Business News Labels & Publishers The Great Escape 2017

[email protected] 2017: When Music Gets Synchronised – Deal Making

By and | Published on Friday 23 June 2017

Ros Earls

Look out for more reports throughout June on key sessions that took place at the CMU Insights conferences at The Great Escape last month. Today, the latter half of the sync-focused session in The Royalties Conference.

Sync is a big topic for discussion at most music conferences these days, of course. So much so that it would be easy to think that the synchronisation of music to movies, TV, games and ads – and the licensing income it generates – is the most lucrative part of the music rights business. It’s not. Indeed, for the record industry it’s a very small part of the business indeed (2% worldwide). But it’s more important for the music publishers, and most important for those songwriters who are not also performers.

Who negotiates the sync deals for those songwriters and how do the deals work though? Those were the questions posed to Simon Pursehouse from Sentric Music and Ros Earls from 140db, who managers artists, songwriters and producers, in the second part of the sync session during the CMU Insights Royalties Conference.

“The songwriting world has become massively over-saturated”, Earls noted, explaining why sync can be such an important part of the business for the songwriters and producers she works with, there being less opportunities to write hits for other artists, and those occasional hits often being less lucrative in the streaming age. “It’s getting tougher and tougher to make a living as a songwriter, and as a record producer too. Getting a sync can really save your bacon”.

Which is why music publishers make such a big deal about their sync teams, and why a publisher’s ability to secure sync and original commission opportunities is an important consideration when a songwriter is deciding which publisher to ally with. The opportunity for future sync deals is “always a big part of a publisher’s pitch”, Earls confirmed, though she cautioned, “there’s no guarantee of any of it”.

This may be because the publisher isn’t quite as committed to finding a writer sync deals as they claim – especially if they are repping a large repertoire. Or it might simply be because, as with everything, but even more so with sync, there’s a ‘right time right place’ element to it all.

Either way, a good manager, when working with someone who primarily writes or producers music, rather than performing, should also be seeking opportunities for their clients in the sync space. Earls has lots of contacts in the sync business, and is often being pitched to by sync agencies, though – she stressed – the more people who get involved in the deal-making, the more people taking a cut of the money before it reaches the writer.

“In America, there are huge sync agencies pitching all of the time”, she said. “But obviously they’re taking another slice of the money – in addition to the publisher taking their cut. It’s great to be pitched too of course”, she added. “And those deals are particularly attractive for writers who are self-published and in control of their own copyrights. But if you’re published, then the writer is basically going to end up paying twice”.

Of course, having multiple parties each taking a cut is less of an issue if – through those different entities being involved – you score a particularly valuable deal. “It depends on the return”, Earls said on whether published writers should also work with sync agencies. “If you’re looking at a Disney sync, or you’re looking at a Netflix programme, another 20% [commission] might not matter that much. You’ve got to weigh all that stuff up”.

Quite how sync income is shared is important to consider when negotiating a publishing deal, Pursehouse added. “Definitely be aware that if you’re going to do a deal with any label or publisher, you should include both a procurement and a non-procurement rate on sync”, he said. “That means that if they pitch your song and get you that deal, they can take their full commission. But if the writer secures the deal – directly or via another agent – then the publisher should take a lower cut, maybe an administration fee”.

Earls agreed that its important to structure publishing deals in that way, though added that, with self-procured sync deals, “you have to prove that you secured the deal, and it can be quite tricky getting into who did what”.

On the songs side, sync deals usually come in two parts. First there is the deal that allows the licensee to actually synchronise the song into their video. Any TV company which then broadcasts the finished product, or cinema which screens it, then needs a separate licence to cover the ‘communication’ or ‘performance’ of the finished work. Outside of TV, the first part of the arrangement is usually a direct deal between writer/publisher and the licensee. The second element is handled by the collecting society – so PRS in the UK.

If a finished work is likely to be broadcast or screened on a regular basis, resulting in regular PRS income, does that mean you’ll accept a lower rate at the outset? “It depends on the artist really”, said Earls. “If you’re an artist that’s used to a certain level of income, and you want to sustain your livelihood, you’re thinking more about the long term. But at the same time, you also need to consider your worth in the marketplace, you don’t want to cutting the value of what you do, which you might by accepting the lower fee”.

When it comes to the direct sync deals – rather than those covered by collective licensing – the money on offer varies hugely. The writer’s status is a key factor, but so is the budget that the licensee has access to. The licensee will also often talk up the promotional value of a writer’s music being synced, though that is only really true for songwriters who are also performers, and who have an artist brand to promote and fanbase to build.

Therefore artists and writers need to decide which deals work for their situation. At Sentric, Pursehouse works with lots of artists at the start of their careers. Earlier he recalled how: “We were presented with one deal – for a year-long UK ad campaign – offering the band £3000, which is terrible money. I said to the artist, ‘this is bad money – I would say no to this if it was up to me’. But for the band, it was their first ever single, it bought them a van and they were really chuffed”.

He added: “Ultimately it’s their choice. I’m never going to say no to money when it’s an artist livelihood at stake. We can give advice, we can tell them what they should do, but ultimately you put the facts in front of them, give them your recommendation, and if they say ‘yes’, that’s cool. We’re simply there to facilitate and add value”.

In addition to securing sync deals for existing songs and recordings, there is also the business of original commissions of course, that can be even more lucrative. Though Earls noted that you need to build a decent profile in that space to really see the opportunities.

That said, Earls knows first hand how valuable those opportunities can be when they really work, she having worked with Paul Oakenfold when he got the ‘Big Brother’ theme commission from TV company Endemol. “They came to us to commission the music. That was one of those really big moments, because the show was then franchised around the world and it just kept on going, it was the gift that kept on giving”.

“They didn’t do a buyout on that, did they?” Pursehouse interjected. “So they must have had to relicense it every season”. Earls confirmed that was so. “It was a really good deal, and it’s still going”.

Who gets to own the copyright when TV, movie, gaming or ad companies commission original works is a contentious issue, with more and more production companies and brands seeking to take control of the copyrights their commissions create, which basically means they become the publisher of the music. The writer will get future royalties – certainly their cut of anything collected by PRS – but won’t control the work.

“They might give you a flow through of any subsequent income”, Earls said of those deals. “But they won’t let you hold on to the copyright”. Those deals are particularly tricky for published writers, she added, because the writer’s publishing deal means they couldn’t automatically sign up to a commission that includes a ‘buyout’.

Which again means that songwriters who see sync and original commissions as being key to their businesses need to consider all the implications when signing a publishing contract. Though get yourself a ‘Big Brother’ style deal, and all that time sorting out the technicalities and paperwork will be worth it.

Check out all the reports and resources CMU has published around this year’s CMU Insights @ The Great Escape conferences here.