Sync Licensing: What to look out for

In a previous post on the state of the music industry [1], I explored some reasons for optimism despite the challenges facing the industry, including the diversification of commercial opportunities, technologies and potential revenue streams available to the spectrum of industry stakeholders. As part of this world of opportunity, many artists (and rights holders generally) have embraced sync licensing – the placing of a copyrighted composition and recording in audio-visual content, be it TV (whether via traditional broadcasting or on-demand streaming services like Netflix), film, trailers, adverts or video games.


The benefits of Sync

Sync is thriving and, thanks to services like Shazam, increasingly sophisticated. Think of the exposure garnered by the band, Jungle, in licensing their track, Busy Earnin’, for use throughout Amazon’s experiential campaign for its Fire Phone, or the centrality of music to many a Christmas ad to create a connection with the viewer. Or think of the beautifully curated and integrated playlists on shows like Peaky Blinders and Stranger Things, the significant role sync plays in the audience experience of popular reality programmes like Made in Chelsea and Love Island or movies like Baby Driver and Guardian of the Galaxy, or the real-world songs featured on the car radio in Rockstar’s award-winning Grand Theft Auto game series.

Sync licensing can be significant for rising and established artists alike (as well as composers, songwriters, the labels and publishers). If the right placement is made at the right time and in the right way, sync can be a potentially lucrative monetisation strategy for rights holders, as well as breaking or revitalising a track or an artist, raising profiles and enabling rights holders to reap the benefits of exposing the music to a new or wider audience.

The make-up of a sync licence

To use a track in the content it’s creating, a production company obviously needs to obtain the right to do so from the rights holder(s), e.g. the label and the publisher or songwriter. The foundation of the right to place a track is the sync licence agreement itself. Depending on the desired track and intended use, rights can be licensed through the clearance services offered by the likes of PRS for Music or directly from the rights holder(s).

Let’s take a quick look at some key topics to address in a sync licence:

  • The content: The track and the production in which it will be placed should be clearly identified.
  • Scope of licence: It’s key to set out the scope of rights being granted to the production company. In other words, what is the licensee allowed to do with the track and where and how is it allowed to do it? Set out what territory the track can be exploited in (typically worldwide for use in film and games so as not to frustrate exploitation and distribution, whereas use in TV shows and adverts is more commonly restricted territorially). Prescribe the media on which the content the track is placed can be distributed and exploited (the licensee, particularly for films, will want this as wide as possible, essentially covering all present and future media and platforms). Consider what other parameters and restrictions should be set on the use of the track.
  • Term: For film, TV and games, the licensee will want to expressly state that the licence continues in perpetuity (i.e. for however long the rights exist and are protected by law). For content like adverts, the term may be more negotiable and dependent on the intended run for the commercial (with the potential for renewal on the same terms for agreed fees).
  • Usage & prominence: If not the whole track, consider the length of the segment that may be used and where (i.e. in what context: as the title track or as background music in a specific scene).
  • Trailers: Address whether part of the track may be used in trailers, teasers, adverts and other promotional activity and publicity for the production in which it is placed.
  • Remuneration: The licensor is usually paid a one-off, upfront fee with the amount open to commercial negotiation and dependent on the artist, the track itself, the scope of intended usage and other rights and obligations of the parties. Outside of the contract (and not the responsibility of the licensee) there is also the prospect of a successful sync boosting the level of public performance royalties for the placed track.
  • Credit: Despite typically including a waiver of the rights holders’ moral rights in the placed track, sync licences should also expressly provide for a public credit in the production identifying the track, songwriter, performing artist and other rights holders.
  • Title & Rights: It is expected that the licensor warrant that it has the right to grant the rights to the licensee, and that the track (and the exercise of the licensee’s licensed rights in respect of that track) will not infringe a third party’s rights. Breach of such a warranty would normally be linked to a suitable indemnity.
  • Restrictions: The licensor will want to provide that the licensee cannot change or modify the licensed composition without its approval (e.g. changing the lyrics or tempo).
  • Termination: The licensor should be able to terminate the sync licence (and retain any fees paid) if the licensee breaches its terms (e.g. uses the track in a non-agreed manner). Careful thought should also be given to post-term obligations (e.g. can the licensee leave copies of old adverts featuring the music up on its website, YouTube channel etc. and, if not, has it set up a mechanism to remind itself to take them down).
  • Transfer: The licensee will want the express right to be able to transfer or sub-license their rights and obligations under the sync licence so as not to restrict exploitation.
  • Exclusivity: Typically, the sync is non-exclusive, i.e. there is no restriction on the rights holder licensing the track to others – but the licensee may want to consider this further if, for example, they intend to use the specific track as the title track.
  • Publicity: Consideration should also be given to including certain secondary obligations in respect of, for example, the artist participating in further promotional activity for the production in which their track has been placed, such as live performances, interviews, or attending premieres and award ceremonies.

As a final note, early engagement is crucial: work on music clearance and licensing should begin well in advance of the content’s go-live date.

[1] The Music Industry: The State of Play

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