What Does Buyout Mean?

[michael11]

I know this subject has been covered loads of times before and tbh I haven't taken much notice because it never applied to me,I do need to know now and I've looked back at old posts but I don't understand them.

Could somebody give me an idiot's guide to Buyout's please.


My starting point is,I don't have a clue.


Michael

[jazzstan]

In general business terms it's the purchased acquisition of rights in an asset. The "out" usually means they are getting 100% of YOUR rights to ownership.

[mazz]

Often times, buyout means that they pay a one time fee for some limited or unlimited usage of the signed work without having to come back and renegotiate further license fees. This does not preclude their responsibility to file cue sheets when the music is used, if it's for broadcast purposes. The cue sheets are what determines your back end performance royalties, which they are not on the hook for, except for the filing of the cue sheets. You should NEVER sign away your performance royalties. Some companies don't understand how this works and they think they have to pay royalties, but often times, people confuse license fees with performance royalties. (The opposite of a buyout library is a needle drop library, where the client pays some license fee every time they use a piece of music from the needle drop library).

From what I understand, a small video production company may go to a buyout library and pay a blanket license for a certain number of CDs or a hard drive that contain hundreds of pieces of music. They are free to use the music in whatever productions they produce be it corporate in-house, wedding videos, etc. forever. Of course, if they start doing commercials or documentaries for broadcast, even on the local NBC affiliate or whatever, they would possibly need to negotiate a new license or at the very least file cue sheets. That broadcast license might be a separate license or might be included in the buyout license, as far as I understand it.

Matto is the guru of all of this stuff, hopefully he will jump on the bandwagon.

There's also lots of good information out there in the music business books listed on TAXI's website.

Also google "royalty free music library"

Cheers!

Mazz

[michael11]

In general business terms it's the purchased acquisition of rights in an asset. The "out" usually means they are getting 100% of YOUR rights to ownership.

Thanks Stan.


Michael.

[michael11]

Often times, buyout means that they pay a one time fee for some limited or unlimited usage of the signed work without having to come back and renegotiate further license fees. This does not preclude their responsibility to file cue sheets when the music is used, if it's for broadcast purposes. The cue sheets are what determines your back end performance royalties, which they are not on the hook for, except for the filing of the cue sheets. You should NEVER sign away your performance royalties. Some companies don't understand how this works and they think they have to pay royalties, but often times, people confuse license fees with performance royalties. (The opposite of a buyout library is a needle drop library, where the client pays some license fee every time they use a piece of music from the needle drop library).

From what I understand, a small video production company may go to a buyout library and pay a blanket license for a certain number of CDs or a hard drive that contain hundreds of pieces of music. They are free to use the music in whatever productions they produce be it corporate in-house, wedding videos, etc. forever. Of course, if they start doing commercials or documentaries for broadcast, even on the local NBC affiliate or whatever, they would possibly need to negotiate a new license or at the very least file cue sheets. That broadcast license might be a separate license or might be included in the buyout license, as far as I understand it.

Matto is the guru of all of this stuff, hopefully he will jump on the bandwagon.

There's also lots of good information out there in the music business books listed on TAXI's website.

Also google "royalty free music library"

Cheers!

Mazz

Thanks Mazz,very much appreciated,

Michael.