Music Licensing in the Internet Age

Music Licensing in the Internet Age : 

Music Licensing in the Internet Age UTEP 2-1-2009 Randall Foster Licensing & Business Development Manager Naxos of America, Inc.

Music Licensing: a definition : 

Music Licensing: a definition Music licensing From Wikipedia Music licensing is the licensed use of copyrightedmusic. Music licensing is intended to ensure that the creators of musical works get paid for their work. A purchaser of recorded music owns the media on which the music is stored, not the music itself. A purchaser has limited rights to use and reproduce the recorded work.

Types of licenses : 

Types of licenses Film Promotional Product Videogame CD Compilation Digital Music Player (pre-loaded) Web Streaming Download TV Advertising Outside the Box!

But really, how does it happen : 

But really, how does it happen In the classic model: Film Boy (or girl!) makes movie, Boy wants music for movie, Boy contacts Licensor (ME!), we negotiate (heavy petting), come to agreement, a license is issued and Boy goes off happily into the sunset. This was the norm for years. It still exists but the expanding technologies make things a bit more complicated as you get outside of the film licensing world.

Today In Any Licensing Model : 

Today In Any Licensing Model There are a few things that must be disclosed when approaching a company for a license- these are universal details! Type of Usage- i.e. film? Compilation? Commercial? Dance recital? Web usage? Etc. Breadth of Usage- i.e. how many units will you sell/pay an advance on, how long do you need rights, where will you sell your product, how much other music will be in your product/project, if there is other music- do you offer an MFN clause? Financials- be as detailed as you possibly can (without giving away proprietary information)

Keys to an easy and successful license experience : 

Keys to an easy and successful license experience Submit a written Proposal!! Tell me what you want to do and what you wish to use Be detailed In your proposal, include your Name, Company Name, Description of your project, budget (if available), and a full synopsis (if it is a film) Make an offer It never hurts to come in with an initial offer (based on industry standards)… who knows, this could eliminate the need for negotiation

Challenges in the digital age : 

Challenges in the digital age Licensing music today is full of challenges. These are the key issues that have affected the Licensing business Changing formats Flexibility For Profit VS Not For Profit- seeing the difference Willingness to TRY

Changing Formats : 

Changing Formats Lets look at how things have changed over the past 10 years.

10 years ago : 

10 years ago Licensing was pretty simple. Fewer formats MP3 was a baby! Napster was just about to get sued- will forever be blamed for the downfall of the industry Internet was a mere shadow of what it is today Streaming was nearly non-existent and irrelevant CDs and Sync (movie licensing) were everything Less understanding of copyright law and implications No one knew what the R.I.A.A. was - let alone feared them as they do today Licensing was “found money”- CD Sales were KING

5 years ago : 

5 years ago Apple Rules the roost New digital music services are popping up overnight and disappearing just as quickly Industry trying to redefine itself Licensing sees a growing role and becomes more important as a part of the business model

LICENSING TODAY : 

LICENSING TODAY Deals are more complex Rapidly expanding formats There are more formats of music now than EVER CD, MP3 (varied bit rates), WAV, FLAC, Streaming, DVD, Bluray Audio, Bluray Video, SACD, and more! More formats = more $$$$$ Copyright and Author’s/Owners rights are more widely recognized Licensing is viewed as a legitimate line item- VERY important to overall earnings The market is rife with Opportunities

LICENSING TODAY cont. : 

LICENSING TODAY cont. Above all, in today’s market place- companies must be FLEXIBLE The old adage of “well this is just how it has always been done” no longer holds water. Licensors must find value in the mundane, cross-promotional opportunities abound and flexibility and an open mind are the keys to succeeding in today’s marketplace.

For-Profit VS Not For Profit : 

For-Profit VS Not For Profit While this seems like it should be quite obvious- there are members of the music industry who don’t subscribe to delineating between work that is innocently not for commercial use and work that has a fiduciary benefit for the producer.

A few case studies: : 

A few case studies: Meet Holden Lenz. He is 18 months old and is being sued by Prince. He “infringed” Prince’s copyright by dancing for 29 seconds on his mother’s YouTube video. This is NOT FOR PROFIT Shame on Universal Music Publishing

Another viewpoint : 

Another viewpoint Enter the Blackeyed Peas. In the fall of 2009 172 students at the University of Montreal met for a few weeks and choreographed a massive video project. Rather than sue them for the unlawful use of their music, the Blackeyed Peas chose to leave the video up on Youtube. The result being more than 4 Million youtube hits (paying out both Publishing revenue and a share of the ad-generated revenue from the video.) THIS IS ALSO NOT FOR PROFIT- illegal use of the song… yet no lawsuit ensued.

The difference? : 

The difference? So what is the difference between these two cases? Why did the students get a free ride, whilst Holden got the short end of the stick???? Open Mindedness! And the ability to see the value in the gray areas surrounding the Copyright code.

Willingness to try new things : 

Willingness to try new things While this goes along with flexibility, a company’s ability to see the value in something as abstract as a lip syncing video, a mashup DJ, baby video, web stream, or download is quite essential to success. This flexibility allows a varying degree of business models to be utilized to produce multiple revenue streams from your intellectual property.

Outside the Box Examples : 

Outside the Box Examples A Few outside the box deals that have been profitable for me:

Hollywood Examples : 

Hollywood Examples

Advertising Examples : 

Advertising Examples

TV Examples : 

TV Examples

In Conclusion : 

In Conclusion Licensing today is easy. Assess Monetize Negotiate Cash in!

That’s a Wrap! : 

That’s a Wrap!