Music Placement Companies. Part 1

OOne of the many recent developments in the music business is the increasing presence of so-called “music placement companies,” also known as “pitching companies.” The sole focus of these companies is to represent indie artists, songwriters, and small indie labels for purposes of getting their music used in movies, TV shows, commercials, computer games, and elsewhere.

Editor’s note: This is an excerpt from the 4th edition of Music Is Your Business by Christopher Knab and Bartley F. Day, helping musicians with the business of music.

Until the mid to late 1990s, most music submissions for films, TV shows, etc. were done by the TV/Film departments of record companies and music publishing companies. But in the 1990s, record companies and publishing companies started downsizing, and many of the people who left those companies started their own music placement companies. Those placement companies are now competing for music placements with record companies and publishers.

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Today the music licensing market today is quite saturated, and not only because of the proliferation of music placement companies. Labels and publishers are now trying, more aggressively than ever, to replace the loss of income from record sales with income from other sources, such as licensing their music.

Despite this saturation, there are still many opportunities for you to place your music. The key is to educate yourself about that market and approach it as smartly and strategically as possible. Part of that process is to understand the options.

The Two Main Types of Placement Companies

Companies with Large Catalogs. These companies represent a large number of owners of recordings. They are able to provide a wide range of music to companies who are looking for music to use in productions. Usually the material can be previewed online.

One problem for artists with these kinds of companies is that it’s easy to get lost in the mix, since their focus is to provide access to a very large catalog of music, rather than to proactively promote a small number of artists.

Companies with Smaller Catalogs. These smaller companies represent a very limited number of artists. Their goal is not to provide a huge catalog of material, but instead to aggressively promote the relatively small number of artists they represent.

Whatever the company size, they will require you to sign an agreement spelling out your rights and theirs before representing you. I will refer to such agreements below as “Representation Agreements,” although different companies use different names.

Why Use a Music Placement Company?

There are several reasons to sign up with a music placement company.

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Relationships. Music placement companies, at least the better ones, have existing relationships and regular interaction with professionals like music supervisors, and film and TV producers. Because of those relationships, they’re much better able to make things happen than you might be able to do yourself.

And, just as important, they’re often able, because of their relationships, to find much better paying placements. The reality of music licensing is that there are many, many low-dollar licensing opportunities, and a lot fewer big-dollar opportunities. Often, you need to be represented by people with the right relationships in order to get a good shot at the big-dollar opportunities.

There are good reasons why those relationships are so important. For anyone who works on the staff of a film production company, TV show, or ad agency, one of the worst things that can happen is to acquire the rights to use music and find out later that there are legal problems with it – for example, to find out that the music contains uncleared samples. So, they prefer to deal with music owners or representatives they know and trust.

They also want to deal with music owners or representatives whose musical knowledge and taste they trust, so that if they put out a request for a certain type of music for a particular project, they don’t have to worry about receiving a lot of unusable or inappropriate submissions. The people who work on production staffs and at ad agencies, and music supervisors as well, usually work on very tight deadlines. They can’t afford to waste time on people who can’t quickly deliver the right material.

The reality is that in many instances, the music people on production staffs and at ad agencies have a short list of a relatively few “go-to” people. Often a placement opportunity becomes known only to those go-to people, since there may not be time for a wider search.

In short, if you can hook up with a company that has strong relationships with potential users of your music, you can benefit from those relationships.

Expertise. The good companies know how to proactively find the best placement opportunities. They also know how to submit the material in a way that will maximize the chances of successfully placing your music.

Leveraging Your Resources. It can take you a lot of time to find potential placement opportunities yourself and then submit material. This can easily distract you from doing other things that will move your career along.

Who Is the Competition for Music Placement Companies?

When seeking opportunities to place music in a film, TV show, commercial, or some other use, placement companies are not only competing with each other, but also with:

• Record companies
• Music publishers
• Music libraries
• Independent artists personally submitting their own material to potential users of music.

What’s the Difference Between a Music Placement Company and a Music Library?

Sometimes the terms Music Placement Company and Music Library are used interchangeably, but there are major differences.

Placement Companies represent music owned by you; typically the placement company will not ever own the music. There’s one exception: In some cases, a placement company will become contractually entitled, under the terms of the representation agreement, to future part-ownership of any particular musical compositions they’re able to license for film, TV, etc. (See the Co-Publishing section below.) You will still retain ownership of the sound recordings, though.

Music Libraries, on the other hand, will own the music you create. They will commission you, for a flat fee, to create and self-produce original music as “work for hire.” The musician acts as an independent contractor. The music library will own all copyrights in the recordings and the underlying musical compositions you create for them.

Music library music is usually referred to as “library music” or “production music.” Many of the larger music libraries are subsidiaries of major labels.

There are actually several different types of music libraries. In the past, the music owned by music libraries sounded very generic and formulaic. In recent years, though, library music has become much more competitive.

Payment Differences. There are major differences between how an artist/composer is paid under a Music Library deal versus a Music Placement Agreement.

With Music Library deals, you will ordinarily receive an upfront flat fee paid for your services in creating the compositions and recording. After that, the only money you will receive will possibly be the so-called “Writer’s Share” of future ASCAP/BMI income, i.e., income received from ASCAP/BMI whenever the film or TV show containing your music is broadcast. (ASCAP and BMI pay music publishers and composers whenever a film or TV show containing their music is broadcast. Half of the ASCAP/BMI income for any particular song is called the “Publisher’s Share” and the other half is the “Writer’s Share.”)

Not all Music Library agreements allow you to receive the Writer’s Share, but many do.

In any event, with Music Library deals, you generally won’t be entitled to a share of the future licensing fees and royalties the Music Library receives from third parties to whom they license your music.

With placement company deals, on the other hand, you receive a stated percentage share of:

• The future upfront (fixed amount) licensing fees received by the placement company each time they license your music for a project; and
• Any back-end royalties received by the placement company (for example, from the use of your music on movie soundtrack CDs).

The exact percentages are discussed in the Income Split section below.

With a placement company deal, you’ll also be entitled to the Writer’s Share of ASCAP/BMI income, and (sometimes) a piece of the Publisher’s Share of ASCAP/BMI income. Whenever you are entitled to the Writer’s Share or any part of the Publisher’s Share, try to make sure that you will be entitled to receive such payments directly from ASCAP/BMI, rather than indirectly through the placement company.

Read part two of this excerpt from “Music Is Your Business” here.

By Bartley F. Day, Copyright 2013. All rights reserved. The new, 4th Edition of Music Is Your Business has 100 pages more info to help musicians help themselves with the business of music.