The Insider's Guide to Music Licensing

Copyright © 2014 by Brian Tarquin

All Rights Reserved. Copyright under Berne Copyright Convention, Universal Copyright Convention, and Pan American Copyright Convention. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means, electronic, mechanical, photocopying, recording or otherwise, without the express written consent of the publisher, except in the case of brief excerpts in critical reviews or articles. All inquiries should be addressed to Allworth Press, 307 West 36th Street, 11th Floor, New York, NY 10018.

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Published by Allworth Press, an imprint of Skyhorse Publishing, Inc.

307 West 36th Street, 11th Floor, New York, NY 10018.

Allworth Press® is a registered trademark of Skyhorse Publishing, Inc.®, a Delaware corporation.

www.allworth.com

Cover design by Mary Belibasakis

Library of Congress Cataloging-in-Publication Data is available on file.

ISBN: 978-1-62153-396-2

Printed in the United States of America

Table of Contents

Foreword-Ben McLane

Chapter 1 Introduction to Music Licensing—The Basics

Sync and Master Fees

Industry Resources

Chapter 2 Music Production Libraries

Interview with Marc Ferrari—MasterSource

Interview with Jonathan Firstenberg—Music Producer

Chapter 3 Mechanicals, Sync, and Masters

Mechanical Royalties

Federal Case Mishap

Synchronization License

Master License

Interview with Tanvi Patel—Crucial Music

Interview with Brian Perera—Cleopatra Records

Interview with Aaron Freeman—Redeye Distribution

Chapter 4 PROs: What They Do

ASCAP

BMI

SESAC

Verance and the Value of Watermarking

Know Your Affiliates

Resigning from a Society

Interview with Hunter Williams—SESAC

The Insider’s Guide to Songwriting Conferences—Dan Kimpel

Chapter 5 Music Supervisors and Editors

Communication Is Key

Film and Television Music Guides

7 Tips to Make You Successful

Interview with Barry Coffing—MusicSupervisor.com

Interview with Ritch Esra—The Music Business Registry

Interview with Mark Nardone—Editor in Chief of Music Connection magazine

Industry Profile: P. J. Bloom Neophonic, Inc. —Larry LeBlanc

Chapter 6 Liberation of Digital Distribution

Brick-and-Mortar-Distribution

Digital Age

The Orchard

IODA Royalty Statement

Industry Profile: Richard Gottehrer, The Orchard —Larry LeBlanc

Chapter 7 Royalties, Copyrights and What To Expect

Sound Exchange

Record Royalties

Personal Working Experience

The Harry Fox Agency

Managers

Other Royalty Streams

Neighboring Rights

Summary of the Rome Convention for the Protection of Performers, Producers of Phonograms, and Broadcasting Organizations (1961)

Copyright Basics

Interview with Joshua Graubart—Legal Advice

Copyright Litigation

Chapter 8 Selling Your Royalties

Understand Breakdown of Royalties to Sell

Know the Sales Breakdown

Work with People You Can Trust

Sketchy Investors

Tough Times

Interview with Sean Peace—Royalty Exchange

Sell Your Music To Asian Markets —Stefan Broadley

Chapter 9 Music Composers—Unsung Heroes

Getting in the Zone

Interview with Hal Lindes—Composer Extraordinaire, Dire Straits

Brian Tarquin Launches TVFilmTrax.com, Relocates Jungle Room Studios —Matt Gallagher

Interview with Stanley Clarke—Composer/Bass Legend

OutTake —Tony Verderosa

OutTake —Michelle Crispin

Chapter 10 Industry Insiders

Interview with Aaron Davis—MusicBox/Ole Music Publishing

TuneSat —Albert Vega

The New Parameters of Film & TV —Dan Kimpel

Appendix A—Music Library Guide

Appendix B—Performance Rights Organizations

Appendix C—Music Library Contract

Appendix D—Modern Library Agreement

Appendix E—Work for Hire Agreement

Appendix F—Distribution Agreement

Appendix G—Foreign Distribution Contract

Appendix H—Exclusive Recording Agreement

Appendix I—Assignment and Administration of Income Rights

Index

Foreword

by Ben McLane, Esq.

The book you are holding in your hands is a must read for anyone that is working in—or is considering breaking into—the music business, because it explains a surefire method to get paid from music. Despite all the so-called doom and gloom associated with free downloads, paltry streaming royalties, and empty venues, the demand for music in film, TV, commercials, the Internet, radio, and other forms of media is increasing daily and globally. In TV alone there are countless channels clamoring for content, and the number of cues contained in one reality show episode can be numerous. This is great news for music creators/rights holders (both the song and master copyrights), because that means cold hard cash is being paid to the music creators/rights holders for providing the music that drive these shows. Monies can be earned either on the front-end, the back-end from performance, or often from both. Moreover, there are really no barriers to licensing music. The door is open to all ages, creeds and colors. In the licensing world—unlike the Top 40 game—all anyone really cares about is the music; not how old someone is, what they look like, where they live, who their father is, or how many friends they have on Facebook. The link between the music creator/rights holder, the media outlet, and the compensation, is known as a license. The basic purpose of this book is to untangle all the moving parts and teach the reader how to make it all work for them. Numerous helpful tips on maneuvering the music licensing universe and its players are sprinkled within, and well-worth applying to one’s career.

Over the last twenty years, the author, Brian Tarquin, has lived, breathed and battled his way to become one of the top composers, producers, artists and executives in the entertainment business—and he has emerged as an expert on licensing along the way by really getting his hands dirty and doing it bottom-to-top (from indie films to major network shows on MTV, CBS, ABC, and NBC). Doing it so successfully in fact, he has won three Emmy Awards and charted Top 20 in Billboard magazine in the process, and he has had the honor of being involved in projects that included such musical legends as Santana, Eric Clapton, Jeff Beck, BB King, Stevie Ray Vaughn, Stanley Clarke, Jimi Hendrix, Bob Marley, Steve Vai, Tommy Bolin, and ZZ Top. As a composer, artist, and music library owner, Brian has seen all sides, and his unique perspective has allowed him to master the art of the music licensing deal. Therefore, not only does his book interpret in plain English what music licensing really means and how to profit, it also debunks the most common mysteries, myths, and rumors associated with licensing. Simply put, the reader is getting the real skinny from someone who intimately knows the process, inside and out, and who, as an artist himself, actually cares about making it really work for the creator—so that person can benefit and thrive. Better yet, as a bonus Brian has included incisive interviews with several of the most important and experienced executives that operate in the area of licensing (i.e., music supervisors, composers, and many others). The reader will gain invaluable knowledge from the advice offered by the folks found within these pages. Hundreds of years of combined experience are presented here in an easy-to-digest form. All real insider stuff.

On a personal note, I have worked for and with Brian as his music lawyer for many years and have seen firsthand the dedication and professionalism he applies to the creation of his art, how he markets it, how he protects his interests, and how he respects all the participants that make the wheel go ‘round. In addition, Brian has mastered the art of adapting to new media/technology—such as digital formats/platforms—and staying current with the trends, all the while maintaining mutual respect with the key decision makers. He is a model of how to persevere, adapt, and make it in the music business. His numerous awards speak for themselves, and his relationships with name artists and marquee, show-music supervisors are second to none.

Bottom line, Brian Tarquin has made a great living and raised his family from licensing—now you can too. Read on and find out how.

Ben McLane, Esq.

Entertainment Attorney

www.benmclane.com

Chapter 1

Introduction to Music Licensing—The Basics

The age-old question always seems to be, How do I get my song placed on a TV show? As you can guess, it is certainly not as easy as it looks. There is a lot of legwork, phone calls, research, and of course that certain right timing factor.

Just because a show played a dance vocal song in a scene, does not mean that your dance vocal song will be played on the same show the following week. This might have been a rare situation that called for that particular style and may not be a reoccurring style in the next upcoming episodes. There are so many factors involved with music licensing, most importantly, building your relationships with music supervisors, editors, and television music licensing departments.

When I started in the late ‘80s it was much more of an open field for licensing music to TV and film, whereas, today, it is a lot more competitive out there on the street. The proverbial best kept secret on actually making income on your music isn’t a secret anymore. Hence, through the years I’ve seen both sync and master fees (sync refers to the publishing side of a song, and master means the actual audio recording of a song) and the amount that PROs (Performance Royalty Organizations), like SESAC, ASCAP, and BMI, pay, go down.

As more people get into the game, the pot remains the same, so obviously with more people the supply is greater. In turn, license fees become smaller, as do performance royalties, which is good for the shows licensing the music because it makes the fees cheaper. Then there are your newcomers on the scene that offer their music for free, no sync and master fees, which can be very bad for the rest of us. As the old saying goes, Why buy the cow, when you can get the milk for free? Well this can easily pertain to many business models that people are using today, just out of sheer ignorance.

For instance, the Discovery Channel uses this model and insists on taking 25 percent of the publisher side of any catalog they license. Unfortunately, people jump into the pool before they realize there is no water in it! Novices think this is a surefire deal and that they will make tons of money from the back-end writer performances. Well I hate to break it to you, but the Discovery Channel performance royalties equal pennies on the dollar; absolutely laughable.

SYNC AND MASTER FEES

So let’s recap this deal. You give up sync and master fees and 25 percent of your publishing just to get airplay on a channel that pays pennies for your song for a term of in perpetuity. This is because each broadcast license a network has with a PRO varies a great deal. The license fee paid to a PRO by the Discovery Channel is a fraction of what ABC-TV pays to the PRO. Why? Because these fees are measured by the size of the broadcast and the viewership is measured by the Neilsen ratings. Hence large networks such as CBS, ABC, and NBC, which have the largest numbers of viewers, have the most expensive airtime, so it’s only natural they will pay the most into the pot. Cable channels like Discovery, Animal Planet, and the History Channel may only air in certain parts of the country, therefore their distribution is not as strong as the networks.

The other factor in all of this is how each of the PROs pay, and this varies during different parts of the viewing day. So when ABC-TV pays the licensee fee to each of the PROs, it is in a lump sum. They don’t break it down by paying fees for each show they air; this is up to the PROs to do for their affiliates. Generally, the highest paying time is primetime, as opposed to daytime and overnight.

For example, SESAC uses the following Royalty Formulas:

Station Count multiplied by Use Type Weight, multiplied by Duration, multiplied by Time of Day Weight, multiplied by Affiliate Share, equals Credits.

Television License Fees Available for Distribution divided by Total Credits, equals Value Factor.

Credits multiplied by Value Factor, equals Royalty Payment.

Now back to our Discovery example, their rates are so low because the license fees they pay to the PROs are so low. Now if you did the same deal with a major network, the back-end monies would be greater. Still, I have to say the whole idea of giving away 25 percent of your publishing just to have them use your music really does not sit well with me. What’s next? Pay the channel to play your music? But as we all know there is always someone out there who will do this deal.

Another broadcast company to be aware of is ESPN because they do not pay broadcast licenses to PROs, and somehow they get away with it! They do what are called direct licenses with music libraries and suppliers, which is a terrible practice because it lowers the value of music, and many libraries don’t pass on the writers’ shares to the composers. If you compose for them, they are essentially buying your writers’ and publishers’ performances with a one-time, work-for-hire fee with no residuals on the back-end. ESPN is owned by ABC-TV, the parent company of which is Disney, and surprisingly, they get away with not paying a license to SESAC, ASCAP, or BMI.

For twenty years I’ve been trying to find a definitive answer for how they can get away with this without being taken to court by the PROs, considering all of the music they play on their shows. The only answer I ever seem to get is that shrewd lawyers run ESPN and they have found a loophole. Again, no one stands up to them, not even the large music libraries or publishers that have leverage.

With this all being said, I do understand why certain people do gratis deals (waiving sync/master fees) if they are starting out in the business and need to build up a credit list. This is why music libraries are a good option for composers starting out. Good reputable libraries will split any sync/master fees with you, and although you give up your publisher performance royalties, you retain your writer’s, and in some cases the underlying copyrights. I always encourage composers to contact shows directly and suggest work-for-hire compositions. This is a very good way to build your chops, credits, and relationships. In the beginning of my career this is how I started out, because of which, to this day, I have maintained many of the same relationships.

INDUSTRY RESOURCES

There are many shows that look for talent to keep their shows fresh, and with all of the reference guides and Internet sites, it is easier than ever to find information. Back in the day, I had to actually watch the shows and record them on VHS—slow down the ending credits to see who was licensing music for the shows. There are some great resources out there, the Hollywood Reporter, Music Connection magazine, and one of the most specific for the field, the Music Registry, run by Ritch Esra. The Music Registry publishes guides such as Film & Television Music Guide, A&R Registry, and the Publisher Registry, all of which are updated a few times a year. However, the Film & Television Music Guide is particularly good, listing actual music personnel from television networks, music supervisors, music editors, video game companies, and trailer houses from around the country. It lists specific music titles and contact information, including email addresses. It is a very resource-filled guide.

I remember back in the early ‘90s seeing an advertisement in the back of the Hollywood Reporter, in the classified section, for a small music placement company called Red Engine Music. I sent over some of my songs, and the owner, Marc Ferrari, former guitarist from the hair band Keel, contacted me and added my songs to his library. So started my longtime friendship with Marc and we have helped each other out ever since. Marc turned that library into MasterSource, which focused on vocal tracks and filled a much-needed niche in the marketplace.

Before that time no other music libraries were producing vocals, which forced productions to go to large publishers to license such music. Marc was ahead of the curve and realized the value of supplying vocals to the film and TV community at a cheaper price than what the major publishers were asking. So it’s no wonder he went on to sell MasterSource to Universal Publishing years later for several million dollars. This story alone should be inspiration enough that it is possible to be very successful in the music licensing business.

The resources and the need for music are there; it’s up to you to hustle your songs and get them placed, and hopefully this book will assist you.

Chapter 2

Music Production Libraries

A common question I am always asked is, What is a music production library? Well, I’m not going to bore you with a technical answer from Wikipedia, however I’ll explain it from my twenty years of experience composing for them. Simply, they are music companies, like FirstCom, Megatrax, Sonoton, and others who hire composers to produce affordable music for all sorts of broadcast and film productions. So if a show wants a pop-vocal song and can’t afford to license a track by Rihanna from Def Jam, they go to a place like Killer Tracks and license a sound-alike. Pretty straightforward and simple for productions because these libraries own both the masters and the syncs (publishing), so it’s a one-stop shop.

In the new millennium there has arisen a new business model for these libraries—at places like Crucial Music, Pump Audio, and Rumble Fish—where these companies aren’t hiring composers to build their catalog, but are instead licensing tracks from a plethora of musicians out there and offering the songs up for licensing. In the latter case, musicians can still own their own copyright and these deals are usually non-exclusive, because they either change the names of the songs or use specific codes in front of each song. See the Music Library Contract in Appendix C to better understand how this business model works.

The first music library model mentioned above is known as a work-for-hire deal, in which the library owns the copyright, masters, and publishing of the music composed or produced by the composer. See the sample work-for-hire contract at the end of this chapter. This has always been the most common way for libraries to do business because they control all aspects of the music, except the writer’s share. They become a one-stop shop where they license everything to a particular client so that the client doesn’t have to get separate approvals from various sources.

Licensing from record companies has always been a bump in the road for music supervisors, because the labels may only have control of the masters, leaving the supervisors to chase after the publishing side, commonly known as the sync side. In many cases, the sync could be split between various companies or artists stretching across the globe, making it very difficult to get approval from all parties in time to make the airdate of the broadcast. This is traditionally why music libraries came into existence, filling the void and need for music licensing in a timely manner. In turn, with such a service, the library can put itself at legal risk if the composer uses an uncleared sample, or copies another song or piece of music in the public domain without permission.

There is an additional form called a Certificate of Authorship that a composer has to sign along with any co-writers to assure the company that the music delivered is in fact original music. You can understand the company’s point of view, because the music can appear anywhere in broadcast and non-broadcast, making it essential to have music that is original, free and clear to license without any additional clearances. This is similar to the indemnity clause, but extends itself to any co-writers that contribute to the work-for-hire music.

I know from experience that there can be lots of assumptions made in a contract with a composer or artist. This happened to me when I licensed a few tracks from an ‘80s bass player with various tracks containing famous guitar guests. He of course assured me that the defunct label that had originally released the tracks had no claim to them and that he owned everything, free and clear. This of course came back to bite me because when I released the Guitar Master Series on my label, BHP Music, Ltd., a large music publisher came to me and made a claim to all the songs I had licensed from the bass player. Thankfully I had the indemnity clause in the contract. It saved us from going to court because, in short, it stated that the licensee (the bass player) cleared me (the licensor) from any third party damages or claims.

Now if that was not bad enough, a couple of years later I was sucked into a lawsuit, even with the indemnity clause. I had licensed a few tracks from another indie label in Los Angeles for Volume 2 of the Guitar Masters Series, and a couple of months into the release all hell broke loose. It turned out that one of the tracks (a Van Halen cover song), which contained a one-time, ‘80s guitar hot shot, was being disputed between the guitarist and the other indie label. So even though I had legally licensed this particular track and released it through Redeye Distribution, I was still dragged into this ridiculous, multi-million dollar lawsuit. Indemnity clause or not, I was caught in the middle and had to ride out the storm. The only good thing was that the other label company covered all of the legal expenses, yet I still had to seek out legal advice from my lawyer. One big mess! Anyway after two years and a deposition I gave in to the other side’s lawyer and agreed to a three-hour negotiation at the Federal Court House in New York City. The other side finally settled for a fraction of what they originally wanted. That’s really called making a federal case!

Exhibit C

CERTIFICATE OF AUTHORSHIP

The undersigned,            (hereinafter Contributor) residing at

hereby certifies that he/she has rendered writer, composer, arranger, programmer and lyricist (if applicable) services in connection with various musical compositions (the Compositions) and master recordings embodying said Compositions (the Masters) as listed on the attached Schedule, collectively Musical Works, within the scope of Contributor’s engagement by (Composer) in connection with the album project indicated on the attached Schedule (Album Project).

Contributor hereby agrees that the results, proceeds and product of Contributor’s services in connection with and relating to the Album Project have been solely created for Composer by Contributor as a work made for hire specially ordered or commissioned by Composer, or as Composer’s employee for hire, for use in any and all media, with Composer being deemed the author of the Musical Works. The undersigned hereby acknowledges that Composer as author of the Musical Works, is the sole and exclusive owner of all rights of every kind or nature, whether now known or hereafter devised (including without limitation all copyrights and all extensions and renewals of copyrights) in and to the Musical Works, with the right to make all uses of the Musical Works throughout the universe and all changes in the Musical Works as Composer deems necessary or desirable. In the event that the Musical Works do not legally constitute a work made for hire, Contributor hereby grants, sells, assigns and transfers all right, title and interest, including without limitation the copyright, in and to the Musical Works to Composer to the same extent provided herein.

Contributor hereby waives all rights of droit moral or moral rights of authors or any similar rights or principles of law which Contributor may now or later have in the Musical Works.

Contributor warrants and represents that Contributor has the right to execute this document.

Contributor agrees to execute any documents and do any other acts consistent with this Certificate of Authorship as may be reasonably required by Composer or its assignees or licensees to further evidence or effectuate Composer’s rights as set forth in this Certificate of Authorship. Upon Contributor’s failure to do so within ten (10) business days following our written request, Contributor hereby appoints Composer, or its successors and assigns as its limited purpose attorney-in-fact for such purposes (it being acknowledged that such appointment is irrevocable and coupled with an interest) with full power of substitution and delegation. Composer will use reasonable efforts to furnish Contributor with a copy of any documents so executed.

IN WITNESS WHEREOF, Contributor has executed this Certificate of Authorship as of this

The newer music library business model (see Modern Library Agreement in Appendix D) is a lot more flexible and is based on licensing preexisting music from artists. Usually companies license the music from an artist on a gratis, non-exclusive basis in perpetuity. Companies can build a catalog fairly quickly and not have to pay the upfront costs for work-for-hire composers. The downside of this is that the catalog that is built will not be a custom one, rather one that depends on the sources you license. Because of today’s plethora of music spurring from the digital revolution, which lets everyone record their own tracks on small computers in the corner of their living rooms, artists are producing more music than ever before. Not that long ago, less than a generation, it was a lot more costly to produce music. An artist would have to rent studio time, buy tape media, and pay for engineering costs, mastering, pressing, and artwork. This whole expense process has now streamlined into a convenient little computer; hard to believe for an old analog dog like myself. However, on the other side