Time And Competition – How They Influence Sync Licence Fees
Two key licence fee cost drivers that many brands and ad agencies fail to control are urgency and competitive landscape.
Assuming that the sync licence fee will be the same whether you’ve allowed six months to clear the track, or two days, is likely to result in some unwelcome surprises when the quote comes in.
Here’s what you need to know:
Approval chains can be long. So you need to allow lots of time when brokering sync licence deals as clearances don’t happen in a day or even just a few days. It can take a week or sometimes much longer.
When brands, or more usually their agencies, leave music to the last minute, the licence request to music right owners becomes urgent. Indeed, music publishers and record labels are continually amazed that brands and agencies appear to exist in a constant state of panic – everything is urgent.
How do they respond? With significant fee inflation. Where there is panic, there are high licence fees as rights owners know that the brand and its agency are backed against the wall and have little or no time to find alternative music tracks. Give yourself more time, and your ability to negotiate improves.
(ii) Competitive landscape: Hero tracks & back-ups
Closely linked to urgency is competitive landscape. All too often, brands become fixated on one music track that is often the one that was dubbed by the agency to the mood film during creative development. Everyone on both the brand and agency teams falls in love with this track – and this position becomes further entrenched if the music scores highly during research.
What so frequently happens is that no one thinks to check if the music track can actually be cleared, and if so, at what price. When approaches to the rights owners are finally made, late in the production schedule, if the resulting quote is very high, there’s a tendency for the brand to concede and pay the quoted fee. There’s a sense that “we have nowhere else to go” because everyone’s so emotionally attached to the particular music track.
The root of this problem is the “single agency recommendation”. A tendency for creative agencies to present the “one and only” music track that works with their creative idea and a refusal to accept that any other can perform the same function. The viewpoint often becomes entrenched if the brand, or its procurement team, pushes back citing cost as a reason.
To avoid this problem, from the very outset, ensure that:
- Your creative agency presents multiple music track ideas, even for the mood film
- You check the clearability and cost of all music track contenders
- You assess both creative and commercial attributes of each track before becoming attached to any one title
The flaws in the ad agency practice of a single recommend track whose clearance isn’t addressed until the eleventh hour, are plain to see.
- empowers music rights owners
- can irritate approval parties, making them less cooperative
- creates disproportionately high fee inflation
Single track recommendations mean...
- no “walk away” position for the brand
- little or no bargaining power for the brand
- disproportionately high fee inflation
The above points reinforce the widely used “Cheap, Quick, Good” model below in which customers usually want all three attributes but suppliers will only ever grant two.
The above post is an excerpt from my book Music Rights Without Fights. If you would like a copy of this 'manual' for buying music for brand campaigns, click here.
Contact me directly to discuss any of the subjects covered in this blog post, or for anything else concerning sync licence fees.