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1
Making $$$ with Your Original Music
NAMM 2013 H.O.T. ZonePresented by
Keith Hatschek, University of the Pacific
www.hatschek.com
2
Session Objectives
Attendees will leave this session knowing:
How music licensing/acquisition works
What creates value to music buyers
Who are the key players & their roles
What steps are necessary to jump start opportunities to profit from your songs and compositions
3
Hitting a Licensing Home Run
4
Four Key Themes
G = Ground Rules
V = Value as Perceived by the Market
B = Buyers, in most cases aka Licensees
C = Connections, what you’ll need in addition to your talent to develop opportunities to earn $$$
5
Part One - Ground Rules
Knowing music acquisition and licensing practices allows you to be in the conversation
Understanding © is critical for all writers
In the beginning, there is copyright, the basis for getting paid anytime someone wishes to use your original music.
“Grenade” - Two ©
6Song ©
Sound Recording ©
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Long & Strong . . . ©
The copyright duration for a copyrighted song or music cue is the life of the author/composer plus 70 years!
By registering your song © with the US Library of Congress (LOC), you gain maximum statutory protection for your works while they are under copyright - $35 per song to eFile
“Puff Daddy Hit with $4.3MM Judgment for Unauthorized Sampling of Ohio Players Song”
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Road Map to Revenue 1 TV Show Synch License
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Road Map to Revenue 2 Background Music Service
Road Map to Revenue 3 Mechanical License
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Road Map to Revenue 4 Work-for-Hire
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Public Performance RoyaltiesBonus Earnings - PROs
$2.5 Billion annual
revenue (US)
13
Ground Rules Summary
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Part Two - Value
Value (noun) – 1. a fair return in goods, services, or money for something exchanged 2. the monetary worth of something, aka “market price,” that is a price actually given in market dealings
For original music, certain qualities will help determine the relative value of each piece of music.
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Valuation Parameters
Popularity/recognition
Originality or Freshness
Branding Needs
Price/affordability
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Does Your Music Fill a Need?
Your original music has to fill one or more of the previous needs, situations, parameters outlined in order to be considered for license or purchase
The only way to know for certain is to test your music on persons working in this part of the business (Part Four)
17
Talking Market Prices
On the Low Side
“Gratis” (free) license to use single song in video game in exchange for on screen credit and link to band’s FB page
Indie film project – classic rock song, 1 year license for Canada, art house exhibition only - $500
“Bumpers” on late night live variety show – major network – short excerpt performed live from well known pop song - $400 per use
Instrumental theme song for local cable TV show – work-for-hire, one time fee $500 - plus credit
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Talking Market Prices
In the middle:
The Voice – live performance of a song by a contestant up to 1:05 in duration - $2100
Video game (music centric) add on song available to download to original purchaser of the game – 15% of retail price of the download
Parenthood TV show – use of a lesser known song by a classic rock artist - $20K per “side”
19
Talking Market Prices
Higher and higher:
Classic rock song used in major motion picture produced by Disney - $50K per side; separate option for playback use in theme parks, cruise lines, etc., $3K extra, per side if exercised
Jazz standard – master usage for retail chain covering national TV, cable, in store, Internet for US and Canada – 1 year use - $50K (song rights cleared separately)
Classic rock song used by major retail chain as audio “signature” for 12 months TV, radio (40 TV and 85 radio ads) - $400,000; option for second year would increase
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Defining License Fees
How much of the song is needed?
What is the audience?
What territories?
Term of license (13 weeks, one year, perpetuity) ?
What forms of media are requested (TV, Internet, radio, DVD, film, etc.) ?
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Other Factors
How critical is this particular piece to the project?
How popular is the song or artist today?
Are there other pieces that would work just as well and are more easily or inexpensively available?
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Part Three - Buyers
Who are the actual buyers that may want to use your music in their product or service?
Note – we’ll refer to buyers since a monetary transaction takes place, but the usual terminology is “licensee.”
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12 Buyers
Motion pictures (theatrical, DVD, streaming, etc.)
Television (broadcast, cable, web)
Radio (terrestrial, web, cable, satellite)
Commercials (TV, radio, film, theatrical, web)
Video Games Broadway musical (ex. Green Day)
Record labels (mechanicals)
Live events (sports, trade shows, annual meetings)
Sheet music publishers
Music libraries for TV, film, sports, etc.
Background and foreground music services (retail, hospitals, music on hold, etc.)
Special Products (music CDs or downloads for Hallmark, Victoria’s Secret, Cracker Barrel, Acura, etc.)
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12 Foreign Buyers
Motion pictures
Television Radio (terrestrial, web, cable, satellite)
Commercials
Video Games Broadway musical (ex. Green Day)
Record labels (mechanicals)
Live events (sports, trade shows, annual meetings)
Sheet music publishers
Music libraries for TV, film, sports, etc.
Background and foreground music services (retail, hospitals, music on hold, etc.)
Special Products (music CDs or downloads for Tesco, Burberry, Audi, etc.)
Songwriters will normally partner with a US publisher and various foreign subpublishers to leverage their songs overseas. © rules and conventions vary in foreign territories – essential to have expert advice or representation.
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Deadlines
Time is money in TV, film and advertising production
Licensing a song and master can be complex, esp. if there are multiple “owners” in the © (see “Grenade”)
Fewer people required to say “yes,” the more attractive licensing your song & master may be
Rise of “one stop” music licensing solution – one firm administers the song and master ©
Some artists are now working to hold on to both “sides” to allow easier deal-making (Nettwerk, Concord, etc.)
26
Part Four - Connections
Connecting Buyers with Creators is the job of a varied array of industry professionals – middle men
To break into the licensing revenue stream, you must build relationships with them
They must affirm that your music has value (Part Two)
27
Some Examples
Motion picture middle men
Music supervisor, music editor, sound editor or designer, label A&R rep, PRO or publisher staff (song plugger)
Advertising middle men
Advertising agency creative director or staff, commercial director or editor, video post production team
Recording artist, record label middle men (A&R)
Record producer, recording engineer, studio personnel, PRO or publisher staff (song plugger)
28
Moving Forward Three Steps to Success
Join a national and a regional songwriting organization
Benefits: conferences, workshops, webinars, 1-to-1 mentoring, co-writers, building your network, referral to music licensing attorney, music supes, publishers, etc.
Join a PRO – ASCAP, BMI or SESAC
Benefits: help you learn, connect and earn money as your songs are performed, mentoring, national and international connections
Join SoundExchange if you control master rights
29
Moving Forward
Start Researching Various Music Publishers
Benefits: nearly all successful songwriters affiliate with a music publisher to help maximize exposure and earnings
Music publishers have many more writers interested in signing than they can serve
Not all music publishers are the same
As you build your connections, ID the ones that best fit you and your creative direction
30
Wrap Up
Ground Rules – you must know them to enter the field of play and be taken seriously
Value – understand what creates market value
Buyers – they pay to use your music, study them, what they use and learn how such deals come together
Connections – pledge to connect now to songwriter organizations, then begin to evaluate PROs and publishers
31
Resources
Books
Music, Money & Success – Todd and Jeff Brabec
All You Need to Know about the Music Business – Don Passman
“Hey, That’s My Music” – Brooke Wentz
Websites
Nashvillesongwriters.com or Songwritersguild.com
Westcoastsongwriters.org
Hatschek.com