Music Licensing Case Study Key Take-Outs for Brands

Presented by Richard Kirstein, Founding Partner, Resilient Music LLP

Client : SABMiller Brand : Peroni Nastro Azzurro Agency : The Bank Campaign : Storie Di Stile Licence Start : April 2013

The Brief

•  Need for TWO music tracks:

•  (1) Short filmic orchestral score : “Poverty” – Ennio Morricone

•  (2) Iconic 1960s song : “Always Something There To Remind Me” – Sandie Shaw

•  Specific choices, no back-ups

•  2 year cinema campaign

•  2 year online campaign

•  Staggered market starts

•  No advance decision by markets (unclear media plan)

•  Consider multiple market options vs. global deal?

•  Negotiating from November 2012

•  Licence start May 2013

Resilient was invited by SABMiller to help broker music licences against a backdrop of the following challenges:

The Challenges

•  Complexity with estates of deceased songwriters (longer clearance process)

•  Holding fees demanded by music publishers (long lead time from request to license start)

•  Fee uplift for product exclusivity

•  No flexibility for single market options

•  Need for tight media definitions

•  Need to separate on & off line media

The Rights Position: Two Separate Rights “Publishing” & “Master”

Copyright in the Composition & Lyrics “Publishing Rights”

Copyright in the Sound Recording “Master Rights”

MASTER RIGHTS

Copyright in Sound Recording

•  Performed by Sandie Shaw •  Recorded in the UK in 1964

•  Record label : Union Square Music (USM) •  USM license “Master Sync Rights”

•  41 session musicians on recording •  Musicians Union license non-featured

“Performers Rights”

“Always Something There To Remind Me”

PUBLISHING RIGHTS

Copyright in Composition & Lyrics

•  Music composed by Burt Bacharach •  Lyrics written by Hal David

•  Two Music Publishers : •  Universal Music Publishing (50%) •  Warner Chappell (50%) •  Both license “Publishing Sync Rights”

The Rights Position: Two Separate Rights “Publishing” & “Master”

MASTER RIGHTS

Copyright in Sound Recording

•  From “Once Upon A Time In America”

Original Sound Track •  Performed by Ennio Morricone & Orchestra •  Recorded in Italy

•  Record label : Discord •  Discord license “Master Sync Rights”

•  Orchestral session musicians rights bought out at time of session

“Poverty”

PUBLISHING RIGHTS

Copyright in Composition

•  Music composed by Ennio Morricone

•  Published by Warner Chappell (WC)

•  WC license “Publishing Sync Rights”

The Rights Position: Two Separate Rights “Publishing” & “Master”

The Music Licensing Process For “Above The Line” (ATL) Campaign (TV, Cinema, Radio)

Identify Rights Owners Clarify Usage

Term

Markets

Media

(Product) Exclusivity

Options: Extend Term

Options: Extend Media

Options: Extend Market

Calculate Offers

Collate into Deal Memo

Approval Party Chain

Submit Offers

Most Favoured Nations

Negotiate Fees

Reconfigure Options

In principle agreement

Sent to approval parties

Further Negotiation

Full Approval (STC)

Rights Owner Templates

Long Forms Issued

Review& Mark-up

Capped Indemnity

Liaison with Client Legal

Execution

Pay Licence Fee

Media Requirement

Negotiating Commercial Terms

Payment & Long Form Licences

The Outcome

•  Distilled clarity of required usage from multiple client & agency information feeds

•  Devised multi-market options, each with multiple term options

•  Diplomatic persistence with UK licensors (dealing with difficult US rights owners)

•  Successfully broke Most Favoured Nations relationship beween label & publisher

•  Coordination between client marketing, legal, accounts payable (for licence

compliance)

•  SUMMARY – Successful cost & risk management

Tips & Takeouts

•  Start early

•  Have hero tracks and back-ups

•  Secure up-front media schedule

•  Have a walk-away position on fees

•  Geolock online where possible

•  Pay licence fees prior to 1st Transmission

•  Licensor T&Cs may be non-negotiable

•  Licensor indemnities will be capped at sync fees

Find Out More…

•  To find out more about how Resilient can help you buy your music smarter, please

call Richard on 020 3137 0324 for a free 1 hour consultation.

CALL 020 3137 0324

Email: Richard@resilientmusic.com