Music Business - Copyright and Distribution Deals

After the completion of a musical composition, approaching a music label has its own challenges. Some of them include deciding upon exclusive or non-exclusive distribution deals, various copyrights for reproduction and distribution as well as license agreements for audio-video synchronization, manufacturing and performance should a party wish to use your production as part of their project.


TYPES OF COPYRIGHT


Public performance license

The exclusive right of the copyright owner, authorize the performance or transmission of the work in public

Public performance right

Licenses issued on behalf of the copyright owner granting the right to perform or transmit the work to the public

Reproduction right

The right to authorize the reproduction of a musical work as in record, CD or cassette

Mechanical license

Usually to a record label, the right to reproduce and distribute a specific composition at an agreed upon fee per unit manufactures and sold

Synchronization license

Usually to a producer, granting rights to synchronize the musical composition with audio-visual images, videotape or film

Transcription rights

The right to create a derivative, a re-arrangement, a new version such as environmental music for buildings/businesses

Digital performance right in sound recordings

Internet streaming services


These copyrights are very important to know as a music artist yourself as you will encounter negotiations for most of these.


There are 2 types of labels: major and independent labels. The biggest difference between independent labels and major labels such as Warner, Universal Music Group, Sony and BMG is that independent labels have to approach “distributors”, while major labels have their own distribution department. When approaching a label for distribution of your product, it is imperative to understand the exclusive and non-exclusive distribution deals to optimize revenue and exposure as an artist in the music industry.


The NON-EXCLUSIVE licensing agreement

- you are the licensor

- you give the licensee the right to offer your song to a third-party purchaser

- third parties can purchase the right to use your song

- the licensee pays you part of the fee received from the third party

- you MAY sign another non-exclusive agreement with another licensee to shop the same song around to a third-party purchaser


Pros

- not tied down to one company who may or may not find you licensing opportunities

- you can maximize small opportunities


Cons

- devaluing your reputation as a serious music composer; the emergence of hundreds of non-exclusive music libraries pitching a similar catalogue with seemingly random prices has led music supervisors to focus on music they can license exclusively


The EXCLUSIVE licensing agreement

- you are the licensor

- you give the licensee the right to offer your song to a third-party purchaser

- third parties can purchase the right to use your song

- the licensee pays you part of the fee received from the third party

- you MAY NOT sign with another licensee to shop the same song around to a third-party purchaser

note; pertaining to exclusive deals that cover a given set of songs, not to be confused with an exclusive deal for the composers entire existing and future catalogue. Do not sign one of these unless you get a HUGE advance


Pros

- music supervisors are more likely to consider it because they know they are getting the best deal

- you are more likely to get a fair price for the sync deal (sync rights?)

- financial advances


Cons

- risk of handing out your hard work to a company who doesn’t get you a single placement


How to get the best of both worlds;

Use a different alias to promote other music as to separate you from exclusive deal infringements and being able to earn more money. This does not mean the same song under a different title and pseudonym!


How to mitigate the risks of exclusive deals

- Research the company; how long have they been around? Are they currently a big player? What are the chances they’ll disappear in a few years? With your songs! Do they have a huge roster of composers or will they be more dedicated to few composers

- Limit the cost of making music; spend less time and improve workflow

- Test drive the exclusive deal; sign over 10-20 tunes and wait 6-12 months before making any further commitments

- Stay in touch with the contact; be in the fore front of their minds and able to jump on surprise opportunities


Final thoughts

- Exclusive deals should be a no no, unless you can negotiate an advance or are 100% confident your tunes will be placed

- With 60+ tunes, experiment with exclusive and non-exclusive deals. Research before accepting any exclusive deals and don’t hesitate to use a pseudonym if signing non-exclusive deals may harm your reputation as a serious composer

- With a small catalogue, stick to non exclusive deals unless you're confident you can grow your sing list quickly. When you have a large catalogue, you still have earning potential if an exclusive deal backfires

- Focus on growing your credit list if you already have credits along with a large catalogue. Nothing is stopping you from signing non-exclusive deals under a pseudonym in the meantime. Maybe more than one if you are prolific in many genres.


What to do right now?

- Determine credit list and catalogue size and fit yourself into one of the above categories

- Research music libraries that best suit your music and brand