Neighbouring rights: The growth engine of the music industry

(This story was initially published in Music Week)

By Emmanuel Legrand

If you work in the music industry, try running the following simple test. Ask around you the question, "What are neighbouring rights?", and most likely the answer will be, "Neighbours what?", except for those who work directly in this specific field of the music business. But behind this unawareness hides one of the fastest growing segments of the music industry, and one without which neither performers, nor labels would be able to survive in today's digital environment.

Simply put, neighbouring rights, also known as related rights, are the rights attached to sound recordings (as opposed to those attached to compositions, or authors' rights, benefiting songwriters and publishers), whose beneficiaries are the performers and producers (from a financial perspective) of the works. Compared to authors' rights, these are relatively new rights as they have only been around for some 60 years, but have really taken off in the 1980s, mostly in Europe.

Today, the global market for neighbouring rights represents about €2 billion (£1.43bn), according to a recent study published by French society Adami (see below). It is also a highly concentrated market with close to 50% of all collections taking place in Europe, and about 30% in the USA. The top 10 markets account for 82% of the overall collections.

"This is a market that has been growing in a number of territories where these rights already exist," says Peter Leathem, CEO of the UK's rights society PPL. "In these countries, societies are also doing a better job at monetising those rights. That's going to continue. The whole area of neighbouring rights is looking very encouraging."

In the UK, revenues from neighbouring rights have been growing consistently throughout the past 15 years. At its recent AGM early June, PPL disclosed that overall collections and distributable income reached an all-time high of £187.1m and £161.2m respectively, both up 6% over the previous year. "In the UK, the market has grown considerably in last few years," confirms Leathem. "There has been a significant amount of money collected and passed back to performers and labels, when at the same time revenues were not growing elsewhere. Over the recent years, the importance of neighbouring rights has been increasing and that will continue. In the UK, we have potential to grow and we are gearing ourselves up for this."

Alongside societies like PPL and the dozens sister societies existing around the world, there is now a growing number of companies involved in the collection and distribution of neighbouring rights. With the business growing, and a larger pot available, competition has increased to a point that some believe that there might a saturation soon, with margins dropping and making the businesses less sustainable. "A €2bn euro market should be able to support a few players," says Andrew Gummer, the , the President of the Music Division of independent global music, film and TV rights company Fintage House.

Indeed, the rise and rise of neighbouring rights as a source of revenues for performers and labels has attracted a wide range of companies collecting on behalf of rights holders. Some companies have been established for a while, such as Fintage or Premier Muzik International, others are relatively new like Irving Azoff's Global Music Rights, leading music publisher Sony/ATV or Kobalt. "For someone like me with a background in labels and publishing, it is a fascinating market," says Gummer. "It is fascinating because it is growing when not much else seems to be. And because it is growing, there is more competition from other agents and collections societies, so that in order to grow, more people want to collect internationally on behalf of national artists."

With offices in the Netherlands and the UK, Fintage is an established firm in the sector active as a music publisher, master rights licensee and rights management company. Gummer says, "Our strength is that we can provide a large range of services so that people can chose. We always look at what the market needs so that we can start supply the market. We have fluidity, which is the mark of a small company and I like the idea that we can offer combined services. We are also becoming increasingly creatively involved with writers and performers so that we can offer something more."

Meanwhile, rights management and service company Kobalt, with operations in London and New York, has expanded its footprint in rights collection and rights management from authors rights and publishing rights to the neighbouring rights sector, applying the same level of data sophistication and expedited payments. "Neighbouring rights is a good to place to be in at the moment," says London-based Ann Tausis, Managing Director of Kobalt Neighbouring Rights. "People are much more aware that neighbouring rights exist and this is a very good thing. As other income sources are going down, performers and labels look at its as a new revenue stream."

In over two years, KNR has secured deals with such artists as Bruno Mars, Sam Smith, Calvin Harris, Björn Ulvaeus (of ABBA), Roxette, Nero, American Authors, Christina Perri and Hurts, among others. Tausis says KNR had to build a specific pitch to attract these artists as they were a young company with initially a competence in publishing and expanding into neighbouring rights. KNR benefits from Kobalt's expertise in data management, which allows to pay on a monthly basis and provide clients with a dashboard reflecting the use of works around the world.

"We had to go out and tell people that we existed, that we have a portal, that we are transparent, that we go direct to societies,' says Tausis. "For us it's been a lot of happy clients talking to friends and the list of clients coming to us has increased."

Some players in the field are even more recent entrants than Kobalt, like Sony/ATV, which set up a year ago a neighbouring rights division. "Our approach for the first year was to keep it quiet," explains London-based George Powell, a former PPL executive who moved to Sony/ATV over a year ago to set up a neighbouring rights shop within the music publishing company. Clients signed to the service include Snoop Dog, Mark Ronson, Pharrell Williams, Nile Rodgers, the estate of Lou Reed, Robin Thicke or Clean Bandit.

. "We are quite selective on who we work with," says Powell. "Some agencies who do this work have in excess of a thousands clients. If you want to do the job correctly you'd need a team of a hundred. We try to keep our client numbers lower and keep a high level of service."

Adds Powell, "The whole point of having low numbers [of clients] is that I can liaise with managers or lawyers and be on hands directly. We are offering more personal services, and we have someone with society experience to back them up. And in addition, we are 100% transparent."

Powell adds that the first thing he's done was to "naturally approach clients that Sony/ATV published and with whom we already had relationship," but it is not exclusive. "It can be anyone at all," he adds. However, Sony/ATV does not at this stage collect on behalf of labels. "This is something that we could do but we do not wish to," says Powell. "I know how to do the work but I have more expertise on performers."

The focus on performers is also the forte of established company Premier Muzik International, which has been in the business for over 15 years. With over 1500 entities as clients (performers, labels and publishers), Premier Muzik is one of the leading agents dealing with international rights collections, in partnership with Paris-based All Right Music, launched in 2004 by Christophe Piot. PMI's founder Olivieri says his company focuses more on the performer's side of neighbouring rights than the label side, which is outsource to Global Master Rights. "The master side is a bit more labour intense, and do not have the manpower to dedicate to this task," he explains.

For Olivieri, the existence of companies like his, active in the rights collection business, can be explained by the need from clients -- labels or performers -- to ensure that they are properly receiving their royalties,which can sometimes be a challenge if left only to the collecting societies. "I have to say that one of the biggest resistance is coming from societies that are looking at agents as a bunch of crooks," he says. "But we did not get this big by bullshitting performers. We provide transparency. Yes, we've seen agents sending cheques without itemisation. Do they think people are stupid? It is important that statements are as clear as possible. Clarity is probably the most important thing, but communication between societies could be improved."

Some other structures are providing a boutique service like Double Six Rights, an offshoot from UK's indie label Domino. Henry Thomas, the London-based neighbouring rights manager at Double Six Rights, says he brings an indies' ethos when he works with labels and performers. "We look after labels and performers and are quite tapped into the indie community as Domino has good relationship with many other labels," explains Thomas, who adds that Domino has a controlling stake in Rights Retriever in The Netherlands which specialises in rights management. "Together we have a bit more experience, knowledge, clout and reach."

Thomas says that the service is first offered to artists signed to Domino, but it is up to the artists to chose to do it, a choice made by the Arctic Monkeys for example. "It's a separate service that is offered," he says. "But most of Domino's signings have elected to sign with Double Six." The company takes a percentage of the sums collected to cover admin costs and redistributes the rest to the rights holders. "We only get paid if our clients get paid," he says.

Thomas is also very much aware of the level of competition in the market. "We are never going to be competing with the like of Kobalt because they have so much money, staff and technology," he says. "We target the middle tier of artists and try to serve that sector better. From my perspective, we are stakeholders in the world of neighbouring rights, and I am also looking to supporting societies and try to help the development of the whole sector."

Ag the other side of the spectrum, a company like Believe Group, which operates a digital distribution network in 32 territories, focuses on labels' rights. "We are not involved in artist collection," says Lee Morrison, General Manager UK, and SVP Rights Management, at Believe Group. "There seems to be a huge amount of competition for artist collection." He adds, "Believe is in 32 territories so it is important for us to track [royalties] in all countries. But from a business standpoint we focus on the top 10-15 [markets], because that's where the money is."

The most important part of the business, says Morrison, is ensuring that the repertoire of its clients is properly registered with the societies with the appropriate data. "From a producers standpoint, the learning curve is that they need to have proper data and make sure works are registered correctly," says Morrison. "I have a team that checks every single registration. We make sure the repertoire we represent is clean. It is all about data and having that nailed. We teach our producers a lot about what right they have. Many people do not understand the rights: educating is important since it is a huge part of their income. Even in the UK, people think that once they have registered with PPL that's it, but there is so much more going on out there. That's part of the education."

London-based Scott Cohen, co-founder of digital distribution company The Orchard, agrees with Morrison on the importance of data and timely payments. Although the neighbouring rights service is available only to clients of the Orchard, Cohen says it has been fully integrated into other aspect of the organisation. "A big part of what we are trying to do is to take the data that comes with neighbouring rights and integrate that with other data from marketing and sales," says Cohen. "We can we plug that data into our analytics platform, and provide a dashboard that shows close to real time the activity."

This holistic use of data allows The Orchard to bring value added to the data. As Cohen says, collecting neighbouring rights is no longer simply about "sending a cheque to rights owners every quarter and people are happy to get it. Now it's more about 'let's see how we can map that'. What is happening with your Spotify streams, your sales, your iTunes sales, your Facebook promotion, your Twitter campaigns and let's see how we can use the data to understand what is driving the market."

The various agencies and companies involved in neighbouring rights collections surveyed for this spotlight all agree that the biggest issue with neighbouring rights is the quality of the data and the flow of data. "We are great believers in data of course and if we get data right in one place, it will be right in other places," says KNR Tausis. "The business is still reliant on the record companies because that's where the info comes from, and up until now the labels did not have have a good attention to the data. If the line up is not complete or accurate, it does not affect the bottom line of the label but it can seriously affect other rights holders. At Kobalt, we interrogate that data and try to find the income that is missing."

Premier Muzik's Olivieri says that the "real big problem is the communication of data between societies. If we had a common platform it would be better for everybody because royalties would flow better. We need a centralised database but I assume that not everybody would want it."

"As a global industry the music industry is a long way from having good metadata," echoes the Orchard's Cohen. "There is still a long way to go to get the titles, the performers, the labels right. The data is still not cleaned up and this will take some time."

The heart of the business, says Olivieri, is to ensure that data pertaining to the creative works is correct and then that all the uses of music are accounted for and paid to the appropriate rights owners. Says Olivieri, "Our data is based on our clients and we are ready to provide it to societies for free if they want it. If everybody has same platform all money will flow quicker. This could be a tool that they could use with their own tools."

For Fintage's Gummer, the neighbouring rights societies' system "feels hopelessly out of date" and would benefit greatly from huge improvements. He explains, "PPL has modernised very effectively and SoundExchange came from a standing start with record performance. Both are very progressive and both have a huge advantage in that they are dealing with English-speaking repertoire that travels better than any other. But there are societies that are still absolutely terrible in how they see the world, how they deal with claims and follow-up claims. CMOs are not changing fast enough. Yes, we need to modernise the system so that it becomes a really modern businesses. I have never seen a business in this Century with so much paper..."

PPL's Leathem admits that there is two major issues that societies like his need to tackle -- establishing a global reliable database and improve communication between societies. As he said during PPL's AGM in June, "managing sound recording data and the related IT technology is not easy and is an area where it makes absolute sense to collaborate and for CMOs to move away from all building their own solutions at varying costs and with varying degrees of success and sophistication."

Leathem says that PPL is now in a position to license some of its back office tools, especially its IT systems and its sound recording data solutions. He considers that there is much to gain in time and efficiency in passing on these technologies to other collective management organisations (CMOs). In addition, PPL, alongside a group of over 30 CMOs representing performers -- including SoundExchange in the USA, VPL in Germany, Adami in France, among others -- and under the aegis of trade body SCAPR, are working on developing new IT systems and new ways to exchange data between themselves.

At the moment, all the players active in the field complain that there are too many different reporting systems and databases that do not talk to each other. The main project between these CMOs is called VRDB2, which stands for Virtual Recording Database, and is about developing a more inclusive approach to data and to the exchange of data.

"We are involved overseas in a range of projects to see how can do things together better," says Leathem. "We all have different ways of working and, moving forward, we need to streamline our operations and we need to better standardise things. VRDB2 will help CMOs move data faster and better."

For The Orchard's Cohen, this is long overdue. "Some of the reporting from PROs could be brought to the 21st Century," he claims. "The lag in reporting is tremendous. There is no reason we should not get close to real tine reporting especially with radio. The technology exists so why do we have to wait? I guess it must make [societies] feel uncomfortable."

The data issue is crucial as the market keeps growing with the arrival of new countries which are as many potential sources of revenues for international and local repertoire. A society like PPL, not content by being the second largest society in the world in revenues collected, after SoundExchange in the US, has become the world's leading society for international collections on behalf of record companies and performers.

International collections have played a crucial role in providing PPL and its members with on going growth over the past few years. In 2014, they represented 20% of PPL's overall revenues at £36.4 million, up 6% over the previous years, a growth fuelled by better collections systems and also an increasing number of reciprocal agreements with sister societies -- 75 in total.

The international market had been recognised a few years ago by PPL's outgoing chairman Fran Nevrkla as a major driver for growth and his successor Peter Leathem believes that one of the ways to pave the way for a better flow of royalties is to be very active on the international scene and playing a major role in helping other societies develop best practices and tools to increase the efficiency of the collections and the circulation of these royalties to their legitimate rights owners around the world.

The neighbouring rights market is highly concentrated, with 15 countries delivering the bulk of the revenues (see sidebar). Europe, as the birthplace for these rights, is by far the biggest region, with 50% of the collections, but North America is catching up fast. "There's revenues now that did not exist ten years ago, especially in the US where these rights did not even exist," enthuses The Orchard's Cohen. "That said, in the US it would be great if there were applied to terrestrial radio as well."

Adds Leathem: "Clearly the US is the biggest generator of revenues for neighbouring rights, with the development of internet radio and that's going to continue. The UK is one of the biggest collectors. But beyond that, if we look at the Far East, there are now rights societies created in large countries like Indonesia, Singapore and South Korea, and Malaysia has already decent collections. There is got to be potential across the markets."

For Premier Muzik's Olivieri, the main territories that deliver the highest revenues are the US, UK, France, Spain, South America, the Netherlands. "Italy has just come back in the pile, and I am happy about that," says Olivieri, noting that some Eastern Europe countries "are also starting to pay neighbouring rights."

Believe's Morrison looks with interest at some emerging markets showing potential such as Mexico where a brand new society is starting to collect rights. "They sued a major radio station that did not want to pay, and then fell into line," says Morrison. "In emerging territories, music not valued as well as in Europe. And there is a lot of pressure to not have legislation."

Sony/ATV's Powell also notes with interest that new territories coming into the club. "More and more countries are paying out," he notes. "In Russia and Brazil, there were just nickels and dimes and there's a bit more of a buzz lately." But the region with real growth potential is Asia, especially China and India, were nothing is collected at the moment. "More Asian territories have to come in line," says Olivieri. "There are huge populations in these countries and rates for music are pretty low."

For Kobalt's Tausis, the Far East is enjoying a rapid development of its rights market, but it will take some time to materialise in deeds. "At the moment, there is not really much in place, compared to publishing rights," she says, "but when everything will be in place, it could be quite lucrative."

[Sidebar 1]

 A two billion euros global market

The global market for neighbouring rights was worth slightly over two billion euros for 2013 (€2.034 billion), according to a report unveiled at Midem byFrench neighbouring rights society for performers Adami. The actual figure is probably slightly superior due to the lack of data on a certain number of countries, according to the writers of the report, former SoundExchange CEO John Simson and Music Week US editor Emmanuel Legrand.

The report covers all the countries where neighbouring rights are in existence, and encompassing all repertoires (music, audio-visual) and all types of rights owners (performing artists, musicians, producers of recordings, and artists from the audio-visual sector).

The key finding of the studies are the following:
> Regionally, Europe is the main market for neighbouring rights with close to half of all the revenues collected in the world (48.33%), followed by North America (30.40%), South America (12%), Australasia (8.59%), the Middle East (0.45%) and Africa (0.23%).
> With 28% of all collections, the USA is the largest market for neighbouring rights even if the rights are limited to digital non-interactive platforms such as Pandora, satellite services (Sirius/XM) or simulcasts of existing radio signals (iHeart Radio).
> The global neighbouring rights business is concentrated in 10 main countries that account for 82% of all collections. After the USA, the nine other key markets are: the UK (12%), France (11%), Japan (7%), Brazil (7%), Germany (7%), Argentina (3%), the Netherlands (3%), Canada (2%) and Norway (2%).
> Aside from the top 10 markets, the rest of the world accounts for 18% of all collections, with European countries accounting for 80% of this amount.

There are also signs that the market will extend rapidly to new markets in Africa and in Asia. On the African continent, collections are almost non-existent. North African countries have not contributed so far, but some encouraging signs are coming from Kenya where a young society, PRISK, launched in 2012 has started collecting neighbouring rights, with a million US dollars in revenues in 2014 and $10m projected in 2017. In Senegal, a new PRO has been created early 2015 to collect both authors and neighbouring rights not only for music but for other repertoires.

"The important learning from this study," comments Bruno Boutleux, CEO of Adami, "is that we have major pockets of growth in the world. The European market is quite mature and stable, but the North and South American markets are full of promises, while in Africa and SE Asia, almost everything has to be built from scratch. There is still a lot of work ahead of us to develop a truly global neighbouring rights market."

[Sidebar 2]

The USA is becoming a powerhouse

The United States have become over a decade the biggest market in the world for neighbouring rights, but the paradox is that the country does not have "proper" neighbouring rights legislation on par with that of Europe.

Neighbouring rights were introduced in the States as part of the DMCA (Digital Millennium Copyright Act) sponsored by the Clinton administration in 1998. The DMCA – in article 114 – grants performers and producers of sound recordings a remuneration for the use of sound recordings via non-interactive services via cable, satellite or the internet. Other ways of transmission such as terrestrial radio and TV are excluded, which means that the 9,000 FM radio stations in the US do not pay neighbouring rights, unless they re-broadcast their programmes on the internet (simulcasting), nor do interactive services like Spotify.

The 1998 DMCA also called for the creation of a new collective management organisation to collect and distribute the proceeds of the neighbouring rights. The non-profit society SoundExchange was set up in 2003 to fulfil this mission. Based in Washington, DC, SoundExchange has collected $656 millions in 2013 and distributed $590.4 million to rights owners (up 28% over 2012). In 2014, SoundExchange collected $788m, and since its creation, it has distributed to rights holders over $2.7 billion (€2.45 billion). "Clearly, the US is the biggest generator of revenues and that's going to continue," says PPL CEO Peter Leathem.

The bulk of SoundExchange's revenues come from two services experiencing major growth: Pandora, an online radio platform, which claims over 76 million users, and Sirius/XM, a satellite radio platform, with 25 million subscribers. SoundExchange collects also from simulcasters like iHeartRadio (formerly Clear Channel) and from more than 2,500 radio stations simulcasting their programmes online.



SoundExchange has reciprocal agreements with over 30 societies outside the United States, but less than 1% of its revenues come from international sources. This situation relates to the absence of ratification of the Rome Convention by the United States. The lack of neighbouring rights linked to the public performance of recorded music by terrestrial broadcasters penalises performers and producers of recordings who cannot claim similar rights outside of the United States. In the Spring 2015, a new Bill was introduced before Congress, the "Fair play, Fair Pay Act, which proposes to grant performers and labels performance rights for the use of sound recordings on terrestrial radio.

Of course, the perspective of the US joining the fold will have a lot of implications, not least allowing US performers and labels to go collect neighbouring rights overseas, but also non-US artists and labels being at last able to benefit from terrestrial rights for their works. The uptake could be quantified in hundreds of million dollars in additional revenues for performers and labels. "It is going to be interesting to see what is going to be happening if they implement legislation in the US," says Ann Tausis, Managing Director of Kobalt Neighbouring Rights. "That would take away all the reciprocity problems that the Americans would have now. US artists would benefit tremendously by qualifying outside of the US for neighbouring rights. But we've been there before, so we'll see if it happens this time around."

LA Sync Mission part 3: 10 more tips from music supervisors

By Emmanuel Legrand

Here are 10 more tips from music supervisords gathered in LA during the 11th Sync Mission (July 13-17) organised by the BPI, the MPA and UKTI taken from the comments made by over 60 music supervisors and sync specialists.

[This story was initially published online by Music Week.]


11 - Build relationships
Newcomers in the sync business should not expect everything at once. Most supervisors work with trusted sources and when they start working with a new supplier, it is a leap of faith. "So much is based on relationship, some going back 20 years in my case," said Cybele Pettus, music supervisor at games specialist Electronic Arts. "I want to get to know people and that is why I don't send pitches, but the catchphrase is that I am always working on something," she added. But for some, building relations with newcomers is just a natural part of the process. "We are always trying to find new things, new bands, new publishers, new labels," said Jason Alexander, president of Hit the Ground Running.
On feature films, there are also editors who have their own views on music, and some rights-owners are tempted to go directly to them, but music supervisors are not always keen: "Music editors do not know about licensing," said Amine Ramer, music supervisor at States of Sound. "Part of my job is to pull what they put in because they can't have it." As a matter of good policy, Ramer suggests it is "better not to bypass music supervisors by going directly to music editors. That's a good way to annoy music supervisors."
12 - Reactivity is key to success
It is crucial to be quick to respond to a request for a sync. Do not let mail sit in your inbox. Respond and respond quickly. You stand more chance of winning a sync if you of the reactive kind. You make friends that way and you also build a reputation as a reliable partner. Sam Diaz, director of music supervision at CBS Television Studios, who has worked on such properties as NCIS, Blue Blood and The Good Wives, was adamant on the need to be reactive. "TV is fast-paced and many times we only have a few hours [to clear music], so our life is easier when we deal with someone who administers master and publishing and can do it with one mail," he said.
13 - Do not discard any genre
You may have a very genre-specific catalogue and think you have little chance of scoring syncs but, on principle, do not think it does not have potential. You never know what a studio might be working on. It is all about context. The forthcoming adaptation of Philip K. Dick's novel The Man In The High Castle takes place in a dystopian world where the US territory is shared between the Japanese and the Germans. As a result, the supervisors were looking for pop Japanese songs circa mid-60s, and the trailer comes with a version of German classic Edelweiss sung in Japanese! Meanwhile, Danny Cannon, the British filmmaker and executive producer TV series Gotham, set in New York in the 70s has a soundtrack made almost exclusively of British music from the late 70s. Heritage rock acts have been used a lot (CSI with The Who is a good example), but a lot of supervisors like indie material that is fresh and new.
14 - Non-scripted shows deliver solid performance rights
When it comes to non-scripted shows, from games to reality-TV shows, it is "quality and quantity," according to John Fulford, music supervisor at Entertainment Asset Partners. Joe Brandt, music supervisor at Collins Avenue, who works on TV-reality show Keeping Up With The Kardashians for E! Networks, says a show can have up to 120 different music cues over 42 minutes. "Budgets are always an issue, so libraries with a blanket license are often the easy solution," he explained. Music libraries like Source Audio are often used to get music for these shows, but a lot of supervisors are also looking for specific sounds or feels to match the action on the screen. "On a lot of unscripted shows I work on, we hire composers to have a score for the show and then do licenses for songs to supplement that," said Carrie Hughes, music supervisor at Reflection Music: "It is decided early on and depends of budgets." Brandt is a huge fans of stems for non-scripted shows: "It is amazing what you can do with stems, like just having drums and bass."
Due to the high volume of cues on non-scripted shows, license fees tend to be lower than for scripted shows, but on the plus side, noted Carrie Hughes, music supervisor at Reflection Music, "unscripted shows can be aired a lot of times so back-end royalties can be bigger than on scripted shows. Reality TV is underrated in terms of discovering talent and value. The music is played more so you earn more, even if our fees are low. These shows also break new music more [than scripted shows], because we use artists so far before big budget [shows] pay attention to them."
15 - Baby acts and indie bands can do well
If the biggest syncs go to the biggest acts in general, supervisors like hearing about -- and pick -- new acts for two main reasons: They're usually cheaper, and they are fresher. "On films with a budget range of $1m to $3m, we can use a lot of indie artists," said Sarah Webster from Saraswati Music Supervision. For example, in the US series The Royals, filmmaker Mark Schwahn was a fan of indie band Slowclub and he arranged for the band to perform during a scene, during which a news snippet was also produced. "We shot the band and gave them exposure on the internet," explained Rebecca Rienks, music supervisor at E! Networks. "This is ancillary content for us, but for a band it's a huge things. They got paid but they also gave us the piece for the news item."
Baby acts are also very much used in games, not least because of the long timeline, according to Cybele Pettus, music supervisor at Electronic Arts: "Because of the timeline of games, the key to have music as fresh as possible when it comes out. We do make enormous efforts to hear what is coming, we also focus on baby bands. I want to hear the ones that have the most chance to break out."
16 - Fees are down but usage is up
With the multiplication of shows, of channels and with the internet as a new source of distribution, the opportunities to place music have mushroomed. But at the same time, fees have been somewhat eroded. "It's amazing how people think we can spend. Even on Breaking Bad we only started to have budgets by the end of the show. We have to be creative. We rarely have the budgets people think we do," said Thomas Golubic, music supervisor at SuperMusicVision. "Fees are plummeting," confirmed Pamela Lillig, VP for Film & TV at BMG Chrysalis US, who warned of the tendency the some rights owners have to give away music for free in order to get a foot at the door. "If we all give it away, I'm not sure there will be a sync business in a few years from now."
On feature films, the budget - and the fees - will be very different whether it is produced by a studio or by an independent company. Andy Ross, music supervisor at Cutting Edge Group said that independently-produced feature films sometimes come with budgets as low as $15,000 for music. "I worked on two movies with 25 songs in each, and each had a [music] budget of $25,000," he said.
17 - Fees depend on projects and leverage

Fees are dependent on the media genre (film, TV, advertising, games, trailers, etc), the type of show, the budget, the clout of the act and the desire from filmmakers and producers to have the song. Don't expect a tonne of six figure cheques (yes, they still pay with cheques, very 20th Century!).

How can rights-owners negotiate a good fee? "It is all about leverage and figuring out what leverage you have," said Pamela Lillig, VP for film & TV at BMG Chrysalis US. "You have to seize the moment and make the best money. You have to hope the songs are the one that creatively work best for them. It often is a big lottery draw." Leverage can help get a clause of the "most favourite nation" which means that "nobody is going to get a higher fee than you", but for Ann Kline, an independent music supervisor, "if you are an indie artist, you will not get it. It depends on your leverage." If you are Metallica (who own their publishing) or The Beatles (administered through Sony/ATV), you have leverage. It also depends how much the filmmaker or the producers want the track. Mara Schwartz, founder of Superior Music Publishing, explained that if the deal is about a track that will be used as background music in a bar, it is something that you have the least leverage on "but if it is Bye Bye Blackbird [for a movie] with Johnny Depp where the phrase is used by the actor, then you have more leverage."

18 - Understand the contracts
Most studios have standards contracts, but it is always recommended, in the beginning, to have a pair of lawyers' eyes looking over the fine print. Contracts vary substantially according to usage. For the licensing of a track for films and TV shows, the terms are usually that the license is for the world and in perpetuity. In adversing, the use of the music is limited within a specific time frame, and very often by geographic boundaries. "For most clearances these days, it is in perpetuity for all media, at least for film and TV," said Pamela Lillig, VP for film and TV at BMG Chrysalis US. "With [a show for] Netflix, we want to clear everything for the world and perpetuity," confirmed Thomas Golubic, music supervisor at SuperMusicVision. In the case of some usages deemed "for internet only" Lillig suggested to pay special attention to the terms, especially if it is music for advertising. "If somebody says it is just for internet, you have to know more," explained Lillig.
19 - $$$
You will be paid, but be patient! Big studios or networks like NBCUniversal clear hundreds of songs per week and it does create a backlog of invoices in the accounting department, so it can take some time. You may even be paid by... cheque, this piece of paper that has almost disappeared from accounting tools in Europe. And there's not much you can do about it.
20 - Patience and persistence...
Be patient and persistent and things will happen. It takes time to build relationships, and you have to take a long term view about building a syncs business. After all, as British filmmaker/producer Danny Cannon said, "Any project that is made anywhere should be called a miracle." So try to make miracles happen! And hear one last word of advice from John Anderson from Hunnypot: "Forget what you all learned and focus on your writers and get great songs. If you have great songs, it will be easy to place your music."

More about the British Sync Mission 2015:
Part 1: Understanding the US sync market
Part 2: 10 tips from music supervisors

LA Sync Mission part 2: 10 tips from music supervisors

By Emmanuel Legrand

As music synchronisation becomes an increasingly important part of today’s music industry, understanding how the system works, especially in the Mecca of syncs, Los Angeles, is paramount. It’s even better if your understanding comes from the decisionmakers themselves. In part two of this three-part story on the US sync market, here are 10 tips gathered in LA during the 11th Sync Mission (July 13-17) organised by the BPI, the MPA and UKTI from comments made by over 60 music supervisors and sync specialists.

[This story was initially published in Music Week]


1. Know your rights! 
Knowledge starts at home: make sure you know what you can license. Before attempting to approach any music supervisor - whether you are the owner of a recording, a publisher, a songwriter, a manager or an appointed licensing agent - make sure you own or represent what you claim you do. If you are the owner of a master that has multiple samples, make sure each one of them is cleared. Ditto with multiple songwriters. That’s the safer way to build a catalogue that you can shop around with the perfect guarantee that you have 100% of the rights. A song only 95%-cleared is a source of problems if the remaining 5% disagree with the deal, so it is paramount to make sure that everything is cleared, and by that, supervisors really mean everything. A lawsuit from whoever owns the uncleared 5% would be a disaster for the supervisors, who could jeopardise their relationship with the studio or the producer of the show, and for the company or person who provided the track. “What you want to hear is that people own the song completely,” said Andy Ross, music supervisor at Cutting Edge Group. “Just be accurate: Do say when you do not have something. We do not want to be sent inaccurate stuff.”

2. Involve your writers and composers
Working with the understanding and the accord of the artists is paramount. Labels and publishers have to discuss these issues with their composers and artists before even thinking about pitching music for syncs. Artists have to understand what it entails, and they also have to be on cue when a request for a sync comes their way. Their rapid reaction will also determine the chances of the sync succeeding. And yes, it is normal for artists to want to know more about what the topic of the show is about, how their music is placed and how it will be used.
Jason Alexander, president of Hit The Ground Running recalled working on an episode of CSI when it was decided that a song by Sigur Ros would be perfect for a long scene where the music would have been the only sonic presence. “Sigur Ros asked for a clip [of the scene], so we sent it and then... fingers crossed! Eventually we got their final approval. It is a testament of the show that bands accept our proposals.”
Studios and music supervisors are also keen to get approval from music creators for material that can be used in delicate situations. In Breaking Bad, which dealt over and over with drug issues, artists had to be on board. “Once [a track is] selected, we always made sure that it was cleared, but also that the artist is OK with the connection to drugs,” explained Thomas Golubic, music supervisor at SuperMusicVision (pictured, above), who worked on such shows as Six Feet Under, Breaking Bad, Walking Dead, Manhattan, Grace And Frankie, Halt and Catch Fire.

3. Try to pre-clear master and publishing
Supervisors like one-stop-shops where the rights are bundled through the same person, or at least pre-cleared with all the rights-owners, so that within minutes of getting the green light to use a song, the material can be sent. If you are the publisher of a track and taking the lead in the sync process, it is advisable that you also try to clear the master beforehand. For two reasons: a) it is a gain of time, especially if the window to close the deal is small; and b) what if the owner of the master or the performer are not ready to license their music? This makes the licensor look bad, and could jeopardise its relationship with the music supervisor. Majors could certainly provide onestop-shops for every project but music supervisors insist that they have options. “If I end up using repertoire from just one publisher it can be cool but not sustainable in the long term,” said Maya Halfon, music supervisor at Microsoft.

4. Publishing tends to lead the pitching game
Because of the complexities of copyright ownership with music publishing, music supervisors prefer most of the time to deal with publishers, especially if they have also pre-cleared the masters. “We tend to license publishing first and then master because usually masters come in line with the publishing,” explained British-born Sarah Webster, founder and music supervisor at Saraswati Music Supervision, who worked on the movies Pitch Perfect 1 and 2. “On Pitch Perfect, we were dealing with some 60-70 songs, and some had [up to] 15 publishers.” So the onus is usually on publishers to guarantee that the rights are cleared.
For Thomas Golubic, music supervisor at SuperMusicVision, “the more leg work you do on copyright, the better for us. If we like a song and then hear that you have not cleared the samples that may be in the song, it does not help.”
In addition, some situations may require a change of lyrics, and that falls under the remit of publishers. “We always ask approval to have lyric changes,” said Webster.

5. Do your research first
The decision making process for syncs can be complex. Feature films produced by Hollywood studios do have substantial budgets, but they usually work with a score composer, and the choice of music tends to be made in the end by the director, but with the input from the producers, the music editors and the music supervisors. In the case of TV shows, the producers and the creators of the show usually call the shots. So don’t pitch in the dark. It is important to understand the shows and the needs of each supervisor to start pitching wisely. Do some research on the music supervisors, the shows, the musical feel of a show, before making any move. Try to watch the shows to get an idea of the genres of music that are featured, and how. And then try to identify the music supervisor in charge of the project.
One of the best ways to know what kind of shows they are working on is to follow their Twitter feed if they have one. “Do the research, check on LinkedIn, watch the show and know what we need,” said Jonathan Weiss, from Bunim-Murray Productions. “One of the ways to ingratiate yourself is to show that you’ve done the research.”
Don’t forget that most supervisors are passionate about music so never lose track of what they are looking for. “My favourite thing is matching the right song with the visual,” said Amine Ramer, music supervisor at States Of Sound. That’s the business of syncs: match music with visuals! And if you think synchronisation is an exact science, take the advice of Maya Halfon, music supervisor at Microsoft: “Very often it is trial and error and trial and trial and error.”

6. Check how supervisors want their music delivered
To make matters easier, each supervisor has their own preferences when it comes to the way they want music made available to them. Some like links, others work with Dropbox, but Box seems to be one of the most popular systems. And there are still a few who think CDs are a good way to discover stuff. mp3s seem out of fashion. “[If you mail me] I will look at the body of the mail and if there’s a visual aspect to it I might click, but do not send mp3s,” pleaded Gemma Dempsey, VP international at Metropolis Studio.

7. Make sure you have everything ready
Pitching a song is not only about the music and the artist, it is also about what you can send alongside a song when things are moving your way. So think about having instrumental versions, and make sure you can deliver stems (specific sections of the song, such as the rhythmic tracks or the topline). Sometimes having covers of tracks you own the rights to available can help. “When pitching for a song with lyrics, make sure you have an instrumental [version] because if we like something, very quickly we’ll come back to you asking for the instrumental version,” said Chris Jackson, VP music at NBC Universal. “And if we get a bite into something, get your stuff prepared, because, literally, if you get the call, it could well be for tomorrow.”
Thomas Golubic, music supervisor at SuperMusicVision added: “Every show is different but the more prepared you are, the better. If you also have an instrumental version, it can be handy and I can pitch it too. Stems can be useful, especially for advertising, when they want the a capella version or just the music."

8. Metadata, metadata, metadata
Many different supervisors during the Sync Mission stated the importance of metadata. It needs to be accurate, and it needs to be complete. What’s the point of sending a track if, for example, not all the rights-holders are listed? Why bother if the correct metadata is not embedded with each tracks? And it is also a crucial element to get it right if you want to get paid when the track is used for a sync. “You need to metadata your cues. We need to see an email address or that it is 100% controlled,” said Andy Ross, music supervisor at Cutting Edge Group. “If I am given something that has no info, I throw it in the bin. I have not time to fill in the missing fields.”
In addition, metadata will help feed the cue sheets that producers provide to the networks and to all the sales affiliates around the world. Erin Collins, VP, film, TV and developing media at performance rights society SESAC, said the the cue sheets were very important because they will determine the list of rights-owners. “With cue sheets, you are making sure royalties will come back through,” said Collins. “You can put in a contract that you want copy of the cue sheet that will list the name of the songs and the split.”

9. Sometimes it is better to use third party licensors.
Madonna Wade-Reed, music supervisor at Whoopsie Daisy, whose credentials include Alias, Reign and American Crime is cautious when approached directly by composers or small publishing units, as the individuals are not always aware of the licensing process for syncs. “When you do reach out to a supervisor on your own behalf, if you have already done a license with one of our peers, that reassures us,” she noted. “I do not have time to teach someone who has never done a license.”
To avoid such situations, some supervisors suggested using third party licensors, especially for smaller companies. “They have the ear of music supervisors,” said Sarah Webster of Saraswati music supervision. “If we deal with independent songwriters or publishers, we are bombarded. I prefer dealing with third party licensors, we trust them. I know that if I call someone I have something in my inbox. And if they say they own it, you know they do.”

10. Be selective with what you send
 Choose wisely the tracks that you pitch rather than sending 30-60 songs. There is always a tendency to think that more is better in that it gives a better sense of what your catalogue is about. But think about the person at the receiving end: Who has the time to listen to 30 songs? Each supervisor who spoke during the Sync Mission reminded the audience that they did not want to be flooded with music. So pick the songs that in your opinion will work the best with the project, or those that you think are your top tracks for the pitch. “The first time [you contact a supervisor] it is better to give just a link,” said Joe Brandt, music supervisor at Collins Avenue.
 A good way of keeping a line of communication open with supervisors is to have a monthly online/ email newsletter sent to all supervisors, with updates on your catalogue, highlighting one to three songs maximum that could be of interest. “Don’t send me the entire back catalogue,” said Cybele Pettus, music supervisor at Electronic Arts, whose properties include FIFA, Hockey or SIMS. “Send the best song you have now.”


More about the British Sync Mission 2015:
Part 1: Understanding the US sync market
Part 3: 10 more tips from music supervisors

LA Sync Mission part 1: Understanding the US sync market

By Emmanuel Legrand   

Sync hungry Brits descended upon LA in July as part of the British Sync Mission 2015 to hear from US music supervisors in a bid to get ahead in Hollywood, with the help of the BPI, the MPA and UKTI. This is the first of three reports from Los Angeles.

[This story was initially published in Music Week]
 

A successful sync business is based on knowing the market. Sounds simple, but four days in LA , immersed in the biggest sync market in the world, show that it is not that obvious. The sync market has grown to be extremely complex, with a large number of players and decision-makers, and with each type of use and media platform having its own processes. 
For the 40+ music executives who travelled to Los Angeles from July 13-17 for the 11th Sync Mission organised by the BPI and the MPA with the support of UKTI, its was all about getting informed about the latest trends in Hollywood, and getting enough knowledge to better navigate through the high seas of synchronisation.

 “The LA Sync Mission allowed us to meet with new and established agencies to pitch them our upcoming artists,” explains Charles FitzGerald, global head of sync and brand at [PIAS]. “One agency loved our music so much that we are now in discussions for exclusive representation of a couple of our artists.”

FitzGerald says that the US market has already been very productive for [PIAS], citing, for example, no less than 13 syncs for Danish artist Agnes Obel last year in the US. Adds FitzGerald: “It is incredibly difficult to get breaking indie artists heard in the crowded LA music supervisor community. We believe that partnering with multiple great sync agencies is key to the growth of our US sync income.”

 The key to the success of labels, publishers, composers and managers is understanding the process. There are syncs for basically every single type of audiovisual production: featured films produced by studios, films produced by independent producers, trailers, scripted TV series and TV movies, non-scripted TV shows, video games, and also on-air promos and background music for TV channels.

 Put together by a UKTI team in LA, led by Carlo Cavagna, consul and head of trade and investment at UKTI, the programme of the 2015 Sync Mission was packed with sessions covering virtually every aspects of syncs, with some heavy hitters in the field who are not shy of sharing information and time with the British delegation.

 From British filmmaker and executive producer Danny Cannon (CSI, Gotham) to music supervisors at Electronic Arts, Activision, Sony Playstation, Microsoft Xbox, CBS Television Studios, NBC Universal, AMG Pictures Entertainment, E! Networks, and many more independent supervisors, they all came to the iconic Capitol Records Towers to share their experiences. “Remember, you need them, but they also need you,” said music sector specialist at UKTI, Phil Patterson, adding that what UKTI is interested in the end is seeing “business wins”.

 “UKTI do a brilliant job at putting together these conferences,” says Marilyn David, founder of boutique label/publishing unit Mayvid Entertainment, who adds that her trip to LA, all expenses included, amounted to £3,000. And she thinks it is worth every penny. Says David: “I came here to make an introduction of my company and the genres we were working on, and since we are quite avant garde, I wanted to test my repertoire. I made contact with several supervisors who requested that I sent material. I will send one or two songs each and I will definitely have my feet here to continue to build relationships.”

 The rewards can be significant. Sebastian Weingartshofer, in charge of A&R, digital and product manager at dance specialist MTA Records reports that, last year, he scored a few sync successes: the track Close To You by MANT got picked by CSI’s music supervisors, resulting in fees of $10,000 for the master and just as much for publishing. A cue on the trailer for the movie 47 Ronin by MTA’s act KillSonik (Incinerator) also generated $10,000 in masters fees and $10,000 in publishing. And the placement of Dimension’s Pull Me Under in a Forza Motorsport 2 DLC video game brought in $4,000 for the master and the same for publishing.

“We get paid more here than in London,” says Laura Westcott, founder of fair music platform Soundcheque. “In the UK we have a big advertising market, but in Los Angeles, it’s all about TV and films.”

Throughout the four days, the participants were given a glimpse of the programmes currently being produced in LA. A series like The Royals, in its US version, is very British-music heavy and had all the participants eager to find a slot on it for their music. Similarly, Gotham, despite taking place in a dystopian New York in the 1970s, is packed with British music, especially punk music, picked by executive producer Danny Cannon. Likewise, a focus on NBC Universal, a company with a large variety of channels, gave a sense of the sheer diversity of music required by these media giants. “With NBCU you have a broad platform in terms of pitching, and there’s a wide a variety of choices,” explained Chris Jackson, VP music at NBC Universal. “Know your pitches and who you’re pitching to.”

Sharing information is very much the ethos of the Sync Mission, but UKTI’s Patterson was even urging the participants to think collectively, rather than just individually. “If you talk to a supervisor, and they are looking for a piece of metal but you are in dance, don’t dismiss it. Say that you know someone who has the track. And pass on the info.”

This collaborative spirit was the foundation of a new collective, BritSync, regrouping 24 independent British companies who took part in the Sync Mission in 2014. Following the week in LA, one of them, Tris Taylor from Pink Lizard Music sent a mail to the participants under the header “Stupid idea” suggesting that they formed a collective to approach music supervisors with the greatest chances to provide them with the music that they are looking for.

“Last year, we realised that there is so much overlap between the companies that we created BritSync as a gateway to meeting people,” says Vanessa Higgins of Regent Street Records. Taylor suggested that they combined resources to provide supervisors with specific themed playlists. Now, the collective meets once a month under the aegis of the BPI to iron out BritSync strategy and actions. “Together, the 24 different companies give access to an amazing range of music,” says Lucy Broadbent, co-owner of Uncommon Music, who is part of the collective and who believes that music supervisors appreciate the kind of one-stopshop provided by BritSync.

But for all the potential of syncs, some, like John Truelove, Founder of Truelove Music, try to remain cautiously realistic. “Being here is like a reality check: Syncs are great but they are the cream on the cake,” he says. “Very few people make a living out of it, but it can be a good fill financially and career-wise.” 

THE SYNC MISSION BY SOME WHO WERE THERE...

Marilyn David, founder, Mayvid Entertainment 
“It is my first mission of this kind and, frankly, I did not know what to expect. I try to go to as many conferences to learn and navigate, but arriving here has exceeded my expectations. There’s this proximity with the industry heads, the attention you get from them, and the one-on-ones are very interesting. This is unique to this conference. I am already looking forward to next year’s.”

Charles FitzGerald, global head of sync and brand, [PIAS] 
“The LA Sync Mission was beyond all my expectations. It was an incredible opportunity to develop our existing relationships with US supervisors as well as taking us straight to the source, with site visits to the music teams at Disney/ABC and Sony Pictures. We pitch for US syncs via LA supervisors on a weekly basis -however you rarely get to meet with them and develop a more business relation. The British Consulate event was a whole evening of meeting all the supervisors we’ve been emailing/calling for so many years but have never met face to face. I believe this will be of huge value to [PIAS] and increase the volume of syncs we confirm in the US.”

Verity Griffiths, head of sync, Cooking Vinyl 
“This year’s Sync Mission (this is my fourth time) maintained the high calibre of panels and networking opportunities. I’ve come to look forward to every year, and some excellent pitching opportunities and targeted briefs with business to follow.”

Vanessa Higgins, Regent Street Records 
“This is my second mission. For me, the most important thing was meeting with so many companies I was not aware of. I am learning how quick it is and how serious you have to be. You need to you get your stuff together or you won’t be taken seriously. I am now making sure that I am in that position.”

Anthony David King 
“I work in venture capital and with funders who often fund start-ups relating to music and creative industries. This is my fist sync mission. My interest is in monetisation of copyright and what are the new biz models out there, and how does sync play a role. I was enlightened by the nature of the variation of different fees for different things, whether the shows are scripted or unscripted, by the fact that you can collect royalties for re-runs, and that for ads, fees can be high. It is a brilliant and intensive way to give people like me or in publishing, at labels, or composers, the knowledge and the tools to make decisions and understand more how music supervisors acquire music. Overall, it gave me a better perspective of the layers in which licensing works. I feel I have more of a grasp of it.”

Ysanne Spevack, Amazing Media Group 
“This is my first Sync Mission as a delegate, but my fourth as providing the music for the party. The format was as I expected it to be. We receive a lot of information beforehand, and there are very high quality people coming. They are very open delegates and we have higher accessibility and, I think, more openness. The reason they take part in this event is that they want to receive British music. I understand British music and culture and, based in LA, I understand business practices. What I am offering for each individual is very targeted, and we had approximately a 100% success rate in having the individual saying they want to hear that specific tune I selected for them. They want to hear new emerging artist, and we have 250,000 new acts with 700,000 new tracks on our platform. It is about having the right tunes at the right time.”

John Truelove, founder, Truelove Music
“I’ve done quite a few missions - this must be the eighth or something. What I like is the ‘esprit de corps’ that you get here. I think it is almost the best thing about it. We are able to feel that there is a community of spirit. Besides that, it is an opportunity for me to immerse myself in the sync world for a week, with relatively no other distractions. What keeps me coming back is the need to maintain relationships and create new ones with supervisors. It also gives me a good overview of the landscape. It was very valuable to be here.”

Sebastian Weingartshofer, A&R, digital, product manager, events, MTA Records
“We specialise in dance music primarily. I first came to the Sync Mission in 2012 and off the back of it I gained invaluable contact that I would have never made from the UK. For the price you pay, I recouped it tenfold. It also helps with your overall knowledge of the sync business so when you are back in UK, you have a different approach, and you are more efficient. Overall, I recommend it.”

Laura Westcott, founder, Soundcheque
“This is my first mission. We are a start-up and we are a fair trade music company. We fight for the best sync fees. We get 30% and pay 70% to artists. We are based in London and have a virtual office in LA. The mission was as I expected it to be, with a very detailed programme. It is all about [building] and revisiting relationships. I am already on a lot of mailing lists. But what is important is that it is very amicable here.” 

More about the British Sync Mission 2015:
Part 2: 10 tips from music supervisors
Part 3: 10 more tips from music supervisors