Beyond the Music License

March 28, 2017

Advertisers often use music in their campaigns to connect better with consumers. Sony/ATV Music Publishing and Fiat Chrysler Automobiles discussed the basics of music licensing and the ways marketers can work with music labels to further enhance their brand-building campaigns.

ANA Law Conference attendees: Scroll down for CLE materials

Music Licensing 101

There are several kinds of copyrights involved in music licensing. First, there is the copyright on the underlying musical work composition (the notes and lyrics). Then there is the sound recording of the underlying musical work. There is a copyright to the recorded performance of that work separate and distinct from the copyright to the underlying musical work. A sound recording is a particular rendition of a song by an artist or a group of musicians. There can be many different sound recordings of a musical work, each with a different copyright owner but all derivative of the same underlying musical composition.

Sound recordings are owned and controlled by the record label that commissioned the recording. The underlying musical work/composition is owned and controlled by the songwriter and music publisher (or its designee). Each of these different owners has the exclusive right to separately exercise the bundle of rights granted under copyright law in the material that they own. If a company wants to exercise any of those rights in a sound recording, it needs permission from both the publisher and the record label.

Three licenses are typically needed for advertisers to use audiovisual content in their campaigns: a synchronization (sync) license, a master license, and a public performance license. First, advertisers need to obtain the sync license from the publisher(s), which gives permission to use the musical composition of the piece. Then advertisers must obtain the master use license from the record label, which gives the advertiser the permission to use the actual sound recording. If the campaign will be shown to a larger audience, a public performance license is needed from a performing rights organization. In addition, if the musical recording was done through the American Federation of Musicians or SAG-AFTRA, advertisers may need to pay a reuse or residual fee.

Chrysler and Sony: Music Licensing in Practice

For one of its Jeep campaigns, Chrysler wanted to use the iconic song This Land Is Your Land to announce the internationalization of the Jeep brand. But when Chrysler went to obtain the sync license, the publisher (the Woody Guthrie Foundation) had issues with how the song was used in the car commercial. This meant that Chrysler had to go back to the drawing board and develop new creative that was acceptable to the publisher. Since Chrysler was not going to use the original Woody Guthrie recording, it needed to obtain permission to rerecord the song with another artist. Sony was able to provide a list of emerging artists that fit Chrysler’s brief (a singer with a gravelly voice) to audition for the role. The final choice was made by Chrysler’s CMO. Ultimately, Sony was the one to own the sound recording, which was added to the growing collection of covers that Sony has the rights to, making it a great one-stop shop for advertisers looking for campaign music.

To celebrate its “Four by Four” campaign, Chrysler created its own song about freedom and the spirit of a 4x4 vehicle. Chrysler’s agency began writing the song, but then Sony jumped in to help tweak and record it. There were many different agreements and licenses that needed to be obtained for this project, including:

  • Pro tunes license
  • Music rights purchase agreement
  • Assignment of partial interest
  • Sync license
  • Master use license
  • Master rep agreement

The rights to the underlying composition of the song are shared by Sony and Chrysler, since both parties collaborated to create it. Four by Four was a huge hit; it became the most Shazammed ad spot in the 2016 Super Bowl, and it was even licensed out to Fox News to use in one of its segments.

Q&A with Susan Arnold, VP of Strategic Marketing and Commercial Music Group at Sony/ATV Music Publishing; Amanda Conti-Duhaime, Lead Counsel of Advertising, Marketing, and Promotion at Fiat Chrysler Automobiles; Gina Reif Ilardi, Partner at Jenner & Block LLP

Q. What are the pressure points for Sony to put together deals for advertisers, apart from price?

A. It really depends; it can be different every time. If we’re in negotiation with a brand, we’re really trying to nail down an appropriate fee. Much of the decision-making process comes down to how the advertisement might reflect upon the music or the songwriter. There are certain categories that some songwriters or publishers will not allow their work to be used in.

Q. What is the agency role in these deals?

A. We’ve moved away from having the agencies do the direct deals with record labels and publishers because negotiating for ourselves helps to maximize our budget and also helps prevent us from overbuying.

Q. Who pays the guild fees?

A. The agency does.

Q. What are the benefits of a brand building a better relationship with a publisher?

A. For the brand, it allows for broader exclusivity, the ability to make changes, to find a song strongly identified with the brand, and to avoid approval issues. For the publisher, building that strong relationship helps it become a trusted partner and the go-to source for music licensing help.

Q. What impact do you think the increased use of YouTube and other content platforms has had on sync licenses?

A. I think it’s increased the amount of activity. Because the sale of phonorecords has declined, artists and songwriters are looking for sync fees to fill that space.

Additional Materials for CLE Credit

"Beyond the Music License." Susan Arnold, VP of Strategic Marketing and Commercial Music Group at Sony/ATV Music Publishing; Amanda Conti-Duhaime, Lead Counsel of Advertising, Marketing, and Promotion at Fiat Chrysler Automobiles; Gina Reif Ilardi, Partner at Jenner & Block LLP. 2017 ANA Advertising Law and Public Policy Conference, 3/28/17.

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