Tag Archives: pandora

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