Money On My Mind – Music Buying for Marketing Procurement Executives

resilientlogo_300dpi_RGBWe are delighted to publish this post from music procurement expert, Richard Kirstein of Resilient Music.

British Artist Sam Smith won an incredible four trophies, including Best New Artist, at the recent Grammy Awards in the States. This is an amazing achievement for a relatively new UK artist and certainly proves that Brits can crack the all-important US market when the stars correctly align.

One of Sam Smith’s first hits was “Money On My Mind” which has racked up over 50 million-plus YouTube views. The advertising monetisation from this content certainly will create some decent returns.

Money is never far from the mind of procurement execs dealing with the difficult task of buying music. Or, as is more often the case, assessing the practices of their brands’ agencies and trying to decide if the deal brokered represents good value. How often have you heard something like this from your agency?

“We’ve pushed the record label and publisher as far as they’ll go, but really, at 75 grand, it’s a steal and we should wrap this up now!”

So, for this post, we’re going to begin looking at cost drivers which we’ll explore in more detail in the next edition. It’s important to understand why music licence fees can appear to be random and volatile – and how you can wrestle some control in your favour!

The first issue to understand is the length of the “approval chain,” namely all the parties involved in securing consent (or denial) for the licence request.

Start Early

As you can see when you, or more likely your agency, seek permission to use a music track, there are two parallel lines to follow:

The upper line is for the SONG or the music publishing rights – this typically goes via a music publisher, or sometimes several publishers for a jointly controlled copyright.

The lower line is for the SOUND RECORDING or the master rights – this typically goes via a record label.

What’s important to understand is that neither the publisher nor record label speak directly to the talent. Instead, all communication typically goes via the talent manager who may have a strong influence on approval or denial.

The talent in this instance is the artist and songwriter(s) who may be the same or different people. Successful talent is likely to be busy in the studio, on tour, making videos and so not immediately responsive to sync licence requests. So, it may be several days before they actually see your proposal.

To further complicate matters, if for example the talent is contracted to a non-UK record label or music publisher, if you’re UK-based, you must still approach the UK offices of that label and publisher. They in turn approach their overseas affiliate, who approaches the talent manager. So, if you’re looking to license songs or recordings by US talent, there’s an extra link in the approval chain which delays the consent process.

Once your request has finally reached the talent, there may be more back and forth negotiations before approval is given. It’s not uncommon for the manager to demand even higher fees, or tighter restrictions, than the label or publisher have provisionally negotiated on their behalf. Then eventually, if all goes well, the approval comes back down the chain. At the very least, this process can take a few days, but can often become a couple of weeks or more for a particularly famous song or recording.

Why is this important to marketing procurement?

All the above shouts “START EARLY” at any brand looking to license commercial catalogue music. You should insist that your agency is considering music early in the production process and not leaving it to the last few days of post-production. Failure to do so may mean that the approval you need doesn’t come through in time.

What are the implications for cost?

Music licence fees are variable – some might say they often appear random. There’s no rate card for commercial catalogue; for more on this see the summary of our recent WFA webinar.

They key issue here is URGENCY – the later you leave it, the more you’ll pay!

… but just as important is COMPETITION – are all your eggs in one basket with only one music track being considered?

Time & Competition

Record label and music publisher sync licensing execs listen very carefully to all the cues when discussing a licence request with an ad agency. Whilst the required usage and stature of the song/recording are very influential, the two key clues to the rights owners’ negotiating power are:

  1. URGENCY
  2. COMPETITION

Rights owners know that ad agencies typically leave music to the 11th hour and only make one music track recommendation to their brand clients. This suits the agencies’ creative agenda as it doesn’t leave the client any time to question the recommendation, so the agency gets the music it wants – they don’t care if it’s outside budget – after all, it’s not their money! Furthermore, the music rights owners usually believe:

“If the client really wants it, they’ll find the money”

So, if you’re in marketing procurement, insist that your agency:

  1. Starts dealing with music early
  2. Presents at least three recommended tracks, all pre-cleared with clear price tags

For this reason, we’d take issue with Jessie J’s “Price Tag” because in our experience it really is all about the money and you certainly don’t want to forget about the price tag.

Smart marketing procurement executives should:

  • Understand the long approval chain
  • Encourage their Marketing colleagues to do the same
  • Build music research and decision making as early as possible into the production schedule
  • Insist that their agencies comply with this mandate
  • Insist that their agencies present at least three pre-cleared music tracks for consideration

Look out for the next article when we’ll dig deeper into the cost drivers which impact on music licence fees.

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