Marketing Procurement

Music Licensing: Clear as mud

Music Licencing

“Pull Quote”

Middlemen who insert themselves in the licence chain of title are the enemy of transparency. Don’t let them siphon off your production budget.

In the world of marketing procurement, transparency is a key watch word. Advertisers rightly expect full visibility along the supply chain, with arms’ length relationships between each party. Sadly this doesn’t always happen.

I recently worked on an audit project, reviewing the sync licence for an existing music track used in UK commercial. As is common in the discovery stage, the licence wasn’t fully executed – it wasn’t signed by the licensor. What was more concerning was the identity of the licensor.

For the use of any existing track, it’s essential for brands or agencies to identify the correct rights owners. Typically there’s a record label that controls the sound recording (“master rights”) and one or more music publishers that control the song or composition (“publishing rights”).

Even if the brand or agency engages a clearance specialist to broker the deal, the licences should be directly between the rights owners (licensors) and brand or agency (licensee).

I am increasingly seeing instances of music supervisors inserting themselves in the chain of title between licensor and licensee. In other words, they are licensing in the rights from record labels and music publishers; and re-licensing them to brands and agencies. No doubt these companies sell the benefit as ease of use but this charade masks a whole host of disadvantages, namely:

• You’re not dealing with the actual rights owner, but a middleman instead
• You have no contact with the actual rights owners so are one-step removed
• You don’t know for sure which rights the middleman claims to control
• You don’t know how much they’re creaming off the top from the fee you pay them
• You’re probably also paying a consultancy fee in addition to the licence fee

You may also be interested in: Sync Market: Requires due diligence and smarter procurement from brands

My strong recommendation to all brands and agencies is not to do these deals. By all means engage a specialist to help broker licences but their role should be independent and not as a contractual party.

The key watch outs are:

• Insist on licences direct from the actual rights owners
• Insist on paying licence fees directly to the actual rights owners

Middlemen who insert themselves in the licence chain of title are the enemy of transparency. Don’t let them siphon off your production budget.

About the author

Richard Kirstein is Founding Partner of Resilient Music LLP. Set up in 2010 to help brands buy music smarter. Resilient Music works with brands to implement smarter strategies to buy licensed music from rights owners, helping them get the music they want at a fair price. Contact Richard at LinkedIn