Now You Know Everything About Music Licensing for Films

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This is the sixth installment of an 11-part series on music industry agreements by attorney and legal author Steve Gordon, author of The Future of the Music Business (Hal Leonard 4th Ed 2015).  Steve’s earlier installments covered contracts for indie producers, synchronization licensing, management agreements, music publishing agreements, and production agreements (from hell).  Robert Seigel is a co-author of this piece.

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Composer agreements have two forms: the creation of a movie’s music and the recording and music licensing of an unreleased song. If you are a filmmaker seeking previously recorded and commercially released music, you may be interested in reading Part II of my book, The Future of the Music Business, which includes a comprehensive discussion on how to clear music for movies.

Producers should be aware of at least one fact: licensing popular prerecorded music can be very expensive!

For instance, one of the authors of this article recently received a quote of $50,000 for a Tom Petty song for a feature film, even though the movie was a low budget Dutch language film with small commercial potential.

This article aims to help musicians who have been offered the chance to write new music for a film. For filmmakers reading this, know that hiring a composer for your movie can save you a great deal of money.

Composer Agreements

The key terms of a contract between a film producer and a composer are:

(i) the responsibility of the composer to record as well as write the music
(ii) the fee paid to the composer
(iii) the time schedule
(iv) the composer’s credit
(v) the composer’s compensation if there is a soundtrack album
(vi) the use and ownership of the music

Fees

In a normal agreement, the composer will do or supervise the music production in addition to writing it. The filmmaker pays the composer for this and sometimes pays for costs associated with production. This includes studio time, engineers, mixers, arrangers, and recording equipment rental. The composer’s fee may also factor in these costs as a Package Deal.

Typically, the filmmaker pays the fee to the composer in installments. The composer receives the first installment when signing the agreement or “spotting”. This is when the production team screen the movie to determine placement and type of music. They receive another when recording of the score begins. They receive the final installment when all services are completed and accepted.

The Package Deal

Package deals often occur with low budget movies. The producer pays to compensate the composer and covers all recording costs. The composers uses this money to pay for musicians, arrangers, studio time, and rentals, and keeps the rest. If the composer goes over budget, they pay for the costs of such overages.

However, package deals exclude certain costs that the producer assumes. If the producer hires another composer to redo the score, the producer must pay the new composer music licensing fees. The composer should try to limit the right of the producer to demand changes after delivery and to negotiate a “kill fee” in case the producer rejects the score.

Package deals often work well when a composer is using few instruments and relies on synthesizers and her own equipment and recording facilities.

Work for Hire vs. Exclusive License

A large part of composer agreements is the section on ownership rights of the music. Typically, the producer and composer agree in signed writing that the music the composer creates and records is “work for hire” and the producer owns all rights to the music. If it is not deemed work for hire under federal copyright law, then all rights are transferred to the producer.

A work for hire contract gives the producer total control of the music and the recordings. The producer can use or change the music in any manner. They have the right to include the music in the trailers, marketing materials, advertisements, and any other promotion for the movie.

The producer can also act as a music publisher and label by licensing the music to third parties, even if these parties have no connection to the movie. For example, the producer could license the music to anyone that might want to use it in a commercial.

While the composer has no say in the use or the music and won’t share in the profit from music licensing to third parties, they may be entitled to compensation in at least one form, like public performance.

The share of profit typically divides equally between the publisher and the songwriter. Though the filmmaker receives the publisher’s share for the license, the composer keeps the songwriter’s share regardless of who owns the rights to the music.

Cue Sheets

In the U.S., there is no public performance income from movie showings in theaters, nor from distribution of DVDs or permanent downloads. However, there are royalties from showing the movie on TV or internet video on demand websites (e.g., Netflix).

Cue sheets log all music in a production and are the primary means by which PROs track the use of music in films and TV. The composer should be very careful to prepare and present these to his or her performance rights organization (PRO) to ensure that he or she will be credited. Without filing the cue sheet, the PRO will not compensate the composer.

Other ‘Work for Hire’ Considerations

Work for hire deals are standard and usually non-negotiable when a major studio hires composers. These major studios usually pay large fees. An independent producer who offers a composer a more financially modest offer will usually allow the composer to keep her music rights or at least share in the income in addition to royalties.

If a producer cannot afford to pay a composer’s customary fee, the composer may agree to a reduced fee. This allows the composer to keep publishing rights. If the composer’s music is licensed, the composer could negotiate to receive their songwriter’s fee and part of the publisher’s.

Retaining Your Rights

Since producers are usually not music publishers looking to exploit music rights, they may offer a reduced fee to a composer. If this happens, the composer grants an exclusive license for the music to be used in the movie and other promotional materials while gaining the right to use the music in other projects.

The producer may also negotiate the right to make a soundtrack album for the movie. The composer agreement can go into detail on compensation for the album. Alternatively, the producer and composer can discuss this payment when they guarantee the album’s release.

If the composer keeps the music rights, the producer will usually require that the composer cannot use the music in other media without the producer’s written consent. This may last several years after the release of the movie or signing of the agreement. After the agreed upon period, the composer can place the music in any other movie, television program, or audio-visual project, such as a video game.

Other Usage Considerations

The agreement may set a limit to the amount of the movie’s music used in an album. This is to prevent an album of the composer’s music from competing with the soundtrack album. If a composer creates his or her own album and uses the some of the movie’s music, there will usually be a requirement to credit the movie.

Producer’s Acceptance

Before accepting the final score, the producer has the right to request certain changes to the music. The producer also has the right to not use the score provided that they paid the composer. This is known as a “play or pay” clause and entertainment business deals use the clause frequently.

Play or pay is usually non-negotiable for two main reasons: it assumes the producer paid the full composer’s fee and it allows the producer to reject the score if they feel it doesn’t fit. To keep the composer and producer on the same page, they can agree that the composer will provide part of the score and the producer can decide whether work should be continued. If the producer decides against the score, the composer will receive some agreed upon “kill fee” but allows the producer to use the music during the trial period.

Credit

Composers should negotiate their credit carefully because good credit can mean higher fees for future works. A good option for credit negotiation is single card credit. This means that only the composer’s name will appear on the scene during the main credit sequence.

Single Song Agreements

Getting music for movies can take different forms. This last agreement is for composers who have written but not produced a specific (single) song. The filmmaker wants the composer to record the song to put in a music video for the end credits. In this deal, the composer has a great deal of leverage because the song already exists. In this situation, the composer can negotiate a license rather than work for hire.

If the filmmaker wants the composer to write an original song, the contract would look more like a work for hire.

The Contracts

The first contract is a standard pro-film producer form of agreement. It makes all the music a composer creates and records a work for hire for the filmmaker. It also gives the filmmaker the right to demand that the composer make an unlimited number of changes in the music without the film producer paying more compensation.

The second agreement is much more composer-friendly. It is not a work for hire agreement. Instead, the merely grants the filmmaker the right to use the music in his movie and retains all other rights. The composer agrees not to license the music for another full length film for a period of time.

This contract also limits the time that the filmmaker can demand changes to two days after the composer delivers the final mix. It also provides for a “kill fee” if the filmmaker decides that the music delivered by the composer is unacceptable.

The last agreement is for the recording of a single song that the composer previously wrote but never recorded. Like the second agreement, the composer grants a non-exclusive license to the filmmaker and retains all other rights. In this case, the composer also allows the filmmaker to use the recording in a promo video for the movie.

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I hope this article makes your movie music licensing a far easier process, while giving you far greater options and leverage.

Thanks for reading! Steve.

Steven R. Gordon, Esq. ([email protected], www.stevegordonlaw.com) is an entertainment attorney specializing in music, television, film and video. His clients include artists, songwriters, producers, managers, indie labels, music publishers as well as TV and film producers, and digital music entrepreneurs. He provides music and sample clearance services for producers of any kind of project involving music. Mr. Gordon is also the author of The Future of the Music Business (Hal Leonard 4th ed. 2015).

Robert L. Seigel, Esq. ([email protected], www.rlsentlaw.com) has more than twenty years experience in the counseling and representation of producers, writers, directors, distribution companies and foreign sales agents concerning development, production, marketing, distribution and exploitation of fiction and non-fiction film, television, publishing and new media projects. His clients’ projects have appeared theatrically and on network, syndicated, public and cable television and have earned Academy Award and Emmy nominations and awards as well as prizes at major film festivals.

The authors gratefully acknowledge the assistance of Ryanne Perio, Esq. in the preparation of this article. Ryanne is an associate at Manatt, Phelps & Phillips, LLP where she focuses on intellectual property litigation. They would also like to thank Clémence Barbet-Gros, a graduate law student at Lyon University, France, and Sonia Hanson, a recent graduate of the University of Minnesota Law School.

Top image: Universal Studios backlot, photographer: ‘Cliff,’ licensed under Creative Commons Attribution 2.0 Generic (CC by 2.0).