Music Licensing Rights Strategies
To Lease Or To Buy
(This article is first published in "International Documentary Magazine")
Since my article on music rights strategies was first published in The International Documentary Association (IDA) Magazine a few years ago, documentary films have continued to move into the mainstream of public awareness and interest. Technological advances make documentary filmmaking easier, less expensive and more accessible to a growing number of aspiring filmmakers. Distribution avenues that were once thought impossible, or had yet to come into being, now provide new opportunities for reaching a greater audience. The world has become increasingly complex, interwoven and instantly connected. Our need for films of the heart––films that make a difference through enlightenment and education––has become even more vital to the well-being of our world society.
With the expansion of new media formats and technologies, and thus new markets and audiences, comes increasing complexities in licensing ever more expensive popular music for your documentary, as downward trends in revenue from CD sales of popular music serve to put an increased value on the licensing of back and current record label catalogues.
This article updates the current limited rights challenges and “Lease or Buy” solutions for documentary filmmakers.
To Lease or to Buy
“All media now known or hereafter devised, worldwide, in perpetuity” is, of course, the Holy Grail of music rights licensing parameters for the documentary filmmaker. Having all your rights up front and never having to go back to the licensors for the life of your film certainly makes sense and sounds reasonable. Unfortunately, the reality is that few documentary filmmakers have the budget to afford the fees for those rights, and so must travel the road of limited rights strategies—acquiring or “leasing” only the rights needed at the time to satisfy current distribution or a distributor's requirements.
One advantage to this is that you “pay as you go,” acquiring only the rights that you need to get out and exhibit and/or sell your film in a particular medium at a particular time, thus keeping your music licensing costs down. However, as there is no guarantee by the licensor(s) that you will be able to obtain additional rights later, you must be technically able and emotionally willing to “switch out” or replace music you have effectively “rented” at a later date if those rights cannot be granted or afforded. This option is available to more and more filmmakers as they forego the traditional and expensive professional audio mix at a post house in favor of editing and mixing their films on systems like Avid or Final Cut Pro.
Going the Festival Route
A typical strategy around licensing music for documentaries that have yet to acquire distribution has been to go the “festival route.” This is a good strategy that allows you to exhibit and shop your film through usually a one-year film festival cycle, setting your term commence date from when you reasonably expect to be first exhibiting, with the territory being the United States, North America or the world. In this scenario, you request festival licenses for your chosen popular music, which are typically the lowest rates available for the minimum of rights.
Most major and independent record labels’ and music publishers’ licensing departments are increasingly receptive to granting festival rights for popular music. They very much consider this to be a licensable usage requiring their prior permissions (even as film festivals increasingly require proof of film festival music licenses as part of their application process). These licensors have taken note of the increase in film festival popularity and see the value of placing their artists' recordings and writers' compositions into films that may pick up distribution deals and require additional (and more expensive) rights in the future.
This does not mean that their strategy is “now we’ve got you and can stick it to you on the back end,” as so many concerned filmmakers ask us. We honestly do not see that type of policy nor behavior from major and most independent licensing departments. However, it does mean that you adopt a “rental” mentality with licensing popular music wherever possible. If having well-known music for festival rights increases the quality, message and value of your film, and thus its chances for distribution––but doesn’t stay throughout the life of your film––then so be it.
Note that some major songwriters and “legacy artists” may still choose to restrict their compositions and recordings to more “big ticket” licensing opportunities, such as major studio films, television theme songs and commercials.
Some festivals may require, or request options for, Internet streaming, “best of” DVD rights and even download sales. Be sure that you also request these rights from licensors, if appropriate.
Festival rights fees can range from $250 to $500 and up, depending on the type of usage (main title, end title and featured usages usually require more). Some licensors may have gratis policies or only require a small administrative fee for nonprofit or nonprofit-affiliated projects that require festival rights.
Festival Rights with Additional Optional Rights
To the initial request for festival rights, you can also add some “option rights,” such as DVD rights, limited or full theatrical rights, Internet and new technology rights, and various degrees/types of television rights (such as broadcast, cable, pay-per-view, VOD, DVOD, etc.). These rights are all further refined and defined by term, territory and, where applicable, units, advances, royalty rates, etc. This option strategy works well when you have some specific type of media distribution pending and you know the exact term, territory and other conditions that the distributor will be asking you to deliver. If those requested option rights are granted by the licensor(s), they are written into your festival rights license as an option and usually need to be exercised before the end of the festival term. Note that some licensors may not be willing to quote in advance for rights you may or may not be ready to exercise until a later date, or they may quote higher rates if asked to commit to a fee for these rights.
Going the PBS, DVD, Television or Limited Theatrical Routes as Your Initial Distribution
You can also apply the limited rights strategies to other media such as PBS (note that PBS music licensing fees are subsidized by the federal government), network or cable television, DVD or limited theatrical, depending on what distribution plans you may have on the table. For example, DVD rights parameters are typically based upon a specific term, territory, royalty per unit and an advance against a certain number of units. Television rights can be narrowed to US only, or to a specific national cable channel such as A&E or HBO, etc. Limited theatrical rights can be construed for specific dates, locations and theaters (with options to expand those rights if necessary), for those needing to qualify for awards. To these types of initial rights, you can add the options for more territories, longer term, more units, etc.
Going the “Once It's Done, It's Done” Route
Because of distribution delivery requirements and budget or time constraints, you may know in advance that you have to complete your film with a final audio mix, with no possibilities for reworking your film in the future without incurring considerable costs and problems.
You want the music that you want, but you know that acquiring the appropriate “all media, perpetuity, the world” music rights will probably be very costly. Or, you may have live music scenes to shoot, or music embedded within footage or scenes you’ve shot.
One solution the major and independent licensing departments will sometimes be amenable to discussing is the “step deal.” In this scenario, the filmmaker trades off a lower initial fee in return for later payments when certain media and/or sales plateaus are commercially realized. Typical examples include an initial lowered fee; additional payments of the initial fee at certain worldwide theatrical box office gross plateaus, as reported by Daily Variety; a one-time-only additional payment at DVD/video release; a one-time-only additional payment at first television broadcast; a one-time-only additional payment where “new technologies” are exercised, etc. Not all licensors will be willing to grant these rights, as most are not set up to be tracking and chasing down payments after the initial license. Also, some major distributors may want you to handle those payments or obtain all possible rights up front, as part of your complete delivery and assignments to them.
New and Emerging Technologies
As now literally anyone can set up a website with audio-visual streaming capabilities, it’s important to note that the major and indie licensing departments consider the online posting, streaming and/or podcasting of films and their respective trailers that contain copyright-controlled compositions and recordings a type of media usage that needs to be licensed prior to posting. If granted, this license in most cases is specific to a website URL and does not allow downloads.
Where Internet sharing and social networking sites such as YouTube and MySpace are concerned, the licensing landscape is in flux and will continue to change, as certain major licensors and performance rights societies enter into blanket licensing deals for the use of their own copyrighted content. However, a filmmaker would still need to acquire licenses from both publisher and master rights owner for the right to include a particular piece of music within their film, as well as for specific media rights such as streaming and/or viral campaigns on Internet sharing and social networking sites.
Regarding iTunes and other sites where films can be downloaded for a fee (per-download or subscription), you must make sure that the rights granted by licensors contain this type of media. This also applies to licenses for the streaming or selling of films through mobile phone content.
The good news about more flexible technology, the wide range of music available and the growing market for music to be placed in documentaries often outweighs the challenges of limited rights. In addition, there are so many musical options and solutions, such as licensing the composition only and having a cover version of the song made, hiring a composer to score original music to your specifications, using artists and bands not attached to major labels or publishers, or licensing tracks from music libraries that can be accessed online. In some new developments, certain popular artists have even made available some of the catalogues they control online that can be used gratis, with certain restrictions.
While many filmmakers may have expensive music licensing tastes because they understandably want to license “the soundtrack of their lives” (well-known, commercially released music licensed by the major labels and publishers), the more restrained your music budget is, the more creative and innovative you can be in finding rare and unknown music, undiscovered talent and unique approaches to your audio soundtrack. Be adaptive and flexible, stay open to alternatives as well as possibilities, and have an understanding of the realities and strategies of limited rights licensing as you choose to “lease or buy” music for your documentary masterpiece.
©2008 by David G. Powell for The Music Bridge LLC
(All rights in and to this article are expressly reserved by the author and may not be reproduced, copied, posted, downloaded, reprinted or published without express written permission)