Why it’s in your interest to obtain a fair value for your sync license
by Joe Saba
[Disclaimer: The PMA in no way encourages discussion among its members regarding specific rates or pricing structures. We firmly believe each member company must act independently to set its own rates according to the demands of the marketplace.]
A potential client asks you: ‘How much to use your music?’
Most of us take into account factors such as audience size, the kinds of media in which the music will be used, whether there is the possibility of performance royalties, etc. and arrive at a value that we believe to be fair to both the user and the library.
However, for some libraries and composers, the answer to this question is either essentially – or in fact – “nothing”.
The Production Music Association believes that significant undervaluation of music is harmful and does great damage to our community. It sends a message that our music isn’t valuable. It hinders industry-wide growth and development. And in the long term, we believe it hurts the very composers and publishers who are underpricing in the first place.
A Real World Example
Some catalog holders – often small, new, or both – make the argument that it’s OK to eliminate or drastically reduce a sync fee to get a foot in the door, to have a shot at performance royalties or because they hope to raise rates later. While they may get that initial deal, we believe that a provider who essentially gives their music away will be harming themselves over time.
Let’s look at what happens when Library A grants Broadcaster B an annual blanket license for, say, $5. Immediately, the library has devalued not only the worth of their catalog, but production music in general.
The Price Isn’t Right
First of all, they have probably locked themselves into a minimal rate well into the future because we all know how difficult it is to get someone to pay for something they previously had for free. In addition (and no matter how optimistic Library A is), the fact of this rate will likely not be confined to Broadcaster B, but will spread to any client referrals by Broadcaster B as well as travel with any producer or editor who works with Library A and leaves for another company. At best, getting to a fair value for their music is an extraordinary uphill battle; at worst, their prices may never recover.
The existence of this rate also now has a direct impact on our community, because any other library wishing to license music to Broadcaster B now has to answer why they, too, won’t give away their music for free. Once a user has taken advantage of someone selling their music short, that rate immediately becomes the new standard for that user.
How Much for Your Reputation?
Secondly, Library A has minimized the value not just of its music, but also its reputation compared to its competitors.
Rightly or wrongly, when someone offers something for free that others are charging for, the first response is often ‘What’s wrong with it?’ Perhaps it’s of poorer production quality or an old catalog that’s been repurposed? Maybe there’s a lack of good search tools or a great website?
Also, if the upfront money is so small, users may worry about the long-term viability of a company – wondering ‘how can these guys stay in business?’ or ‘how are they going to constantly update their library with good material?’
Again, deservedly or not, users have certain expectations based partly on price, and a “super crazy discount” can have a definite negative impact on how your music is perceived.
There’s a reason that successful libraries (many of them PMA members) are able to consistently charge a fair price for their work year after year. Most basically, they provide a level of musical quality and professional service for which users are willing to pay something of value. This in turn generates the revenue to invest back in their companies to create great new music and develop new services. All of which makes their clients happy and provides for their futures.
And Look Where It Gets You In the End
Finally, giving away the sync in order to capture some back end from ASCAP/BMI/SESAC may also turn out to be counter-productive, for two distinct reasons:
First, once nominal sync fees become the norm for a broadcaster, it becomes in their interest to sign up as many catalogs as it can. Why wouldn’t, for example, a syndication producer want have access to 100 companies’ works for $100? At this point Library A may find itself crowded out of the back end performance by the sheer number of newcomers and be left with nothing up front and almost nothing on the back end.
Also, in the long run, a minimal sync valuation provides broadcasters and others with ammunition for reducing performing rights fees. The broadcaster’s argument here goes something like this: if production music companies are comfortable with diminished sync, then clearly they’d be OK with diminished performance as well. It must not cost them anything to create the music, what with music creation software now installed for free on many computers.
Of course, the PMA disagrees with this logic, but the argument has and will be used by broadcasters and others when negotiating with the PRO’s.
The Bigger Picture
The last decade has been a remarkable time for the production music community. Our industry has gained enormous credibility, with many of the biggest names in the music business active in the library world. Production standards have skyrocketed (some discs feature 100-piece orchestras with 80 person choirs), raising the bar for everybody. And although the number of libraries has multiplied, so too have the number and kinds of customers for our music. Many, many libraries are doing very well, both creatively and economically. Our clients have come to understand that collectively we offer music of a very high standard and they are willing to pay reasonably for it.
Giving away music for free places all these kinds of successes at risk. It shrinks the pie available to everyone, including yourself.
Remember that by placing real worth on your sync license, you are telling users your music has value, protecting your reputation and strengthening yourself and the production music community for the future.
The PMA is committed to providing crucial leadership to protect the value of our work and create an even better future for our community. If you have thoughts on these issues, we’d love to hear from you. For more information, please visit our website at www.pmamusic.com or contact our Executive Director, Debra Krizman, at [email protected]
Joseph Saba is a composer, co-owner of VideoHelper, Inc. and a founding member of the Production Music Association.