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Music Placement Companies

Music Placement Companies

One of the many developments in the music business recently is the increasing presence of so-called “Music Placement Companies,” aka “Pitching Companies.” The sole focus of these companies is to represent indie artists, songwriters, and small indie labels for purposes of getting their music used in movies, TV shows, commercials, computer games, and elsewhere.

Until the mid to late 1990s, most submissions for films, TV shows, etc. were done by the TV/Film departments of record companies and music publishing companies. But starting in the
1990s, record companies and publishing companies started downsizing significantly, and many of the people who left those companies started their own small businesses, and in many cases
started placement companies.

The music licensing market today is quite saturated, not only because of the proliferation of music placement companies, but also because labels and publishers are now trying, more
aggressively than ever, to replace the loss of income from record sales with income from other sources, such as income from the licensing of their music for movies and other such uses.

Despite such saturation, there are still many opportunities to place your music. The key is to educate yourself about that market and approach it as smartly and strategically as possible. Part
of that process is to understand the options when it comes to music placement companies.

The Two Main Types of Placement Companies

Today there are two main types of music placement companies:

Companies with Large Catalogs. This kind of company represents a large number of owners of recordings. The idea with these large placement companies is to be able to provide a wide range of material for companies looking for music to use. Usually the material can be previewed online by companies who are looking for material to use in a production.

One problem for artists with these kinds of companies is that it is very easy to get lost in the mix, since their focus is to provide access to a very large catalog of music, rather than proactively
promoting a small number of artists.

Companies with Smaller Catalogs. These smaller companies tend to represent a very limited number of artists, and their goal is to proactively and aggressively promote those particular artists. The goal is not to provide a huge catalog of material, but instead to aggressively promote the relatively small number of artists they represent.

Why Use A Music Placement Company?

There are several reasons for you to consider signing up with a music placement company:

Relationships. Music placement companies, at least the better ones, have existing relationships and regular interaction with companies looking for music, like music supervisors and film and TV producers. Because of those relationships, they are much better able to make things happen than you might be able to do yourself.

And, just as important, they are better able, because of their relationships, to find much better paying placements. The reality of music licensing is that there are many, many low-dollar
licensing opportunities, and a lot fewer big-dollar opportunities. And often (though not always), you need to be represented by people with the right relationships in order to get a good shot at the big-dollar opportunities.

Incidentally, there are some very good practical reasons why those relationships are so important. For anyone working on the staff of a film production company, TV show or ad agency, one of the worst things that can happen is to acquire the rights to use music, then to find out later that there are legal problems with the music (for example, finding out that the music contains uncleared samples). And so, they tend to prefer to deal with music owners they know and trust. They also tend to want to deal with music owners whose musical knowledge and taste they trust, so that if they put out a request for a certain type of music for a particular project, they don’t have to worry about receiving unusable or inappropriate submissions. Usually people who
work on productions staffs and at ad agencies, and this would include music supervisors as well, are working on very tight deadlines, and cannot afford to waste time on people whom they can’t count on to deliver the right material.

The reality is that in many instances, the music people on production staffs and at ad agencies have a short list of a relatively few “go to” people, and often a music placement opportunity
becomes known only to those “go to” people, since there may not be time for a wider search.

In short, if you can hook up with a company that has very strong relationships with potential users of your music, you can only benefit from those relationships.

Expertise. The good companies know how to proactively find the best placement opportunities. They also know how to submit the material in such a way as to maximize the chances of
successfully placing music.
Leveraging Your Resources. It can take a lot of time to find potential placement opportunities yourself and then submit material, and doing so can easily distract you from doing other things that will move your career along.

Who Is the Competition for Music Placement Companies?

When seeking opportunities to place music in a film, TV show, commercial, or some other use, Music Placement Companies are not only competing with each other, but also with:
• Record Companies
• Music Publishers
• Music Libraries
• Independent Artists Personally Submitting Their Own Material to potential users of music

What Is The Difference Between a Music Placement Company and a Music Library?

Music Placement Companies represent music owned by other people and companies, and not music owned by the Music Placement Company itself. (The exception being that in some cases a Music Placement Company will become contractually entitled, under the terms of their agreement with the owner of the music, to future part-ownership of any song they are able to
license for film, TV, etc. See the “Co-Publishing” paragraph in the “Other Deal Points” section below.)

Music Libraries, on the other hand, own the music. Historical footnote: The first music library, DeWolfe Music, was created to provide soundtrack music for silent films.

Here’s how music libraries generally work: First, they commission musicians, for a flat fee, to create and self-produce music as ‘work for hire,’ and the Music Library then owns all copyrights
in the recording and the underlying musical composition. With Music Libraries, the musician is acting as an independent contractor of the music library company. The music owned by Music Libraries is usually referred to as “library music” or “production music.” Many of the larger Music Libraries, by the way, are subsidiaries of various major labels.

There are actually several different types of Music Libraries. For more information, go to http://en.wikipedia.org/wiki/Production_music.

In the past, the music owned by Music Libraries sounded very generic and formulaic. In recent years, though, library music has become much more competitive.

Typically, the only money the musician will ever earn from a Music Library deal, other than the upfront flat fee paid to them by a Music Library, will possibly be a share of future ASCAP/BMI airplay income. The musician will generally not be entitled to receive a share of the licensing fees received by the Music Library from production companies and ad agencies, or any share of future royalties received by the Music Library from third parties’ use of music owned by the Music Library.

Evaluating Music Placement Companies

There are several things you can do to evaluate a music placement company:

• A good place to start is looking at the company’s website, which will give you a good idea of the level of artists whom they represent. Also, the larger companies usually have a “FAQ” page
on their site, which will answer some basic questions about the company. The information on the website will, of course, be self-serving, but nonetheless it’s a good place to start in order to get a feel for the company.
• Contact some of the artists who are listed on the website, and ask them for their opinion of the company. You will often need to go to the artists’ own websites or Facebook pages in order to beable to contact them.
• Talk to any solid music business contacts you have, to find out whether they know anything about the company or the people who run the company.

The Main Deal Points of Representation Agreements

In order to be represented by a music placement company, they will require you to sign a representation agreement.

There is some variation from company to company as far as the terms of the representation agreement. But most such agreements cover the following main deal points:

Exclusivity vs. Non-Exclusivity. Many of the smaller companies require an exclusive arrangement (meaning that you can be represented only by them and not by another company
that might be interested in pitching your music for use in movies, TV shows, etc.) Most of the larger companies do not require exclusivity.

Before signing any agreement, you want to try to make sure that it’s a good company, and that they are a good fit for you. Be careful. If you sign an unproductive exclusive deal, your hands
will be tied for awhile. And even if it’s a non-exclusive deal, that will prevent you for awhile from entering into an exclusive deal with another company which might be able to help you
much more.

Rights Granted. The agreement will normally contain a list of the rights that you are giving to the company.

Approval Rights. Sometimes such agreements will provide that your approval must be obtained before they license your music for use in political campaigns, NC-17 movies, etc. Whenever possible, it is advisable for you to try to have a right of approval over any licensing deals being entered into on your behalf by the placement company.

Term. The “Term” is the period of time during which they are entitled to act licensing deals on your behalf. There is some variation between company to company, but the term is typically for 1, 2 or 3 years. Generally speaking, the shorter the term, the better it is for you since that way, you will be able to exit an unproductive relationship faster.

If the proposed Term is longer than you like, and if you are able to negotiate for changes in the agreement, you could either ask for a shorter term, or you could ask for a short initial term (for example, one year), then have the contract say that if they earn a certain amount of income for you in that initial year, they would have the right to extend the term of the agreement for another year or two.

Territory. Typically the music placement company will have the right to pitch and license your music worldwide. If you already have other deals in place (for example, a sub-publishing
agreement with a publisher in Europe), there needs to be some reference to that fact in the representation agreement.

Income Split. Typically, the company will entitled to receive in the range of 25 to 50 percent of the income generated as a result of licensing deals they enter into on your behalf, though I
recently saw a company asking for 65%. They worded it differently, though, by just saying you would receive 35%, which I suppose is intended to sound more favorable to musicians than
saying, instead, they (the music placement company) gets 65%.

The most typical rate is 50%, though many people feel that is an unreasonably high percentage.

Whatever the percentage is, they will typically get not only that percentage of the upfront licensing fees from film and TV producers etc., but also a share of the ASCAP/BMI airplay income if, as a result of a licensing deal, the song is broadcast (for example, if a track is licensed for use in a film, and the film is then broadcast on TV) and thereby generates ASCAP/BMI

When it comes to ASCAP and BMI, the way it works is that one-half of the ASCAP/BMI income for a song is called the “Publisher’s Share” and the other one-half is called the Writer’s
Share.” The Music Placement Company receives part or all of the Publisher’s Share (the exact percentage depending on the terms of your Representation Agreement with them), and your
publishing company should receive directly from ASCAP/BMI the remainder (if any) of the Publisher’s Share. You as the writer, though, will in any event receive directly from ASCAP/BMI all of the Writer’s Share. Make sure, as much as possible, that the agreement provides that you will receive directly from ASCAP/BMI your Writer’s Share and your share of the Publisher’s Share.

Typically, these companies are not that flexible about changing their standard percentages, although if they are anxious to sign you, they may be more flexible about changing their

Administration Fee. Some companies also charge an “off-the- top” administration fee, in the range of 10 to 15 percent. If so, for every dollar received from licensing deals licensing your
music, they will take 10 to 15 cents off the top, then the remaining amount will be split between you and the placement company according to the basic percentage (the 25-50% percent
described in the “Income Split” section above.)

Ownership of Master. Typically, placement agreements do not give the placement company any right to acquire any ownership share of your master recordings (as opposed to ownership of the underlying musical compositions contained on those recording, as discussed in the Co-Publishing section below).

Re-Titling. Many music placement agreements say that the placement company will be entitled to register your song under a new title with whichever performance rights organization you belong to (for example, ASCAP or BMI).

Some background: Most music placement companies have an ASCAP-affiliated publishing company and a separate BMI-affiliated publishing company, so that they have a way to collect
their share of ASCAP/BMI income directly from ASCAP and BMI, and so that they don’t have to worry about you not paying them (the music placement company) their share of that income.

And so, if the song is registered with ASCAP or BMI under a new title and is broadcast and subsequently generates ASCAP or BMI income, ASCAP/BMI will pay to the Music Placement
Company its share of that ASCAP/BMI income, and the remainder will be credited to you.

On the other hand, if the song were not re-titled, then your own publishing company would receive all of the “Publisher’s Share” money directly from ASCAP or BMI, and you would then
be obligated to turn around and pay the music placement company its share of that income. Some placement companies are willing to agree to this, but many (if not most) are not.

“Re-titling” has been a very controversial issue in recent years, because many people feel that it can complicate issues regarding who owns the song, and also increases the odds of the placement company receiving more income than they are entitled to. Also, if the song is re-titled with a new, unique title, and is then sent out to various music supervisors, movie studios and others for possible use, it may look to those music supervisors, studios, etc. like the music placement company has exclusive rights in that material and is the exclusive representative of that material, even if in fact the placement company has only non-exclusive representation rights.

Post-Term Administration. The agreement may provide that for any of your songs they place, that they have a right to handle the copyright administration and collection of income from that song for one or two years after the end of the term of the representation agreement, as far as income from licensing deals with third parties which had been entered into during the “Term” of the agreement. The reason being, there will often continue to be some income coming in from those deals even after the Term of the representation agreement ends, and most placement companies want to make sure that they have the right to collect (and share in) that particular income for at least a certain period of time (usually one or two years, as mentioned above).

Not all placement companies require such a clause, though.

Warranties. Typically the agreement will contain a warranty clause, stating that you are the owner and creator of all of the material which is to be covered by the placement agreement, and that the material doesn’t contain any “samples.”

If there are in fact any uncleared samples contained in your recordings, though, or if there are any other legal problems with the contents of your music, make sure that the placement company is aware of it before they start pitching your material. The inclusion of an illegal sample can easily cause legal problems for the company and ad agency using your music, and if so, they will not be likely to want to use any music from that particular music placement company again, which in turn will naturally have a very negative effect on the attitude of the music placement company toward you, not to mention the fact that you could have some legal liability for damages because of the legal problems with your music. In short, this is serious stuff, and you need to be absolutely upfront about any legal problems with your music.

Other Deal Points

The following are additional deal points. These tend to appear only in the representation agreements used by smaller placement companies, and appear much less so in the contracts used
by the larger placement companies.

In the case of these ‘Other Deal Points,’ it is frequently possible for you to do some creative negotiating for changes in the contract offered to you by the Music Placement Company.

Co-Publishing. Some placement contracts state that if they place one of your tracks in, for example, a film or TV show, they will become entitled to a share of copyright ownership of the
underlying musical composition (but NOT the master recording). Typically, they ask for 50% of the Publisher’s share, in which case for every dollar of music publishing income, 50 cents will go to you as the artist/writer (the writer’s share), 25 cents will go to your publishing company (i.e., ½ of the publisher’s share), and the placement company will receive the remaining 25 cents (the other ½ of the publisher’s share).

If you are able to negotiate changes in the agreement, you should ask for some benchmark they have to meet in order to have the right to acquire a share of your copyright. For example, you
could ask for a clause saying they become entitled to a share of the copyright of a song only if the licensing fees for that song were at least a certain dollar amount (the higher the amount, the
better for you). That way, you don’t have to be concerned about them getting a share of a copyright just because they found a very low-dollar licensing deal for you.

Future Exclusivity. Some representation agreements say that if the placement company places a song with a particular TV show or ad campaign, the placement company will be entitled to continue representing you as far as any future music licensing for that show or ad campaign for the remaining duration of that show or ad campaign, even if the term of the agreement has
expired in the meantime.

If such a clause is in the agreement, and if they then place one of your songs in, for example, a particular TV show, then only they can submit your songs to that TV show in the future, for the
life of the show, and you will be contractually prohibited from ever submitting any of your songs to that TV show directly.
Not all placement companies require such a clause.

Exclusions. You may want to seek to have a clause added to the contract, saying that they will not be entitled to share in any income in connection with your own self-released records. That way, you won’t be obligated, for example, to pay them any mechanical royalties based on your record sales, even if they become co-owners of one or more songs that are on your records.

You may also want to have a clause stating that the placement company won’t be entitled to share in any income from deals you have signed in the past.