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Friday, September 24, 2010

How to Find the Right Music Licensing Partner

There are thousands of synch licensing opportunities created by hundreds of buyers that are seeking independent music in the United States. Yearly, this is a billion dollar market that is rivaled by an additional billion dollars generated by international buyers. So who’s buying? Television and film remain the largest purchasers in the industry, but new niches such as interactive usages are also appearing as new forms of media/content emerge. 

Hey, That's My Music!: Music Supervision, Licensing and Content Acquisition (Hal Leonard Music Pro Guides) 
Although the number of placements available to independent labels has increased, the budgets have not. However, that isn’t necessarily a bad thing! Stricter budgets translate into a world of potential for independent labels to dominate a niche that once belonged exclusively to major labels. Also, A demand for better quality music and branded artists has created an opportunity for independent labels to capture business from the (cheap) production libraries. 

Many labels seek the perfect concoction of strategies to address the question of “How do I get more placements??”. There are a variety of tactics that you as a label owner or licensing representative can employ to capture a chunk of this two billion dollar market. The most common method is to use a third party to seek licenses on your behalf. There are many third party licensing firms, each with its own way of navigating the (sometimes) muddy waters of synch licensing. In order to find the partner that best accommodates your situation, take the time to assess what is crucial to your synch licensing strategy, assess which partner offers the greatest penetration in your target market segment, and which partner offers a suite of services that complement rather than impede your own efforts. 

Here are a few research tips to guide you during the decision-making process: 

-       Call: Try to get a human on the phone. Employees can reveal much more information than automated voice dialogs and email robots. During the contractual process, ask a representative to go over the agreement with you. Should you feel that the terms are not clear, be cautious of signing anything.
-       Protect Your Rights: Ask if the potential partner will re-title your copyrights and retain a portion of your royalties (this is important!!). Some partners will require that you grant them the right to re-register your music with a new title, under their publishing entity in exchange for placement opportunities. In most cases, revenue from royalties amounts to more than the original licensing fee – this is definitely an issue that you will want to address with every potential partner you research.
-       The Importance of Brand: If you’re concerned about branding and making sure that your music is in good company, ask for a list of the partner’s top artists. Partner’s with larger names often attract more buyers. Having branded artists also indicates that the partner has generated enough sales, buzz, and happy artists to retain those larger names.
-       Prove It: Ask for potential partners for a list of clients and placements from the last 3 months. This will indicate whether or not the partner is selling music in volumes that are meaningful to you! Since numbers (and placement reels) don’t lie, you should be especially suspicious of partners that cannot provide this information.

-       Strategize: Ask potential partners how they plan to get your music to interested buyers and not stuck in a massive dormant catalog. A good rule of thumb is the larger the catalog, the less you'll be heard. Because of this, labels often find that partners with smaller selective catalogs are more appealing than larger production libraries.

-       Where’s The Money?: Ask potential partners how you will be paid, and how often. Will they notify you of each placement and when you can expect to be paid?

-       Personalize Your Experience: If having someone that will update you personally and work with you on a one on one basis is important to you, factor this into your decision process. Larger pre-cleared libraries may not be able to provide such a personalized service because of the sheer volume of licenses they execute. Although they do not generate as many sales as libraries, smaller partners (like song-pluggers) work very closely with labels.

Whether you go with a song-plugger or a library, working with any third party service requires a great deal of trust and understanding between both parties. For example, your partner needs to know that the information you provide is 100% truthful (especially concerning rights clearances) and you need to be able to trust that your partner will not license your music for pennies. 
 This Business of Music, 10th Edition 

Moreover, understand that despite the size of the industry and opportunities available, you may not achieve your desired outcome immediately. Synch licensing can be a tedious, drawn-out process, so work with your partner to craft and re-tool your strategy frequently. Most important of all, be patient and keep the lines of communication open!

Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for over a decade. He manages , is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment,SMG Publishing and Taboo Dangerfield Publishing Follow me on twitter  

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