This document discusses how songwriters can earn money from their original music through music licensing and acquisition. It outlines four key themes: ground rules regarding copyright; value as perceived by the music market; the various buyers and licensees of music; and the importance of making connections within the music industry. The document provides examples of how music is licensed for different uses and the potential revenue amounts. It emphasizes the need to understand copyright, valuation factors, target buyers' needs, and building relationships with music publishers and performing rights organizations.

1. Making $$$ with
Your Original Music
NAMM 2013 H.O.T. Zone
Presented by
Keith Hatschek,
University of the Pacific
www.hatschek.com
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2. Session Objectives
 Attendees will leave this session knowing:
 How music licensing/acquisition works
 What creates value to music buyers
 Who are the key players & their roles
 What steps are necessary to jump start opportunities to
profit from your songs and compositions
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3. ‹#›

4. Four Key Themes
 G = Ground Rules
 V = Value as Perceived by the Market
 B = Buyers, in most cases aka Licensees
 C = Connections, what you’ll need in addition to your
talent to develop opportunities to earn $$$
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5. Part One - Ground Rules
 Knowing music acquisition and licensing practices
allows you to be in the conversation
 Understanding © is critical for all writers
 In the beginning, there is copyright, the basis for getting
paid anytime someone wishes to use your original music.
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6. “Grenade” - Two ©
Sound Recording ©
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Song ©

7. Long & Strong . . . ©
 The copyright duration for a copyrighted song or music
cue is the life of the author/composer plus 70 years!
 By registering your song © with the US Library of
Congress (LOC), you gain maximum statutory
protection for your works while they are under copyright
- $35 per song to eFile
 “Puff Daddy Hit with $4.3MM Judgment for Unauthorized
Sampling of Ohio Players Song”
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8. Road Map to Revenue 1
TV Show Synch License
Grey’s Anatomy
Music Cue
One “Side” – Other “Side” –
Song © Holder Master ©
- Publisher Holder - Label
Revenue split Revenue % to
between pub. Recording
& writer Artist
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9. Road Map to Revenue 2
Background Music Service
“Yesterday” by
Lennon &
McCartney
Music Publisher –
Licensee – Mood End Service – In-
Northern
Media, aka store music for
Songs, Sony/ATV
Muzak retailers
Music
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10. Road Map to Revenue 3
Mechanical License
“Blank Page” by
Aguilera, Braide
& Fuller
Music Publisher End Product–
Licensee – RCA
– EMI April Lotus CD and
Records
Music downloads
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11. Road Map to Revenue 4
Work-for-Hire
“Central Avenue
Ford” – Jane
Smith, composer
End Product –
Music Publisher Work-for-
Licensee – N/A
– N/A Hire, one time
payment, $1,000
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12. Public Performance Royalties
Bonus Earnings - PROs
$2.5 Billion
annual
revenue
(US)
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13. Ground Rules Summary
Original Music
Middle Men
Buyer/Licensee
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14. Part Two - Value
 Value (noun) – 1. a fair return in goods, services, or
money for something exchanged 2. the monetary worth
of something, aka “market price,” that is a price actually
given in market dealings
 For original music, certain qualities will help determine
the relative value of each piece of music.
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15. Valuation Parameters
 Popularity/recognition
 Originality or Freshness
 Branding Needs
 Price/affordability
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16. Does Your Music
Fill a Need?
 Your original music has to fill one or more of the
previous needs, situations, parameters outlined in order
to be considered for license or purchase
 The only way to know for certain is to test your music on
persons working in this part of the business (Part Four)
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17. Talking Market Prices
 On the Low Side
 “Gratis” (free) license to use single song in video game in
exchange for on screen credit and link to band’s FB page
 Indie film project – classic rock song, 1 year license for
Canada, art house exhibition only - $500
 “Bumpers” on late night live variety show – major
network – short excerpt performed live from well known
pop song - $400 per use
 Instrumental theme song for local cable TV show – work-
for-hire, one time fee $500 - plus credit
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18. Talking Market Prices
 In the middle:
 The Voice – live performance of a song by a contestant up
to 1:05 in duration - $2100
 Video game (music centric) add on song available to
download to original purchaser of the game – 15% of
retail price of the download
 Parenthood TV show – use of a lesser known song by a
classic rock artist - $20K per “side”
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19. Talking Market Prices
 Higher and higher:
 Classic rock song used in major motion picture produced
by Disney - $50K per side; separate option for playback
use in theme parks, cruise lines, etc., $3K extra, per side if
exercised
 Jazz standard – master usage for retail chain covering
national TV, cable, in store, Internet for US and Canada –
1 year use - $50K (song rights cleared separately)
 Classic rock song used by major retail chain as audio
“signature” for 12 months TV, radio (40 TV and 85 radio
ads) - $400,000; option for second year would increase
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20. Defining License Fees
 How much of the song is needed?
 What is the audience?
 What territories?
 Term of license (13 weeks, one year, perpetuity) ?
 What forms of media are requested
(TV, Internet, radio, DVD, film, etc.) ?
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21. Other Factors
 How critical is this particular piece to the project?
 How popular is the song
or artist today?
 Are there other pieces that
would work just as well
and are more easily or
inexpensively available?
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22. Part Three - Buyers
 Who are the actual buyers that may want to use your
music in their product or service?
 Note – we’ll refer to buyers since a monetary transaction
takes place, but the usual terminology is “licensee.”
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23. 12 Buyers
Motion pictures Television Radio (terrestrial, Commercials (TV,
(theatrical, DVD, (broadcast, cable, web, cable, radio, film,
streaming, etc.) web) satellite) theatrical, web)
Video Games Broadway musical Record labels Live events
(ex. Green Day) (mechanicals) (sports, trade
shows, annual
meetings)
Sheet music Music libraries for Background and Special Products
publishers TV, film, sports, foreground music (music CDs or
etc. services (retail, downloads for
hospitals, music Hallmark,
on hold, etc.) Victoria’s Secret,
Cracker Barrel,
Acura, etc.)
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24. 12 Foreign Buyers
Motion pictures Television Radio (terrestrial, Commercials
web, cable,
satellite)
Video Games Broadway musical Record labels Live events
(ex. Green Day) (mechanicals) (sports, trade
shows, annual
meetings)
Sheet music Music libraries for Background and Special Products
publishers TV, film, sports, foreground music (music CDs or
etc. services (retail, downloads for
hospitals, music Tesco, Burberry,
on hold, etc.) Audi, etc.)
Songwriters will normally partner with a US publisher and various foreign subpublishers to leverage their songs overseas. ©
rules and conventions vary in foreign territories – essential to have expert advice or representation.
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25. Deadlines
 Time is money in TV, film and advertising production
 Licensing a song and master can be complex, esp. if
there are multiple “owners” in the © (see “Grenade”)
 Fewer people required to say “yes,” the more attractive
licensing your song & master may be
 Rise of “one stop” music licensing solution – one firm
administers the song and master ©
 Some artists are now working to hold on to both “sides”
to allow easier deal-making (Nettwerk, Concord, etc.)
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26. Part Four - Connections
 Connecting Buyers with Creators is the job of a varied
array of industry professionals – middle men
 To break into the licensing revenue stream, you must
build relationships with them
 They must affirm that your music has value (Part Two)
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27. Some Examples
 Motion picture middle men
 Music supervisor, music editor, sound editor or
designer, label A&R rep, PRO or publisher staff (song
plugger)
 Advertising middle men
 Advertising agency creative director or staff, commercial
director or editor, video post production team
 Recording artist, record label middle men (A&R)
 Record producer, recording engineer, studio
personnel, PRO or publisher staff (song plugger)
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28. Moving Forward
Three Steps to Success
 Join a national and a regional songwriting organization
 Benefits: conferences, workshops, webinars, 1-to-1
mentoring, co-writers, building your network, referral to
music licensing attorney, music supes, publishers, etc.
 Join a PRO – ASCAP, BMI or SESAC
 Benefits: help you learn, connect and earn money as your
songs are performed, mentoring, national and
international connections
 Join SoundExchange if you control master rights
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29. Moving Forward
 Start Researching Various Music Publishers
 Benefits: nearly all successful songwriters affiliate with a
music publisher to help maximize exposure and earnings
 Music publishers have many more writers interested in
signing than they can serve
 Not all music publishers are the same
 As you build your connections, ID the ones that best fit
you and your creative direction
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30. Wrap Up
 Ground Rules – you must know them to enter the field
of play and be taken seriously
 Value – understand what creates market value
 Buyers – they pay to use your music, study them, what
they use and learn how such deals come together
 Connections – pledge to connect now to songwriter
organizations, then begin to evaluate PROs and
publishers
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31. Resources
 Books
 Music, Money & Success – Todd and Jeff Brabec
 All You Need to Know about the Music Business – Don
Passman
 “Hey, That’s My Music” – Brooke Wentz
 Websites
 Nashvillesongwriters.com or Songwritersguild.com
 Westcoastsongwriters.org
 Hatschek.com
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