Michael Easton Legal | Media Lawyer | Entertainment Lawyer

Clearing and Commissioning Music For Film and TV

Introduction
The purpose of this paper is to provide an overview of legal and contractual issues involved in clearing and commissioning music for use in film, television and other audio-visual productions. The transactions and agreements a practitioner is likely to encounter in this area will be reviewed, with a focus on commercial terms and industry standards.

For simplicity this paper will refer to ‘films’ – however the issues discussed are relevant to any audio-visual production: television program, video game, YouTube video or webisode, advertisement etc.

Broadly speaking, a producer has three choices in sourcing music for a film:

Production Music;
Released Music; or
Commissioned Music.

Production music is music treated as a commodity – a vast range of tracks, simple, cheap and easy to use, purchased by length.

Released music sees the producer taking advantage of the history of existing recorded and published music, allowing them to build on existing emotional connections an audience may have to a piece of music, or to set a historical and/or cultural context for their film.

Commissioned music extends the creative process of film-making to the composition of new music and allows the producer to tailor the score, exclusively, to custom fit the film. Commissioned music includes theme songs and featured music, as well as incidental underscore.

Of course, most films use a mixture of these sources, depending upon type of project, the available budget and the preferences of the producer and/or director.

Acting in this area, a practitioner may also need to deal with:

engagement of, and liaison with, a music supervisor, who assumes the responsibility for selecting and proposing music to the producer based on a brief, and negotiating commercial terms with the relevant rights holders;
engaging performers;
the release and commercial distribution of a soundtrack album; and
APRA, AMCOS and other copyright collecting societies.

Regarding copyright, the core subject matter of these agreements, it is necessary to keep in mind the distinction between:

Publishing and master rights are commonly held by separate parties, treated separately in the contracting process and subject to different terms. The term ‘music’ will be used in this paper to refer to both musical works and sound recordings, except where specifically noted otherwise.

Using music in a film involves exercising a number of the different rights which make up copyright, all of which must be licensed from the relevant rights holder:

adaptation right: arranging, re-recording, editing or manipulating the music to fit the film;
reproduction (‘synchronisation’) right: copying or ‘dubbing’ the music into the soundtrack of the film; and
communication (‘performing’) right: broadcast or transmission of the music by means of the film, and exhibition of the film (theatrical or otherwise).

Clearances may also need to be obtained for other uses of music in film – for example, characters singing excerpts of songs or quoting lyrics in dialogue, or use of a song title in a film title.

Producers may wish to reduce costs by using music that is in the ‘public domain’, for which copyright has expired. Companies such as Naxos are known for offering high quality recordings (by Eastern European orchestras) of classic music for use in films. However care must always be exercised in this regard as the duration of copyright in musical works extends for 70 years from the end of the year in which the composer died. Even where the term of copyright has expired, the producer may be using a newer arrangement which is still protected. Third party distributors, broadcasters and ‘errors and omissions’ insurers may also be uncomfortable at relying on music being in the public domain unless the situation is beyond doubt.

Production Music
Production music is specifically produced for use in films. Tracks are arranged in categories such as mood, genre and instrumentation, and are made available online for producers to browse and select. A number of Australian production music libraries licence their catalogue through AMCOS under a standard rate card, other providers deal with producers directly.

Fees are modest and the licensing process is generally simple and straightforward, with one licence covering publishing and master rights. Lawyers are rarely involved, except to review and certify licences in connection with the provision of chain-of-title opinions.

Released Music
Film synchronisation has always been a crucial revenue stream for the music industry, and its importance to the sector has increased significantly with the collapse of record sales revenue over recent years.

Once the producer has determined the relevant rights holder (either from consulting credits, or making use of the research service provided by AMCOS), the process typically involves contacting the publisher or record label’s licensing department, explaining the proposed use, negotiating a rate, and executing an agreement in the form provided by the licensor.

Fees vary widely depending on the value of the music the producer wishes to use, and the scope to negotiate terms is often limited.

Another relevant trend is the rise of independent artists who release their own recordings. Such artists often retain both master and publishing rights, and are in a position to licence both directly to the producer, sometimes on terms presented by the producer.

It is important to ensure that sufficient time is allowed for the securing of synchronisation licences for Released Music. Even where the publisher or record label is keen to finalise the licence and collect the fee, it is common for artists and writers to have the right to approve such uses, and it can sometimes take time for this approval to be secured. If the producer wishes to use an old or obscure track, it can take time for the appropriate rights holder to be located. And the producer must provide for time to change music selections if the appropriate fee and terms cannot be negotiated.

Some issues to consider when reviewing or drafting synchronisation licences for Released Music are:

Scope of rights: In order to avoid any constraint on the producer’s ability to exploit the film, the starting point should always be to secure a licence for the world, for the duration of copyright, and for ‘All Media’. Where available budgets are limited the use of options as and when required in the future may be discussed.
Formats: A licence for ‘All Media’ should include:

Theatrical (cinema);
Non-theatrical (exhibition to non-paying customers, for example schools, hospitals);
Free-to-air and subscription television;
Home use (DVDs, Blu-ray and other formats)
Online (downloads and streaming)
Mobile devices; and
Transport.

Trailers: When using music in trailers and promotions for the film, licences often distinguish between ‘in-context’ uses (music featured in the same context as it is embodied in the film) and ‘out-of-context’ uses (music featured more prominently, outside its context in the film, or even if it not used at all in the film) with the latter use often significantly more expensive.
‘Most Favoured Nations’: Typically for a piece of music, the fee for the publishing rights will be on a ‘most favoured nation’ basis with the fee for the master rights and vice versa. That is, if a higher fee is negotiated for the other right, their fee must be increased too. Some rights-holders will seek ‘most favoured nations’ rights across the entire soundtrack, but this should generally be resisted.
Co-writes: Musical works may be written by more than one composer, and each composer may be represented by a different publisher. In this situation two or more agreements may be required for the one musical work and ‘most favoured nations’ provisions may apply. Obviously, care must be taken to ensure that the ownership percentages total 100%.
Performing Right: The performing right is usually excluded from these licences on the basis that the broadcaster or exhibitor of the film will have secured the relevant licences from APRA and PPCA.
Restrictions: Licensors commonly apply restrictions on the following types of uses:

parodies, lyric changes or substantial adaptation of a work (noting that where such changes are agreed to, the Licensor will typically insist on owning copyright in the new version);
use of title or lyrics of the music as the title of the film;
using the plot of lyrics in the film; and
releasing the music in an audio-only format, or a format which allows a person to access the music other than in the context of the film (see discussion of soundtrack albums below);
music videos, where the primary purpose is to promote the performer of the song in the film (this can cause complications in talent shows and other live performance contexts;
‘sound-alike’ versions which attempt to recreate the original master version of the music (and thus avoid payment of a master fee).

Liability: While labels and publishers generally provide warranties as to ownership, liability is typically limited to the amount of the licence fee payable.
Mechanical royalties: Producers can, and should, avoid agreeing to pay mechanicals or reproduction royalties in connection with the production of DVDs and sale of downloads.

Commissioned Music
While producers may occasionally engage a well-known artist to write a song or theme for a film, screen composers are usually specialists with expertise in the artistic and technical demands of film production. If a composer is represented by a publisher, or signed to a record label, these may need to be parties to the agreement.

When contracting with screen composers, as well as securing the necessary rights, it is important to clearly state the services the composer is expected to provide, with a particular emphasis on delivery dates.

Over recent years, terms have shifted in favour of producers, who have generally acquired more rights in the music obtained under commissioning agreements, without a commensurate increase in fees paid. Previously, use of commissioned music was usually limited to the production for which it was commissioned, now producers typically seek the right to use the music for any production they may produce.

Previously, the composer was usually entitled to retain all of their performing right income paid by APRA. This can be especially lucrative for a popular and long-running programs. However, it has now become common for production companies to register as ‘publishers’ with APRA for the purpose of claiming 50% of such royalties.

Issues which may need to be considered in commissioning agreements include:

Brief: A clear statement of the music the composer is expected to provide, whether theme music, underscore or incidental, and durations (typically the duration of the film).
Scope of Rights: Copyright in the master is typically assigned to the producer. Copyright in musical works may be assigned to the producer, or may retained by the composer who grants the producer an exclusive licence to use the work in the film. As noted above, assignment is becoming the standard. In both cases, the performing right administered by APRA is excluded. A moral rights consent is usually included.
Fees: Rights are usually purchased as a ‘buy-out’, except that the composer may be entitled to additional payments or royalties if music is re-used in sequels or other productions or if a sound-track album is released.
Duties: The composer is usually paid a budget to cover all aspects of composing, recording, producing and incorporating the music into the film. This would include participating in production meetings, and hiring of all equipment and the engagement of any performers. The composer may be required to participate in the editing, mixing and dubbing of the music into the film.
Credits: Composer’s entitlement to credit should be specified, as well as the producer’s right to use the composers name and likeness in connection with the promotion of the film.
Schedules: As well as setting delivery dates, the agreement must specify a date on which ‘final cut’ of the film will be delivered to the composer for their reference.
Deliverables: The composer is usually required to deliver the following to the producer:

copy of master recording in a mutually agreed format, typically a hard drive or online;
a cue sheet setting out details and timings of the music as embodied in the film; and
a deed confirming that rights in the music have been assigned to the producer; and
releases from any third party performers.

Music Supervisors
With higher budget productions, you are likely to find yourself working in conjunction with a music supervisor engaged by the producer. An experienced music supervisor should bring an encyclopedic knowledge of all types of music, knowledge of prevailing rates and conditions, and widespread connections with publishers, record labels and other rightsholders. Services to be provided by a music supervisor might include:

research, sourcing and recommending music;
provision of production music;
advice to the Producer on availability and costs of licensing released music, based in their experience in the market;
liaison and negotiation with publishers, labels and screen composers;
oversee recording of commissioned music
process licensing requests, ensure payment of fees;
delivery to the producer of fully executed synchronisation licences and other relevant agreements.

In contracting a music supervisor it is important for the producer to provide a clear brief, including a statement as to the minimum scope of rights required for each piece of music obtained.

A maximum music budget will be specified, together with the fee payable to the supervisor for their services. The music supervisor will arrange for licensors to contract directly with the producer, and to issue their invoices to the producer.

Performers
Where session musicians or other performers are engaged, it is essential that they sign a release in favour of the producer. This should include:

Assignment of all rights (including copyright) arising out of their services to the producer, and release of any further entitlement or claim;
Moral rights consent;
Warranties and indemnities as to rights in their performances;
Credit provisions; and
Consent to producer assigning rights at its discretion.

Soundtrack Albums
While some soundtrack albums have been lucrative in the past, currently they do not appear to be a commercial priority in the Australian film and television industry. Where the subject does arise, there are a number of matters that may need to be considered.

When engaging a screen composer or performer, if the producer seeks the right to release a soundtrack album featuring their performances, it is likely that the agreement will need to include album royalty provisions. A royalty is usually set as a percentage of PPD (Price Published to Distributor / wholesale price), then pro-rated according to the number of their performance in proportion to total tracks. If acting for the performer, it is important to ensure that only ‘royalty bearing’ tracks are counted for this purpose (not, for example, excerpts of dialogue). A most favoured nations provision may also be sought.

Some soundtrack albums are essentially compilation albums featuring released music that was embodied in (or in some cases ‘inspired by’) the film. Where a third party record label proposes to release such a compilation album, they may undertake to licence and bear the cost of the released music included on the compilation, and pay the producer a royalty override for the use of the title of the film and associated artwork. Further royalties might be payable if the label uses any masters owned by the producer.

Mechanical royalties are likely to be payable according to the industry standard terms set and administered by AMCOS.

Live Performances – Concert and Festivals
Special considerations are likely to apply where a producer wishes to film a live music performance, such as a concert, music festival or television talent show. Producers may overlook the fact that the incorporation of music with such footage represents a synchronisation for which licences must be secured, in addition to consents from all performers.

Record labels, in particular, tend to be more reticent in granting licences where the music is featured in the footage rather than playing a supporting role, on the basis that such films could compete with their own product, and/or be inconsistent with the image of the performer they are promoting, or of inferior quality. Artists who have signed a deal for their exclusive recording services may require label approval. In these situations licences tend to be granted for broadcast only.

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Clearing and Commissioning Music For Film and TV

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