A WFA Webinar in partnership with Richard Kirstein from Resilient Music on the 10 things marketers need to know about Music Rights. Covering: risk avoidance, re-records, tenders and approval times.

1. Music Rights Webinar
29th November 2011
Music Rights For Marketing &
Procurement Executives
10 things you need to know
Presented by Richard Kirstein
Founding Partner, Resilient Music LLP

2. .… a bit about me
The Company She Keeps
Miro Soul To Squeeze

3. Quick Poll #1
What’s your role?
1. Brand Client Marketing Team
2. Brand Client Procurement Team
3. Brand Client Finance Team
4. Marketing Procurement Consultant
5. WFA Team Member
6. Other

4. Why know more about music rights?
• Information is power
• Knowledge empowers Advertisers to challenge established practices
• Greater understanding improves cost & risk management
• Procurement can help Marketing if engaged sufficiently early

5. 10 things you need to know
• Songs vs. Recordings • Out-of-copyright
• Types of licence & who to talk to • Risk avoidance
• Approval times • Competitive Tendering
• Re-records • Procurement Responsibility
• Cost-drivers • Benchmarking

6. 1. Songs vs. Recordings

7. Songs vs. Recordings
COLDPLAY

8. Songs vs. Recordings
Songwriters Recording Artist
COLDPLAY

9. Songs vs. Recordings
Songwriters Recording Artist
Songs / Compositions “Master” Sound Recordings
COLDPLAY

10. Songs vs. Recordings
Songwriters Recording Artist
Songs / Compositions “Master” Sound Recordings
Music Publisher Record Label
COLDPLAY

11. Songs vs. Recordings
Songwriters Recording Artist
Songs / Compositions “Master” Sound Recordings
Music Publisher Record Label
“Publishing” right “Master” right
COLDPLAY

12. Songs vs. Recordings
Songwriters Recording Artist
Songs / Compositions “Master” Sound Recordings
Music Publisher Record Label
“Publishing” right “Master” right
COLDPLAY

13. “The Scientist” – Original Artist Recording
Martin / Champion / Berryman / Buckland Coldplay
Song “Master” Sound Recording
Music Publisher Record Label
“Publishing” right “Master” right

14. “The Scientist” – Cover Version
Martin / Champion / Berryman / Buckland Natasha Bedingfield
Song “Master” Sound Recording
Music Publisher Record Label
“Publishing” right “Master” right

15. Songs vs. Recordings – Now
Key Rights Owners
Major Music Publishers Major Record Labels

16. Songs vs. Recordings – Future
Key Rights Owners
Major Music Publishers Major Record Labels
Subject to regulatory approval

17. Songs vs. Recordings
Key Rights Owners
Independent Music Publishers Independent Record Labels
IMAGEM BEGGARS GROUP
BMG RIGHTS DOMINO
MUSIC SALES PIAS
KOBALT MUTE
BUCKS MINISTRY OF SOUND
CARLIN WARP
BLUE MOUNTAIN PALM PICTURES
NOTTING HILL NINJA TUNE
MUTESONG COOKING VINYL
GLOBAL TALENT NETTWERK
NOTE: Some companies are Europe-based only, others also cover North America & Far East

18. TOP TIPS #1
• Be clear which title you wish to use
• Be clear if it’s an original artist recording or cover version
• Establish which rights owners have an interest in song & recording

19. 2. Types of Licence

20. Types of Licence
Why do you need a licence?
• Songs and recordings are someone else’s intellectual property
• To use them, you need a licence
• Usage without a licence is an infringement of copyright
• GET A LICENCE (before usage starts)

21. Types of Licence
Who do you talk to?
Songwriters Recording Artist
Music
Publisher
Music
Publisher
Mechanical Right Synchronisation
Digital Downloads Use of song in TVC / Video

22. Types of Licence
Who do you talk to?
Songwriters Recording Artist
Experiential
Performing at a live event
Performing Right #1
Broadcast & in-store
“transmission” of song
Performing Right #2
On-line & mobile
“transmission” of song
Music
Publisher
OR Music
Publisher
Mechanical Right Synchronisation
Digital Downloads Use of song in TVC / Video
PRS (UK-based) used as an example collection society

23. Types of Licence
Who do you talk to?
Songwriters Recording Artist
Record
Label
Performing Right #2
On-line & mobile
“transmission” of recording
Record Record
Label Label
Synchronisation Reproduction Right
Use of recording in TVC / Video Digital Downloads

24. Types of Licence
Who do you talk to?
Songwriters Recording Artist
Experiential Endorsement
Performing at a live event Brand Ambassador Role
Artist Artist
Manager Manager
Record
Label
Performing Right #2
On-line & mobile
“transmission” of recording
Record Record
Label Label
Synchronisation Reproduction Right
Use of recording in TVC / Video Digital Downloads

25. Types of Licence
Who do you talk to?
Songwriters Recording Artist
Experiential Endorsement
Performing at a live event Brand Ambassador Role
Artist Artist
Manager Manager
Performing Right #1
Broadcast & in-store
“transmission” of a recording
Record
Label
Performing Right #2
On-line & mobile
“transmission” of recording
Record Record
Label Label
Synchronisation Reproduction Right
Use of recording in TVC / Video Digital Downloads
PPL (UK-based) used as an example collection society

26. Types of Licence
Who do you talk to?
Songwriters Recording Artist
Experiential Experiential Endorsement
Performing at a live event Performing at a live event Brand Ambassador Role
Artist Artist
Manager Manager
Performing Right #1 Performing Right #1
Broadcast & in-store Broadcast & in-store
“transmission” of song “transmission” of a recording
Record
Label
Performing Right #2
Performing Right #2 On-line & mobile
On-line & mobile “transmission” of recording
“transmission” of song
Music
Publisher
OR Music Record
Record
Publisher Label Label
Mechanical Right Synchronisation Synchronisation Reproduction Right
Digital Downloads Use of song in TVC / Video Use of recording in TVC / Video Digital Downloads

27. Licence Exclusivity
• Relevant to all licence types EXCEPT performing right
• Limited by Term & Territory
• Can be limited by product category or across all brands
• Always attracts a premium fee

28. TOP TIPS #2
• Be clear which rights you need (determined by proposed usage)
• Be clear who controls those rights
• Bring all parties to the table from the outset
• Don’t approach artist management for synch rights for signed writers / artists

29. 3. Approval Times

30. 3. Approval Times
Why does it take so long?
Licence Request
UK Publisher US Publisher Manager Songwriter
Brand
(or agency)
UK Record Label US Record Label Manager Artist
US controlled repertoire
From 1-2 days to 1-2 weeks

31. 3. Approval Times
Why does it take so long?
Licence Request
UK Publisher US Publisher Manager Songwriter
Brand
(or agency)
UK Record Label US Record Label Manager Artist
US controlled repertoire
From 1-2 days to 1-2 weeks
Granting Approval (or Denial!)
Songwriter Manager US Publisher UK Publisher
Brand
(or agency)
Artist Manager US Record Label UK Record Label
US controlled repertoire
From 3-5 days to 2-3 months

32. TOP TIPS #3
• Start as early as possible
• Always have back-up tracks
• “No” (usually) does mean “No” – Be prepare for denial of licence
• Accept that not everyone loves your brand as much as you do

33. Quick Poll #2
How many music rights negotiations have you
previously been involved in?
1. None
2. 1 - 5
3. 6 - 10
4. Over 10

34. 4. Re-records

35. 4. Re-records
Martin / Champion / Berryman / Buckland Arranger / Producer
Song : “The Scientist” Engaged Services
Music Publisher Re-recording
“Publishing” right Assigned or Licensed
Brand (or Agency)

36. Re-records : The Facts
Taking an existing published song
Re-record and re-recording it specifically for
the campaign
The publishing rights (in the song)
Publishing DO have to be cleared with the
appropriate publisher(s)
The master rights (in the original
Master sound recording) DO NOT have to
be cleared with the record label

37. TOP TIPS #4
Changing the LYRICS always
Parody requires more complex approval &
usually a higher fee
Directly copying the original
“Passing Off” recording may risk a “Passing Off”
claim from the artist or their label
Change singer gender, key,
Risk Reduction instrumentation for a noticeable
difference

38. 5. Cost-drivers

39. 5. Cost-drivers
Channel vs. Context B2C vs. B2B
Usage Term, Territory, Media
Stature Song vs. Artist
Rights Owner Major vs. Independent
Timings Urgent vs. Not Urgent
Competitive Environment Single choice vs. options
Extending Licence Terms Options included or not

40. Channel vs. Context
High
Licence Fees
Low
Overt
Subtle Branding

41. Usage Broadcast / ATL
High
World
On-line
Experiential
Licence Fees
In-store
Internal
UK Term
1 Yr 2 Yrs
Low
High
Low Usage

42. Stature
High
Licence Fees
Low
High
Low Fame

43. Rights Owners
High
Licence Fees
Low
High
Low Fame

44. Timings
High
Licence Fees
Low
High
Low Urgency

45. Competitive Environment
High
Licence Fees
Low
High
Low No. of track options on the table

46. Fees to extend licence terms
High
Licence Fees
NOT
Included in
Original
Licence
Included in
Original
Licence
Low
Inclusion of Pre-negotiated Options

47. TOP TIPS #5
• Only buy the “must-have” usage you need now
• Include options for all “nice-to-have” usage within the licence
• Include options to extend the term into a 2nd & 3rd period (usually @ 10%)
• Always have back-up tracks
• Be very aware of balance of power between licensee & licensor

48. 6. Out-of-Copyright

49. How long does copyright last?
Songs Recordings
Publishing Rights – EU Law Master Rights – EU Law
Copyright in the song / composition Copyright in the sound recording
Remains “in copyright” for 70 years Remains “in copyright” for 70 years
from the death of (youngest) from date of first commercial
composer / songwriter release
Outside Europe, laws vary, notably USA.

50. “The Scientist” – Original Artist Recording
Martin / Champion / Berryman / Buckland Coldplay
Song “Master” Sound Recording
First registered 2002 First released 2005
Assume last writer dies aged 85 Copyright expires end 2075
(in 2063)
Copyright expires end 2133

51. So, what is out-of-copyright (in the EU)?
Songs Recordings
Any song or composition whose last Any sound recording commercially
surviving writer/author died in 1940 released in 1940 or earlier.
or earlier.
Elgar d. 1934 Wagner d. 1883
Benny Goodman Septet
“Ad Lib Blues”
Recorded: NYC October 28, 1940
Includes : Original 78rpm discs
Excludes : remastered CDs
Beethoven d. 1827 J.S.Bach d. 1750

52. TOP TIPS #6
• If it’s in Copyright – you need a licence
• Copyright Term varies between songs and recordings
• Copyright Term varies between territories
• For internet usage, you must abide by US law
• Don’t make assumptions without proper due diligence

53. 7. Risk Avoidance

54. TOP TIPS #7
• No sound-a-likes
• No intent to infringe
• No minor changes (6 note myth)
• Identify all interested parties
• Myth re attempted search
• Escrow accounts

55. 8. Competitive Tendering

56. Competitive Environment
High
Licence Fees
Low
High
Low No. of track options on the table

57. STAGE #1 : SOURCING TRACKS
Creative Requirement Business Requirement
Emotional Objective Budget & Usage
Music Brief Commercial Terms Brief
Music Sourcing Tender
Music Rights Owners
Track Submissions
Track Shortlist
Hero Tracks & Back-ups

58. STAGE #2 : PURCHASING TRACKS
Simultaneous Shortlist Research
Negotiate from Position of Strength
Secure Multiple Approvals
Final Choice
Optimal Outcome

59. TOP TIPS #8
•Start early •Start late
•Collate all usage data up-front •Have incomplete usage data
•Clarify optional usage •Have no option data
•Clarify deadlines •Have fluid deadlines
•Don’t move the goalposts! •Have fluid parameters
•Have back-up tracks •Track is a must-have

60. 9. Procurement Responsibility

61. Who handles music procurement for your agency?
In-house TV Producer
“Sister” company supplier
Independent supplier

62. Who handles music procurement for your agency?
• How are they charged?
• Hour/Day rate or flat fee?
• Is this the default agency choice?
• Are they proven as “best in class”?
• Remunerated by flat fee or commission?
• Truly independent or preferred supplier?
• Sourced by competitive tendering?
• Remunerated by flat fee of commission?

63. TOP TIPS #9
• Challenge agency on default supplier choice
• Insist on competitive tendering to source supplier
• Avoid remuneration by commission (conflict)
• Incentivise supplier to broker the best deal

64. 10. Benchmarking

65. Are you benchmarking your music procurement?
• Post-project auditing
• Assessment of fees paid to rights owners
• Matching invoices to POs
• Assessment of fully executed contracts
• Visibility by client-side Legal prior to signature

66. TOP TIPS #10
• Challenge agency on full accountability
• Insist on proper due diligence
• Spot-check contracts for full execution
• Spot-check invoice & PO matching
• Insist on removal of agency mark-up on any costs
• Share anonymous data with peers

67. RECAP: 10 things you need to know
• Songs vs. Recordings • Out-of-copyright
• Types of licence & who to talk to • Risk avoidance
• Approval times • Competitive Tendering
• Re-records • Procurement Responsibility
• Cost-drivers • Benchmarking

68. Thank You
richard@resilientmusic.com
+44 (0)7976 2022705
+44 (0)20 3137 0324
richardkirstein
www.resilientmusic.com
@resilientmusic
www.linkedin.com/in/richardkirstein