Your Reputation – When Music Licensing Goes Wrong

music licensingWhile legal, financial and practical considerations should be enough to ensure that brands correctly license music usage, we know that this is not always the case. Whether it’s human error or a ‘who’s going to know’ attitude to music rights licensing, unlicensed music usage is an issue for the industry.

In my experience the biggest incentive to get music licensing right first time around is the potential damage to a brand’s reputation a high profile court case could cause. Beastie Boys vs Monster Energy Drink, is one recent example of this, cost the drinks label $1.7 million and putting them in the headlines for all the wrong reasons.

Reputation Damage And Unlicensed Music Usage

You may know this quote:

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Warren Buffett

One of the most high profile UK illustrations of this thought was Gerald Ratner’s infamous comment about the product lines of his eponymous jewellery chain:

“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, ‘How can you sell this for such a low price?’ I say, because it’s total crap.” Gerald Ratner, 1991.

This comment purportedly wiped £500 million from the value of Ratner’s company. Most recently, publicity surrounding the installation of software in VW diesel-engine cars that affected emissions testing has arguably caused significant damage to the brand’s reputation. This lead to the departure of senior executives and legal action against the company. The effect on sales and the company’s standing in the minds of potential car buyers may be profound.

What Does This Mean For Marketers?

Consumers are vocal. The prevalent “have your say” sense of entitlement leads the public to believe that the world wants to hear their opinion about everything including brands. Whilst as professionals we may not like this, it’s a reality that applies to the slightest transgression by brands, whether real or perceived.

In instances of unlicensed music usage, it’s not uncommon for the artists affected to use social media to berate the offending brand. This is often quickly amplified by their fans and so within hours the alleged offence may become a consumer media news story. Irrespective of the facts, the artist’s fans will almost certainly side with their idols and it’s likely that populist consumer media will follow suit. What follows can be a vitriolic consumer outburst and demands for a boycott of the offending brand’s goods or services. Of course this might blow over quickly, but it’s still highly undesirable. In contrast, there might be more balanced comment in the broadsheets or trade press on the precise legal position but many consumers won’t care about that. They’re drawn to the drama of their favourite artist being wronged by an evil corporation. It’s a classic David and Goliath story.

I’ve seen many examples where brands have been publicly castigated for perceived injustices against music artists. In some cases this was valid but in others not entirely so. The fact remains that the public, especially music fans, will almost always side with the artist and against corporations, irrespective of the facts. “Perception is reality” and how the brand is perceived to have behaved is what matters.

A recent development that empowers consumers to name and shame brands is the release of the .sucks domain. At the time of writing, URLs with this domain may be available to the public at a fraction of the price that brands might wish to pay in a defensive move. It’s another example of “people power” that can be unleashed should brands be perceived to be stepping out of line.

This is not just confined to unlicensed music usage but also ‘sound-a-likes’ too. While these instances may not end up in court, reputation damage can be significant with fans berating the brand for ‘ripping off’ their favourite artists and bands. Recent examples of this include Beach House vs. VW and Sigur Ros vs. various advertisers.

To summarise:

  • Unlicensed usage isn’t just about legal and financial risk
  • It’s also about reputational risk
  • Arguably a brand’s reputation and good will is one of its greatest assets

The above comment is a snippet from my book Music Rights Without Fights which provides a comprehensive insight into music licensing for brands, designed to help marketers avoid falling foul of music copyright law and incorrectly licensed music usage.

If you have any questions about the above post, please leave a comment below.