By Todd Brabec, ASCAP Executive VP of Membership and Jeff Brabec
"Start Me Up" (Rolling Stones) for MICROSOFT and FORD
"Fly Like An Eagle" (Steve Miller) for the U.S. POST OFFICE
When an agency wants to use a hit song to advertise a product, they sign a license which allows them to do certain things during a specified period of time under certain conditions, with a termination of all rights after the agreement is over. The following explains some of the issues that occur during negotiations.
FEES: Fees paid to the songwriter and music publisher can range from over $1,000,000 for a major campaign and product to $10,000 for a local campaign.
COPYRIGHT OWNERSHIP: Ownership of the existing song is never transferred to the agency.
DURATION OF LICENSE: Usually 1 year for a national campaign plus a number of options (normally 1 to 3 additional 1-year options at the election of the advertising agency). As marketing campaigns take on many variations, however, the term requested by an agency can be for a day, a week, a month, a year, multiple years, or any combination thereof.
EXCLUSIVITY VERSUS NONEXCLUSIVITY: Unless total advertising exclusivity is requested, (no one else is allowed to use the song) the music publisher will not be restricted from licensing the same song to other advertisers during the duration of the commercial agreement.
PAYMENT OF FEES: Paid upon signing the agreement or within a short time, such as 10 days. Any option payments are paid upon the commencement of the option period or within a few days thereafter.
TERRITORY: The territory requested for a major advertising campaign is usually the United States of America, but depending on the potential consumer base for the product, Canada and other countries may also be included for additional fees.
MEDIA: Television and radio are the standard media requested, but depending on the thrust of the campaign, print, Internet and other media may also be included in the license.
© 2007 Todd Brabec, Jeff Brabec
For more information, check out the book Music, Money and Success: The Insider's Guide To Making Money In The Music Business (Schirmer Trade Books/Music Sales/502 pages) available for sale at Amazon.com, Barnes & Noble, Borders, Music Sales Group and www.musicandmoney.com.