How Much Do Music Rights Cost

Screen Shot 2014-05-21 at 5.05.33 PM (Graphic by Leah Garaas/MPR.) 

 

Do you want to get music rights for your corporate video, TV commercial, Pandora or Spotify radio ad, or perhaps its music for a Reality TV series or new show?

So many people ask us: how much does it cost to purchase music rights?

That is like asking how much a home or car costs. Meaning, it depends. There are mansions like Led Zeppelin , Pharrell, Kanye and then there are new,  up and coming artists, too numerous to mention, that are producing fantastic songs telling very compelling stories. There are “hits” and there are underground “cool” songs from emerging artists or undiscovered artists and of course, many times, more than one version of a particular song exists.

Lets assume you know exactly what song or songs you require. In this post, I’ll break down the major cost drivers for getting music rights and hopefully this will inform you; knowledge sharing and make you and your organizations; advertising agencies, brands, marketing exec’s, non-profit business managers, tv producers, entrepreneurial start-ups, everyone; smarter as to how to think about your needs and how they impact the cost of getting music rights.

The final costs for music rights are determined by a number of important factors. Here is a good sequence of questions to answer.

1. What is the territory your product or service is sold in? That might be a state, region of a country, entire country, continents; for example: Europe, North America, Asia etc or, yes, the entire world. Territory matters and its good to only ask for what you need.

2. The use cases for the music. Is it for your website? a corporate video, in a game, mobile (is it a ringtone?) a commercial for your brand or service that will run on TV and or online, or in the opening sequence of your reality TV show? Think carefully and think hard. Ask for what you need, but for certain, do not ask for “rights” or use cases you think are marginal. The use cases: television, online, at conventions and meetings (which are referred to as “industrial rights”), theatrical, in social media eg; posts on your FB page or Twitter, internet radio like Pandora or Spotify….these are all “use cases” and boiling them down to what you need and matching those use cases to your financial resources, is essential.

3. What’s the amount of time you will be needing to use the music? Assuming you are not creating an original track, which you can do, again assuming you want a song that’s been recorded, how long do you need it for your campaign or embedded entertainment use? It does not matter how long, or how much actual time (the amount of seconds) of the song you actually use. Funny, but think about it. Great songs can convey an emotional feeling in a matter of a few seconds. So rights holders do not price according to the amount of time from the song you select for most licenses. But they do price music rights, in part, according to how long you’ll use the song. Incrementally, its standard to think about the term as: 3 months, 6 months, a year or longer (yes for use cases like TV and or Film you can buy a perpetual license) but for most advertising or promotional campaigns: the time you’ll need the song matters for cost.  You are, in effect, renting the song for your needs. In most cases, I prefer to think about the minimum time you’ll need vs the maximum. It’ll lower your costs. You can always build options that allow you to expand the term, if everything is working great.

4. In most instances, you will need two licenses; a master recording license and a publishing license. If you are unfamiliar with theses terms and most people are, don’t worry! We’ve outlined their meanings in this post on our blog titled: “How To Buy Music Rights”  http://megalv.com/2014/05/05/how-to-buy-music-rights

5. Once you have all the data organized in steps 1-4 above you’ll need to contact the “owners” of the music, the master owner (the label usually that owns the studio recording) and the publishers (those representing the writers) and propose terms for your licenses.

The two words you should never, ever, use are “how much?”. The last bit of advice is: set a budget, be disciplined. And don’t lock yourself to only one song; there are over 20 million songs out there and with discipline; you’ll get the music you need at a cost that is responsible for your business objectives.

Hopefully this gives you a roadmap to think about how much it costs to get music rights. At MEGA, www.megalv.com, you can see examples of how it all comes together, with big songs and small songs, different use cases and length of uses. This is a field where expertise matters. But we love to knowledge share, so if you’ve a question, reach out and contact us via our website. We’ll be very happy to walk you through the landscape. It is a maze for most folks, and having a trusted guide does help:)

Graphic from http://minnesota.publicradio.org

How to Buy Music Rights

You grew up loving music. It helped define your first date, your first kiss, your worst day, your best day; the friendships you value and your passion to work out. You can define the defining moments in your life by the music soundtrack you love. So you know music is very powerful. Songs draws attention, tell compelling stories, just like great branded content, advertising and marketing accomplishes. And now you have your own business. Or, you control or work in the marketing department.  And you want to buy music for a YouTube video, or to place on Facebook, or other social media accompanying visuals that promote your business. Maybe you even want to advertise on Pandora, or Spotify, or a local radio station. Perhaps, as our recent client Gatorade just did, you want a global television spot, with just the right music, to highlight your brand’s support for a large event like World Cup. So how do you start to think about how to buy music for a large or very small brand?

It starts here.

Think about the song that best helps you tell the story of your product or service. You’ve got an ad idea in mind. It’ll have visuals. And those visuals will tell a story; so the music you select should compliment those visuals, reinforce them and the “sound” of the music should directly target your intended audience and drive the cadence of the video you likely will be composing. Think hard. Ask people’s opinion around you; it could be that you have an agency recommending a certain song to go with a certain campaign which is great. But do a gut check; ask trusted customers and colleagues who understand your marketing campaign goals and the value proposition that your company is building to get alignment on the song and music you are considering. It’s really important. Great music can propel a campaign virally and make people want to see it over and over again.  Think about how many times you can listen to the same song vs. how many times you watch the same movie. Music is a powerful tool and needs the real understanding to get it right in a marketing campaign.

Can’t decide on a song? Need help? MEGA can help you find a song that will work for your business. We do it for the biggest brands, often in collaboration with their agencies and yes, also for new and emerging companies who cannot yet afford an ad agency. But we  respect your selections and oftentimes, no one knows better than you; the person in charge of building a brand, what particular song  will drive your business to even greater success.

No doubt, unless you are a musician, or your best friends have a great band, you’ll need or want to buy the version of the song that you know and love. Therefore, you’ll need two licenses: what’s called a “master recording license” and a publishing” (often referred to as a sync license)

Think of a master license as intellectual property that is created when musicians and producers go into the studio and create a “master” recording of a song. Very different from publishing, which refers to the actual songwriting; the union of the musical notes to the lyrics; hence the term “sync license” which is synonymous with “publishing”

You can and some clients do actually buy the publishing rights only and then create a version that becomes their ‘original’ master recording. For example only, if you ever hear a Beatles song used in advertising, it’ll always be a recreated master; the Beatles will not allow their original masters to be used in advertising. MEGA created a really cool version of “Paperback Writer” with the legendary Nile Rodgers producing the B-52’s. You can hear it here: https://www.youtube.com/watch?v=qCdHW9tULHM

The song was produced for the Buick Brand with McCann Erickson as the ad agency. Of course the ad was only licensed for a particular one year term so it’s not on YT anymore; but the song lives on in popular culture!

Master licenses and publishing licenses for a song are negotiated on a most favored nation basis; often called an “MFN” meaning; each side, master and publishing receives the same amount.

You will also need to consider, very carefully, the exact needs you have for the use of the song tied to your ad or campaign. Will it run on your website, how about on your social media  sites? What about YouTube, radio; terrestrial (old school FM) and or digital like Spotify or Pandora? And of course there’s television, mobile, or you might also be thinking of using it at trade shows, or running it in movie theaters…..so much to consider but ever so important because the cost of music rights are negotiated based on: intended uses, geographical territories and finally the time (or term) you need the song rights. You are in effect, borrowing the song, renting it if you like, for a particular brand, for certain territories (which can be global) for a length of time. This changes when buying rights to films or TV shows. But for this article, I’ll focus on buying music for advertising a brand or service. You can also build in options to extend the use; say if your campaign blows up successfully or you get more marketing dollars from HQ or you want to add cities, states or countries to expand a campaign focus. It’s all down to how you negotiate and purchase the rights you need and doing so upfront will always save you money.

When considering your requirements be prudent and careful. So many times we see clients who do not think about their requirements as meeting vs. exceeding their real marketing needs and therefore wind up with music rights they pay for and never actually use. Not smart!

You can also negotiate for some exclusivity of the song use during the term you intend to use it. It may be by category, for example only; all beverages, or automobiles, or you can actually negotiate an exclusive use so that no other brand can use the song in a campaign while you are using it. But all of these issues play into the art of negotiation and ultimately cost.

Now, understanding you believe you have the right song in mind and have developed the use case for the song carefully, you’ll need to negotiate the rights to the song or songs you want. There is no universal price list. You need to know the history of each song use, unless of course its brand new which poses even more negotiating opportunities because your campaign can help promote the song! But history is important. Was it used prior by other brands? when and by whom and where.

For us, at MEGA, there are two words we never utter when buying music rights and those two words are “how much”. Sounds silly? Not so much. Those two words uttered at any time in negotiating rights will cost you thousands or hundreds of thousands of dollars.

You have to set your own budgets. Be realistic. And know when and where you may have to move on to another song if the pricing you feel works for your campaign is not what the rights holders have in mind. Yes, there are experts on the ownership side of licensing songs. All they do every day all year-long is try to extract the largest fees they can from people just like you. Truthfully, the most valuable folks in these positions do much more. They search out opportunities for new music and often are very creative about pitching songs for TV shows, films and advertising. But don’t let that mask their number one job; to maximise the amount they earn for the songs they control.

We view negotiating and buying music rights as a serious business trade, where expertise can help you optimise your marketing campaign and significantly lower the costs of buying music rights. If you’ve any questions feel free to write me at danny@megalv.com or visit our website and learn even more.