propose a fee well beyond your client's
ability to pay.
Finally, the owner will send the license, and it is
my responsibility to make sure that the terms in the license exactly
match the understanding between my client and the owner.
[Question] What issues
arise specifically in the case of independent movies?
Steve Gordon From a clearance point of view,
the most important difference between an independent film and a
major studio production is that an independent producer usually
has a lot less money to spend on anything, including music. Therefore,
an independent filmmaker may have to curb his or her desire for
securing "name-brand" talent. For instance, if your client wants
to use "Satisfaction" under the opening credits, that is going to
cost big bucks indeed, unless he or she happens to be a personal
friend of Mick Jagger, and even then, don't assume a huge discount.
Even if Mick Jagger is your client's best friend,
the people who administer the Stones' copyrights may never have
heard of your client. Music publishers and labels generally will
adjust their rates downwards based on the size of a movie's budget.
But don't expect to pay a nominal fee for a hit song just because
your client's budget is modest. Independent film producers should
also understand that no matter how popular or recognizable the music
in a movie is, people don't watch movies to listen to music. A lawyer
or clearance person can work with a savvy producer to create a great
soundtrack without busting the budget.
For instance, many music publishers, labels and managers
may be eager to place new songs written by "baby bands" that will
be more reasonably priced than songs written by established acts.
Another alternative is a "stock" music house. Generally, these firms
can license both the song and the master, and therefore offer one-stop
shopping as well as low prices.
Finally, a composer or songwriter/producer can be
hired to write music for specific scenes, or a complete score. There
are many talented but hungry songwriters who would be happy to work
on a client's project for a credit and a reasonable fee.
Another way to work within a client's budget is to
set up the quote request as a series of options. Generally, a film
festival license can be secured for a small fee because music publishers
and labels recognize that festivals are not commercial enterprises.
Additional rights such as theatrical, free TV, cable and home video
can be requested as options. Each one may be exercised by paying
a specific fee. "Broad rights"-which include theatrical, TV and
home video-can be expensive. In case your client does not succeed
in securing commercial theatrical distribution, these options will
allow him or her to gain exposure for the movie (on cable TV, for
instance) for a reasonable fee without paying for unnecessary rights.
Next month, Steve Gordon will address such topics as deal points,
"most favored nations," penalties for the failure to secure copyright
clearance, and the role of a music supervisor.
[Question] Please describe
the deal points (e.g., term, territory, royalties or fees).
Steve Gordon The term will vary depending on
the nature of the project. Of course, you always would like to secure
perpetual rights for your client. But that may not always be possible.
For instance, in regard to a TV project, music publishers and labels
will customarily limit the term to three to five years. A longer
period will cost a lot more money. One way to accommodate future
uses is, again, to set up options. The original term can be three
years, with an option for another three. That way, your client doesn't
have to pay the additional fees unless he or she actually exploits
the program for a longer term.
Movie and TV producers will generally seek worldwide
to maximize the audience for, and income from, their projects. Producers
of album compilations, on the other hand, may wish to target the
U.S. and Canada market only. So the scope of the territory provision
will depend on the business interests of your client. Of course,
the most important item in virtually all clearance licenses will
be the money. Generally, flat fees will be required for TV and movies
because that is the standard business practice.
On the other hand, if you license a song or master
for an album or a home video, you can expect to pay a penny rate
per unit. How much you pay will depend primarily on the nature of
the project. In regard to a compilation album, although there are
exceptions, the owner of the track (generally a record company)
will require a per-unit penny rate against an advance. If the penny
rate is 10 cents, then an advance payment of $1,000 may be required,
with a "rollover" payment of another $1,000 for sales exceeding
10,000, and additional rollover payments after that for each block
of 10,000 units. The underlying song will be subject to a statutory
mechanical license, currently 8 cents per unit, although it may
be possible to secure reductions from such rate in certain circumstances
(if a charitable purpose is involved, for example).
Clearing music for a motion picture is a whole different
ball game because there is no compulsory license for use of musical
compositions in audiovisual works. The money demanded for even a
never-quite-famous song can easily reach six figures for a movie
to be distributed by a major studio. The owner of the master, usually
the record company, probably will want at least an equal amount
for the master recording.
[Question] What is meant
by the phrase "Most Favored Nations"?
Steve Gordon Also referred to as "MFN," this
is a business practice than can affect all the terms of a license.
It means that you cannot treat the owner or licensor of content
less well than any other owner or licensor of content used in a
similar manner. The practice is very common in regard to concert
TV programs featuring a dozen full-length musical performances.
No one who licenses any song for such a program wants to get less
money or give more rights than any other licensor. MFN also plays
a big role in audio compilation albums. It exists but is less common
in regard to clearing music for movies, because in a movie each
piece of music is often used in a different way. For instance, one
song may be used over the credits, another song may be used for
only a few moments in the background of a scene, and another song
may be heard as a theme throughout the movie.
[Question] What are some
reasons that a copyright clearance cannot be secured?
Steve Gordon Money is the most common reason.
In regard to a movie, although some baby bands, composers or songwriters
may love the exposure that your client can create, established artists
and bands may not need the exposure. They already have it. Therefore,
the price can be prohibitively high. To give a recent example from
my own practice, we could not get the price of a Bee Gees song down
for an independent movie. So we replaced it with a new song composed
by my client. Another problem is that the copyright owner, or his
or her representative, may not wish to be associated with your client's
project for whatever reason. I once had a problem with getting permission
to use "Macarena" for a Chipmunks video. Apparently, the composers
did not relish the idea of their song being performed by cartoon
[Question] What are the
possible penalties if copyright clearances are not secured?
Steve Gordon Perhaps the worst-case scenario
is an injunction, which is available as a remedy for copyright infringement.
Your client's project could be shut down completely. If it's yanked
out of distribution, not only are potential profits lost, but there
also could be serious expenses incurred in retrieving the product
from warehouses or retail outlets (as there would be if a DVD were
involved). Of course, copyright owners have other remedies available
to them, including statutory damages and attorney fees, if they
properly registered their works. Therefore, the price of using a
copyright without permission can be quite steep indeed.
[Question] What is the
role of a music supervisor?
Steve Gordon A good music supervisor can identify
music that could enhance your client's project. But due to budget
constraints, experienced music supervisors make their living working
with big studio productions. When they can be afforded, they have
knowledge and contacts that could prove valuable, especially when
it comes to finding new, cutting-edge music. The client can't depend
on lawyers or clearance people to be his or her "ears." Depending
on the budget, therefore, the client may have to be his or her own
music supervisor, although a knowledgeable lawyer with good industry
contacts can be very helpful.
[Question] What is involved
in licensing music for Internet-based projects? How is it or other
new technologies an emerging area for clearances?
Steve Gordon New technologies, including the
Internet, have created new uses for all kinds of content. New business
practices and forms of licensing have also emerged. The issues and
rules can be quite complex, depending on what you are trying to
do (e.g., webcasting, streaming or downloading) and the kind of
content you are trying to clear (interactive games, music, etc.).
Perhaps the fastest-growing areas of music licensing are interactive
webcasting and video on demand. Already, satellite systems and digital
cable modem services are offering content on demand. Concert specials
accommodate themselves beautifully to these new technologies.
Eventually, concert videos may also be available on
the Web on an on-demand basis. Therefore, in addition to clearing
a concert special for TV and home video, clearance people will find
themselves clearing for on-demand uses. This will entail educating
the licensor as to the new technologies and, in the case of webcasting,
assuring copyright owners that your client will protect the owners'
copyrights with encryption technologies to prevent piracy.
Sample Clause for Synchronization License
License # (Basic Cable Television)
Effective Date: In consideration of the terms and provisions of
this agreement as hereinbelow set forth, we hereby license to you,
nonexclusively, the right to record the musical selection set forth
in Paragraph "2," below, in synchronization or timed relationship
with the single television production known as________________________in
the territory and for the purposes hereinbelow described.
This license shall apply and be limited to the musical
composition and type and duration of usage set forth below, and
as compensation therefor you agree to pay and we agree to accept
the sums indicated:
TITLE: COMPOSER(S): TYPE OF USE: PERFORMANCE RIGHTS
SOCIETY: FEE: SHARE REPRESENTED:
(1) This license herein granted is limited superficially
to use in connection with the origination, transmission and public
exhibition of said production by means of satellite (DBS) and basic
cable television over such facilities as you may determine may be
otherwise restricted hereunder, provided, however, that production
will not be exhibited by so-called pay, subscription or commercial
television, or similar method and will not be recorded or exhibited
on audiovisual cassettes or any other sight and sound device, without
our prior written consent, it being understood that such usages
shall require licensing and payment of additional fees to be negotiated
between us. No sound recording shall be manufactured, sold, licensed
or used separate or apart from said film or videotape.
(2) Basic Cable Television shall mean exhibition throughout
the Territory of the Program performing the Compositions by means
of cable television, whether such programming is transmitted by
wires, cables, satellite or other communication channels, for which
members of the public may pay for the transmission service provided
by the cable system, but do not otherwise pay a premium for the
programming transmitted by such cable system.
(3) The license herein granted is a license to synchronize
and record only and does not authorize or permit any other use,
it being understood that performing rights licenses must be secured
from any performing rights society or other entity having the legal
right to issue such licenses as the owner of or on behalf of the
owner of such rights in any licensed territory in which the music
as recorded hereunder may be performed. All rights of every nature
and description not herein expressly licensed to you are reserved
by us for our use and benefit.
(4) You shall have the further right, but at your
sole cost and expense, to edit, arrange and rearrange the music
and lyrics for purposes of recording hereunder, provided that no
substantial music or lyric changes shall be made without our prior
written consent. This license shall not be deemed to include any
right to parody the original music and/or lyrics of the songs. Any
new arrangements hereunder shall be made only by persons acting
as "employees for hire," but at your sole cost and expense, and
all copyrights therein and all renewals, extensions and reversionary
rights interests thereof throughout the world shall be deemed assigned
to and owned by the copyright owner of the underlying composition,
subject to your use under this agreement.
(5) The license herein granted shall be for and limited
to the territory of ___________.
(6) Your rights for use covered by this license shall
commence on the effective date of first broadcast in ____ for a
period of two years.
(7) On expiration of such term, all rights licensed
hereunder shall revert to us without further notice and in their
(8) On completion of production, you shall furnish
to us two copies of the music cue sheets for said production (if
such a cue sheet has not been furnished previously with regard to
(9) No warranty or representation is made in connection
with this license except that we warrant that we have the right
to issue this license subject to the terms and conditions hereof.
In any event, our total liability under such warranty is limited
to the amount paid by you hereunder.
(10) This license shall run to you, your successors
and assigns, provided that you shall remain liable for the performance
of all the terms and conditions of this license on your part to
be performed, and provided further that any disposition of said
film or videotape of any copies thereof shall be subject to all
the terms hereof.
(11) SPECIAL PROVISIONS: License also includes Foreign
Television. Term of three years from initial airing in each country.
All television media excluding pay-per-view. World outside United
States and Canada. Fee _____.
(12) License will become null and void if payment
not received within 60 days of dated license.
(13) This is the entire agreement between the parties
with respect to the subject matter hereof. No modification, amendment,
waiver, termination or discharge of this agreement shall be binding
unless in writing and signed by the party to be charged. No waiver
of any provision shall be a continuing waiver thereafter. This agreement
shall be deemed to have been made in the state of New York and its
validity, construction, performance, breach and operation shall
be governed by the laws of the state of New York or, if applicable,
the United States copyright law.
Steve Gordon is an entertainment attorney and
consultant based in New York. Telephone: (917) 912-3400; e-mail:
He formerly served as director of business affairs for Sony Music
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It 2004 - Republished with Permission