Filmmaking 2.0

Anatomy of a Music License

August 2009

By Jon M. Garon*

This is part of a series of book excerpts from The Independent Filmmaker's Law and Business Guide: Financing, Shooting, and Distributing Independent and Digital Films designed to introduce filmmakers and others interested in creating content on the legal issues involved in the filmmaking process.

The industry tradition has been to create a series of contracts for each of the types of rights, rights-holders, and media.1 This can result in an absurd number of separate contracts and confusion regarding the use of the music over the course of the life of the film. Every Hollywood studio has a large team of lawyers and paralegals who focus exclusively on the music licensing issues for their productions.

1. Music Clearance Services

The independent filmmaker must find a way to accomplish this same task, so that the filmmaker holds the rights necessary to distribute the film. If the music sought is held by the larger record companies and publishing houses, then the most efficient approach may be to work with a music clearance service. In some cases, the company may be the licensing agent for the film. For example, the Harry Fox Agency, a division of National Music Publishers' Association, Inc. is the source of both the composers and the record companies. Filmmakers may find that despite the size of the Harry Fox library, the type of works available (in both genre and fame) does not suit the filmmaker’s goals.

Similarly, for more generic music, a music production library will provide a helpful source of music in a wide array of styles, instruments and arrangements. These production libraries own both the composition and sound recording copyrights, so that they provide one-stop-shopping for the musical needs of the production.

Another type of bureau provides a clearinghouse service. These companies do not own any rights in music themselves, but serve to locate the rights requested, help establish the pricing, and ensure that the appropriate rights are identified. Some of these companies are listed in the Appendix to the book.

In addition, independent filmmakers may wish to take advantage of The Music Report. The Music Report is actually an arm of Breakdown Services, Ltd., providing a casting-like breakdown of the musical needs for the film. The Music Report distributes the list of the screenplay’s song needs to subscribing music publishing houses and record companies who will then submit songs to the film company for consideration. While there are times where the filmmaker cannot substitute anything for a particular song, there are many other instances where a song connotes an idea, genre and age. Less known but more cost effective choices may be more compelling than the obvious first choice identified in the screenplay. Since this service is free to the filmmaker, it provides an excellent opportunity that should not be overlooked.

2. Essential Terms

The essential terms of the music license are suggested below. For some of these choices, the costs may be prohibitive and the filmmaker must choose to do without the desired song or risk buying something less than all the rights that may possibly be used.

a. Term

The rights should last in perpetuity. Although some contracts provide for five year terms, this means that future sales of rights can be frustrated by the inability to acquire (or even identify) the rights. At a minimum, the renewal provisions should guarantee the fee and the right to exercise the right. Nonetheless, too much can go wrong, and a new owner of the music rights (such as a company who purchased the music library in a bankruptcy sale) could demand exorbitant fees for the new grant of rights. Of course, if the movie is never released or has only a short run, then the cost savings of the shorter term was worthwhile. Since this is generally not the bet being made by independent filmmakers, a short music license term is probably the wrong place to save unless the savings is truly dramatic.

b. Territory

The territory should be worldwide. In fact, some contracts now provide “the universe” rather than the world. Given the growth of the International Space Station and the length of copyright that could well extend over a century, the universe may be the more appropriate territory. There is no reason license anything less than worldwide, because even short delays involving licensing the soundtrack at the time of foreign distribution may frustrate the distribution agreements.

c. Media Covered by License

The standard contracts will typically require a list of media. Given the rapid change of technology and the guarantee that the growth of technology is highly unpredictable, the media should be “all media now known or hereafter developed.” This should also avoid future conflicts over various forms of Internet distribution and whatever will come after.

Older contracts may list theatrical exhibition, television (be sure to include free and pay or further identify the various tiers of broadcast, satellite and cable television), foreign distribution, specialty markets (16mm prints, airplane cuts) but will often omit some of the home distribution technologies that include videotape, laser disk, DVD, etc. The list of media for both the public performance category and the home use category are evolving and both should be defined broadly.

d. Public Performance Rights

Most music license agreements are drafted very narrowly. As a result, traditional contracts recognized the public performance rights were only necessary in those media that were distributed to the public. The license of a song in a film covered the theatrical exhibition and broadcast rights. Home presentation of VHS tape does not require any public performance right, so many contracts do not give any public performance rights for the VHS tapes or similar products. Nonetheless, videos are often shown in schools, community centers, and other smaller public venues. Without the public performance rights in the VHS tapes, DVDs etc., the filmmaker cannot authorize any such performances. For some independent films, the guerrilla marketing planned could be frustrated by the failure to secure public performance rights across all media.
In addition, the need for public performance rights in digital works is relatively new and virtually untested under the law. If the Internet or other interactive digital technologies grow in bandwidth and sophistication, the digital performance interests in the sound recordings may become a significant right. All filmmakers, but particular those digital filmmakers hoping to exploit the Internet for some portion of the film’s distribution must purchase the limited public performance rights from the record company.

e. Reproduction or Mechanical Rights

The right to reproduce the songs is often limited to the home media market (VHS tapes, DVDs, Laser Disks, etc.). Nonetheless, each print of the film also includes a mechanical reproduction of the sound recording and the composers’ song, so the license to reproduce the song (known as the mechanical license) should also include all media. The mechanical license applies to both the composer and the record company if the record company’s original recording is to be used.

f. Synchronization Rights

The right to use the song in conjunction with the visual image is an aspect of the public performance right. As such, this provision is essential in the composers’ agreement but because of the new, digital performing rights, it is advisable in the license from the record company as well.

g. Scope of Usage

The contracts will narrowly limit the way in which the song may be used. First, the song may not be altered (although it typically can be used in part rather than in its entirety). This means that the lyrics cannot be changed. If a song is to be featured in the foreground because it will be sung by a character as a parody or otherwise changed for dramatic effect, then this particular usage must be separately negotiated and such permission will not be granted lightly. The filmmaker’s rights will be non-exclusive, allowing the copyright holders to license the song to other films as well.

Second, the song can only be used in conjunction with the entire film. Permission to use a song in the film’s commercials or trailers must also be negotiated separately. The use of the song as part of a music video based on the film must also be separately negotiated.
Third, the filmmaker must provide credits for the composers, publisher, performing artists, and record company from which the rights were licensed. These credits generally appear in the end credits.

h. Fees

The range of fees can vary greatly depending on the popularity of the song, whether the music is used in the foreground or background, whether the music is featured in the story, the budget of the film, and other songs being licensed. Typically, the U.S. theatrical and television broadcast rights are contracted on a flat fee basis. Outside the U.S., theatrical performances are covered by licenses provided by performing rights societies. The mechanical rights are increasingly based on a royalty fee tied to the number of units manufactured or sold. To get a general idea of the range of licensing fees and structures, the filmmaker or his attorney may wish to consult with Kohn on Music Licensing by Al and Bob Kohn which provides a list of licensing ranges for the various types of licenses needed.

3. Alternatives to the Music License

As suggested from the sample terms, the independent filmmaker will often choose to avoid licensing songs. The costs and administration simply outweigh the benefits to the story and film. Such a choice will not prevent the use of music; only change its source. As an alternative to licensing popular song recordings, independent filmmakers may exploit songs no longer protected by copyright because the work is in the public domain, create original songs for the movie, or purchase the copyright to the music. In these cases, unless the sound recording is also in the public domain, filmmakers commonly choose to record the music specifically for the motion picture. Regardless of the source of the song, original recordings greatly reduce the scope of rights to be licensed.


Footnote.

1. See, Al Kohn and Bob Kohn, Kohn on Music Licensing, (2d Ed. 1999). For the non-music lawyer, this is perhaps the most comprehensive and clear single volume available.  The forms included in the book are explained fully and readily usable for the film licensing.


* Jon Garon is admitted in New Hampshire, California and Minnesota.

Adapted from Independent Filmmaking, The Law & Business Guide™ for Financing, Shooting & Distributing Independent & Digital Films, A Capella Books (2d Ed. 2009) (reprinted with permission). Jon Garon is professor of law, Hamline University School of Law; of counsel, Gallagher, Callahan & Gartrell.

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You may contact
Jon Garon at
800-528-1181.