A Guide to Buying Music for Marketing Procurement Executives — Unlicensed Use Part 2

In Part 1 of A guide to buying music for marketing procurement executives — Unlicensed Use, from our music procurement expert, Richard Kirstein of Resilient Music, we looked at how and where risk arises.

resilientlogo_300dpi_RGBPart 2 looks at the various likely outcomes which range from penalty fees to court injunctions and costly lawsuits. For unwary brands, this can be a painful and expensive Highway To Hell that you won’t want to travel, even with the iconic Angus Young as your guide.  So take note and implement preventive measures so this doesn’t happen to your company!

This is serious stuff, so let’s give the subject the attention it deserves:

  • Occasionally a brand will use music in a marketing campaign that’s not been properly licensed. Most commonly because music is chosen at the 11th hour and the campaign launches before the correct consents have been granted.
  • Sometimes centralised global marketing teams (or their agencies) broker multi-territory licences; if the brand’s local markets aren’t fully briefed on exact usage parameters, inadvertent breaches can occur.
  • Finally, “sound-a-likes,” whose composers are briefed to “write something similar,” cause contentious usages.

It’s vital that brands and agencies understand how to engage correctly with owners of music rights (typically music publishers and record labels) to avoid litigation or costly settlements. The outcome depends on several factors:

Intent

Did the brand (or its agency) knowingly use the music without a licence?

Even if a deal is in negotiation and artist/songwriter consent has been secured, no licence has yet been granted. Whilst music rights owners will be reasonably tolerant if the campaign launches without fully executed licences, provided that all commercial terms have been agreed in writing, it’s unlikely they’ll sue. If commercial terms haven’t been agreed at least by email, the licence fees will be higher than market rates.

  • If a campaign launches where music rights owners weren’t approached (or the brand couldn’t locate them), there’s no defence for unauthorised use. Tolerant music rights owners might demand penalty fees from the licensee (e.g. 50 percent to 100 Percent above market rates) rather than litigate.
  • Where a brand’s clearance request is denied (yet the campaign launches with the denied track), the licensor will seek legal redress, immediate campaign termination, retrospective penalty fees and hefty damages. Brands would do well to remember to message in Lorrie Morgan’s country classic “What Part Of No Don’t You Understand”!

Brand

Is the artist/songwriter happy for their music to be associated with the brand?

  • Most synchronisation licences require artist/writer approval, especially when brand-related. Contentious product categories include alcohol, meat products, “fast” food, financial services, petroleum, chemicals, pharmaceuticals, sanitary products, politics and religion.
  • A luxury brand inadvertently using an unlicensed track might settle with a penalty fee and some free product. However, a burger chain using an unlicensed track by a vegetarian artist can expect litigation.

Reputation

You’ll probably be familiar with this quote:

“It takes a lifetime to build a good reputation, but you can lose it in a minute.” – Will Rogers

An artist who feels “wronged” by an unauthorised usage, especially by a brand in a category they strongly dislike, may seek revenge.  This is easily achieved via social media in which the artist can position themselves as the underdog exploited by an “evil” corporation. An artist with a large fan base knows that through retweets and Likes, their message can quickly reach millions, many of whom may choose to boycott the brand in question. The commercial damage in lost sales could far outweigh any penalty or legal fees. So brands should ask themselves this: Do you really want an artist telling the world “I Hate You So Much Right Now”?

Relationship

Does the licensor have a long-standing relationship with the licensee?

  • A history of multiple licences granted by licensor to licensee may encourage the licensor to settle rather than litigate. Sync licence income often equals more than 20 percent of licensor turnover; relationships with brands and agencies matter. In this context, brands might be able to implore rights owners to “Please Forgive Me” though there’s no guarantee they will!
  • Where there’s no such relationship, claims will follow.

Sound-a-likes

Did the brand intentionally copy another work and claim it to be original?

  • “Sound-a-likes” cause distress to songwriters and publishers. When a brand’s (or agency’s) clearance request is priced outside available budget, the temptation is to commission “something similar.”
  • Where a composer is briefed using the denied/over-priced track, there is intent to infringe. If the new composition is too similar, a musicologist might be engaged to suggest amendments to reduce risk of a legal claim from the music publisher.
  • Even a warranty/unlimited indemnity from the composer that the work is wholly original may not help. Music publishers will claim against the commissioning party (brand or agency) and their deep pockets.

Look out for our next post on YouTube and its three strikes rule! Until then, “Do It Good” and avoid the expense and pain that arises from the unlicensed use of music.

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