Question about buyouts

[bigbluebarry]

Lydia asked me to post this for her (us). She was recently contacted by someone about creating a piece of music that would be used as the background music for a group of advertisements. The client has expressed in a buyout of the music and wanted to know how much she would charge for that. They had already agreed to paying a set amount per minute of music, but this was before they mentioned this being a buyout.One of the questions we have is if we end up doing this as a buyout, does that mean we give up our writers' share of the song, or just the publishing, or does it depend on how the contract is worded?Anyone have any experience with this type of situation? Anyone wishing to discuss this via PM should probably send them to Lydia instead of me as she is the contact on this project.Oh yeah, here's the kicker. They just got back to her today and said that they want to have the finished product by a week from today! So, it goes without saying that time is of the essence in this situation Thanks in advance,- Big Blue

[coachdebra]

If what they mean by buyout is work-for-hire, then yes, you are giving up all rights to the music.

[crystallions]

May 23, 2009, 6:56am, coachdebra wrote:If what they mean by buyout is work-for-hire, then yes, you are giving up all rights to the music. Thank you for your response CoachDebra. I don't know if they mean work-for-hire. Unfortunately everything goes through a middle person so I am having a hard time figuring out what they are thinking. What I do know is...They have asked for a song that will be the "Theme Song" for this campaign and will be used in all the ads for the next 2-3 years. They want an agreement where they can use the song we write royalty free.I am considering giving them a couple of options. One where they would own all the rights and one which would be an exclusive license where they don't owe royalties for using it as long as it is synchronized with pictures or their words (for radio) but we still own the copyright for the song. Any thoughts?Thanks,LydiaPS. Thanks Big Blue for posting the question.

[coachdebra]

Well, I am certainly not the expert on this stuff - I'm sure the others will chime in shortly - it is a holiday weekend.Honestly - it sounds like they're trying to get a lot for nothing. I really recommend talking to an attorney about this who is familiar with the business, particularly advertising. Maybe someone on the list can refer an attorney?What you're saying sounds a bit fishy. And it can get even more complicated working through a middle-person. Perhaps the best thing to do is to have them write up a contract laying out what they're offering. Then you can show that contract to an attorney and perhaps make a counter offer if it doesn't work for you.Be careful of wanting the deal so badly that you sell yourself out for it. No one deal will make or break your career. So know what you want, know what your minimum is and be prepared to walk away if they won't meet it.John Braheny's book and the Brabec's book are both really good resources for understanding how this stuff works. Of course, I know you're on a deadline - so probably not a lot of time for reading. But for future reference.I'd also do a search on this forum for sync license, mechanicals and work-for-hire. I bet your answers are already here, somewhere.Your coach,Debra

[aubreyz]

May 23, 2009, 6:56am, coachdebra wrote:If what they mean by buyout is work-for-hire, then yes, you are giving up all rights to the music. Not as an absolute. Depends on the agreement and on whether or not you do your homework. According to ASCAP's policy:Quote:“As a condition of ASCAP membership, all writer and publisher members agree that, even in work-for-hire situations, the writer and not the employer will be paid the writer's share of ASCAP performing rights royalties. In addition, ASCAP's Articles of Association provide that, with only very limited exceptions unrelated to work-for-hire situations, writer's royalties "shall not be sold or otherwise disposed of."BMI has a similar policy, but the language is not as succinct. That's one reason I chose ASCAP over BMI, because I do a lot of buyout stuff. Royalty free does not necessarily mean performance royalty free, it depends on the wording of the agreement. Even though ASCAP protects the writer even in a work for hire situation, I won't ever sign anything that actual has that phrase in it. I guess an offer might be lucrative enough at some point to consider that, but hasn't happened yet.I will license music several ways in a situation like this. Basically they are asking for the rights to use this music in an unlimited way for a limited time period without paying any further sync or mechanical royalties. You can most likely keep all of the copyrights and publishing. Here's some examples:1. You grant an exclusive license for the use of the track worldwide and in perpetuity. This is the highest fee. To give an example, my basic per finished minute rate is $750 for limited use, the last unlimited usage track I sold was about $3500 for a :30 sec piece with :15 and :10 edits. And btw, this was for a regional TV network and they were very happy with the affordable price. Your mileage may vary.2. You grant an exclusive license for the use of the track for a limited time and/or in limited markets. For instance, I sold a jingle package to a business that only advertises in two markets. They have exclusive rights to it's use in those markets in perpetuity, but I can resale it outside of those markets. Or I recently did a deal where the client has right to unlimited markets and mediums but only for a year. Depending on the complexity of the track, rates might range from $750 to $3500 per finished minute.3. You grant a temporary license to use the music for a limited time in limited markets and mediums, non elusively. For example, I licensed some music for a client to do Radio/TV spots - they added web later, and there was another fee but I am free to use or publish that music at will. Rates are generally lower for this. I've gone as low as $150 pfm if it was easy, but try to stay in the $500 to $750 range. I basically look at this as getting paid to produce another library track.Hope that's not confusing, but make sure all you are giving away is the sync and mechanical royalties. I don't use the term buyout, but will use the term license in the agreement.HTH,Aub

[coachdebra]

Thanks Aub - glad someone more knowledgeable then me on this stuff weighed in!

[crystallions]

Thank you Debra and Aub. You have given me a lot to think about. I really appreciate it.

[suzdoyle]

Yep, what Aub said. If the buyout is for non-exclusive use, it is defined as "worldwide use, in all media, for perpetuity". Meaning they can use your music in as many ways as they'd like, without having to renegotiate licenses for each new type of use. Sort of a blanket -- "we can use it any way we want for as long as we want" kind of deal. Suz

[chriscarter]

^^^Just thought I'd second that for clarity's sake. A "buyout" in licensing means the production company pays you one fee and gets to use the work as much as they'd like in any production of theirs. Sometimes this can be limited to sequels and remakes of the original, and sometimes it can be limited to territories, etc. But it generally has nothing to do with copyrights.

[crystallions]

Thank you Suz and Chris for the additional info. I appreciate it. I realized reading everybody's advice that I really don't know enough to make a wise decision on what kind of contract to use or what to ask for so we are talking with an attorney on Monday (we got some extra days before it will be discussed). I'll let you know how things go.~ Lydia