So you’ve decided on the perfect song from a popular artist for your next ad, film or piece of branded content. What comes next? You’ll need to get permission from the copyright holders to use the song in your work. 

This process, known as music clearance, can be a minefield of negotiations and new terminology. Overcoming these hurdles, however, will empower your work and exact your vision. But how do you know what terms to agree to? What terms are right for your intended use? 

In this blog, we’ll explore the common terminology found in most music clearance contracts. Using an example sync license agreement, we’ll explain how these terms impact your clearance journey and your chances of success.

Contract negotiations in session.
Music clearance contract negotiations in session.

The Basics

Once we’ve researched who controls the rights for a particular song, our first step is to contact all the rightsholders. As you may know, there are two sides to every clearance. These are:

  • The Master side – the rightsholder(s) that control the sound recording (usually a Label or Artist).
  • The Publishing side – the rightsholder(s) that controls the underlying composition (typically a Music Publishing Company).

We’ll then negotiate with all parties from both sides to get the best possible deal for your desired use. At this point you may hear the terms:

  • Quote “Per side” – the quoted fee for clearing 100% of either the Master side or the Publishing side (both of which need to be covered).
  • “All in” quote – a quoted fee that covers both Master AND Publishing if the same entity/individual controls both sides.
  • One-stop – where a single party possesses pre-cleared rights to both the master AND the composition (I know…sounds easy, right?!)

Once we’ve heard from all the rightsholders on both “sides”, the quoted fees are likely to vary dramatically depending on the terms you’ve requested. What’s more, it’s possible that they don’t approve all of your terms and can limit the ways you may use the song.

Imagine the following: you’re producing a TV and web campaign for a soft drink brand, and you want to feature the well-known song “Let’s Party”. In the commercial, various people dance and mouth the words along to the song. The plan is to run the TV commercial globally for as long as possible and leave the video on your YouTube channel forever while boosting it on socials with pay-per-clicks.

First, the label says “No” to licensing the song indefinitely, then suggests a limit of one year. They also want double the fee for a “Featured Vocal” use, and then double again for including the paid media boosts. That’s without mentioning that a different label controls the song outside of North America so you’ll also need to negotiate 50% of the fee with them too.

Before you know it, you’ve been quoted way over budget (and that’s just on the “master side”!) and you’re having to scale back drastically on those plans for your piece. Oh, and that quote is also MFN with publishing and pending artist approval.

Confused? We don’t blame you if so.

To help clarify this language, let’s look at an example Syncronization License – which is one of two contracts you’ll need to obtain (the other being a Master Use Licence) in order to “clear” that epic song.

I Thought I Was ‘Clearing Music’. What’s All This About Synchronization & Master Use Licenses?

Synchronization & Master Use Licenses are the contracts granting you permission to use that “cleared” song. Once we’ve done all the contacting, negotiating and back-and-forth with the rightsholders, they’ll each provide either a Synchronization License (on the publishing side) or a Master Use License (on the label/master side) that covers their share of the song. Typically, you do not have legal permission to use the song until these documents are signed by both licensor (that’s you) and licensee (the rightsholder).

Alongside all the usual legal contractual jargon (which is actually SUPER important) there will be a schedule of the terms and rights being granted. Below is an example of this outline from an example Synchronization License Agreement, along with an explainer of the terms used:

Example of a music license's schedule of terms.

1.) Writer(s) – All the writers that contributed to the composition and their % of ownership (up to 100%). If the publisher only rep’s some of these writers, they will typically highlight these in bold

2.) Publisher(s) & % Owned/Controlled – Lists the publisher’s name and % of ownership of the composition. NB: You need to ensure that 100% of the composition is cleared, so in this case the remaining 50% is controlled by another party (or parties).

3.) U.S. Society(ies) – List any Performing Rights Societies (or PROs, e.g. ASCAP, BMI, PRS) that the writers are assigned to. PROs collect performance royalties on behalf of writers and publishers. 

4.) Use/Timing – Rightsholders will want to know the number of times the song features in your piece and the duration of each use. This will have an impact on the fee: more/longer uses = more $’s.

5.) Context – Describes the type of use e.g. Featured (plays over a key visual such as a montage or title sequence), Dance (if the song is synchronized to dancing) Background (underscore with non-visual source), Vocal or Instrumental. Rightsholders typically charge more for Featured/Dance than Background uses.

6.) MFN – or “Most Favored Nation” is a common clause which means all “Sides” are to be paid an equal fee. So, if publishing receives $25,000 for the use, the master/label side will also require the same amount (or vice versa, depending on which is charging the most). This clause may also be applied across any other songs used in the same production.

7.) Exclusivity – Rightsholders may grant some degree of exclusivity (e.g. within a specific territory or industry, such as Finance or Gaming), so that no other competitors or brands may use the same song for the duration of the term. This usually demands a considerably higher fee.

8.) Territory & Term – Establishes where the licensee is allowed to broadcast the content and the length of time permitted. The territory may be local, national, global, or a mixture for different types of media. Longer terms and broader territories will call for higher fees. NB: Labels and Publishers rarely agree to ‘In Perpetuity’ use, so a defined term limit is normally required.

9.) Rights Granted – This specifies the media types under license, such as TV, Theatrical, Web, and Social Media. The fee will vary depending on the media type and whether content will be enhanced with paid media/pay-per-clicks etc.

10.) Fee & Options – The total fee charged for the license. If the rightsholder controls less than 100% of the composition, this will be charged pro-rata – in this case 50% of the total publishing fee which is $10K split across all publishers. If any Options have been negotiated – e.g. extending the license term or media types – these will also be included with the agreed fees.

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Great! So what do I do with my newfound knowledge of music clearance terminology?

Excellent question! As you can see, a great deal of detail goes into a music clearance deal – from how the music is used, to where and for how long you can publish your content, and in what types of media is included. All of these factors affect how the rightsholders fees are set and whether they grant approval.

So, understanding of the industry lingo means that you can make informed choices on these points as you embark on your clearance journey with Audiosocket. Get in touch with us to start your clearance journey.

As for all the liaising, explaining, negotiating, “t”-crossing, and heavy lifting – you can leave that to us.

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