What do you do when someone comes up to you and say they’re interested in licensing one of your songs?

How much should you charge for the song?

Do you need to sign a contract?

What kind of contract?

Who writes it?

Do you need a lawyer?

These are huuuge questions that I often get asked by musicians who get their first licensing opportunity outside music libraries.

So here are my thoughts on the subject.

You’ve got 2 options.

Strategy 1 For Newbies

Best for….

People who don’t have time to handle lots of admin work, are not comfortable negotiating and/or are worried about messing up license agreements.

What’s the strategy?

Setup your tracks on a licensing platform like AudioJungle or Songtradr and, whenever you talk to someone about licensing your music, refer them to that page.

If someone asks if they could license your music, send them to that page.

When you reach out to someone hoping they license your music, include a link to that page.

You’ve got only ONE THING to focus on: get potential customers to that page.

What’s the downside?

You have to give a cut of the sync fee to the platform.

That means if the customer pays $100 to license your song, the platform you use may keep $15-$50 depending on their terms & conditions.

That may seem like a lot but….

What are the benefits?

The platform offers a standard price structure that makes it super easy for the customer to purchase a license right there and then, download the tracks and be done with it.

That is GREAT to improve your customer conversion rate, i.e. get more leads to buy.

In addition, you don’t have to worry about setting up a website of your own, paying for hosting, writing up contracts or negotiating fees.

The platform will take care of all the admin work for you and you won’t have to invest a dime upfront.

All you have to do is get people on that page.

And that’s plenty of work already 😉

Strategy 2 For the Brave

Best for…

People who have a little bit of experience negotiating and are confident they can draft a contract that holds up in court.

What’s the Strategy?

When someone makes a licensing request for your music, start acting like a publisher:

Step 1 – ask questions about the project, understand what you’re working with;

Step 2 – look at what others are charging in similar situations;

Step 3 – fix the price based on what you’ve found out in steps 1 and 2.

We’ll go into more detail of each step in a minute but first….

What’s the downside?

It’s (a lot) more admin work and you need the expertise and/or a lawyer to check those contracts.

Pro tip – Many lawyers offer a free first consultation. You can also apply for free legal assistance through the Volunteer Lawyers and Accountants for the Arts website.

What are the benefits?

You keep all the money and, provided the negotiations are not too strained, you have the opportunity to talk to customers and build stronger relationships ???

How to Figure Out the Right Price

For every new project you work on, there’s a bunch of questions you should ask yourself and your customer before you name a price and close the deal.

The more information you have about the project, the more you can negotiate a price that’s fair and acceptable to both parties.

Asking the Right Questions

And lots of them!

Am I making custom audio or licensing an existing song?

For custom audio, you’ll probably negotiate a work-for-hire deal. Make sure you’re clear about how potential tweaks and edits will be handled.

If you’re licensing existing songs, you’ll have to draft a sync and master use license agreement with the list of songs being licensed.

I’ll write a post about contracts another time. If you have specific questions on the subject, let me know.

What’s the total budget of the project the song will be used in? Who’s buying?

1-3% of the total film budget is pretty standard for the music, assuming you’re scoring the whole movie.

However, working on a student film where nobody gets paid is not the same as working on a big budget or a festival-oriented indie movie.

Pro tip – Exposure promises are usually broken. There’s no good reason for you to work for free if actors and other technicians are getting paid.

Is the customer buying out my copyrights?

If the customer owns the composition and sound recording, you won’t be able to earn backend royalties if the project has huge exposure down the line.

This is your one big opportunity to make money from that song, make it count!

Is the customer paying for an exclusive license or will I be free to place this song in other projects?

If the customer has the exclusive right to use one of your songs, then you can’t license it to anyone else.

That’s an opportunity cost for you. That too has a price.

Will the song be on national TV or a small local channel? Will it be used worldwide or just in Canada? How long is the deal? How many times will the song be played? How often?

The answers to all of these questions will influence how much you can charge.

The more a customer wants to use a song and expose it to a large audience, the more they value the music.

The more they value the music, the more you can charge.

Will the song feature prominently or not? Will it be played in full or not? Is it a hit already or completely unknown?

Instrumental music that plays in the background tends to be more generic than a song performed by an actor on camera.

If your track can fairly easily be replaced by another without making the project worse for wear, then your bargaining position isn’t super strong.

That doesn’t mean you should be cheap or work for free, it just means that you can’t charge the highest rate on the market.

Quoting the Right Price

This is tricky.

Here’s my approach.

Pricing and Negotiating

 

1. Research the market. Find out the price of things by looking at….

  • Songtradr’s pricing tool and what other music libraries charge
  • Offers on Stage32
  • The forum on the Music Library Report website
  • Past projects
  • More experienced friends
  • Google

2. Decide what price you’d be happy with, taking into account….

  • Market research
  • Opportunity cost
  • Initial offer

3. Negotiate

  • Use market research and your personal situation to ask for more if you feel that’s fair.
  • Don’t assume anyone is trying to low-ball you. Be open and listen to arguments in good faith.
  • Equally, don’t let yourself be fooled by “exposure” talk. If people are getting paid on the project, you should get your fair share.

Sometimes, someone will come in and ask you to quote them a price.

If you’re dealing with someone who’s more experienced than you, I recommend being open about your relative inexperience and asking them to make an offer.

When you do your research afterwards, you’ll get a good idea about the person you’re dealing with based on that initial offer they made.

If you’re dealing with someone who doesn’t have any experience with sync licensing and just wants to find out what your price would be, I recommend going through steps 1 and 2 before quoting a price.

In both cases, you’ll have asked all the important questions we talked about earlier of course 😉

Dealing With Pushback

Remember you don’t have to work for free and you don’t have to license your music for less than you’d like to.

Take the time to decide what price would feel right BEFORE you start negotiating.

The more research you do on the market, the more confident you will be at the negotiating table.

By the way, you’re also 100% free to price yourself above the market.

If the market says $500 but you feel the amount of work you’re going to have to put in the project is worth more, don’t hesitate to ask for more.

Or maybe by accepting that particular project, you evaluate your opportunity costs at $1,000. If that’s the case, pass.

You should only sign a deal if you’re comfortable with it.

If someone doesn’t want to pay what you think you’re worth, there’s no point moving forward with the project.

At least one of you is bound to feel resentful otherwise.

Now What?

Get organized and get started!

Signup to the Creative & Productive Library and grab your summary checklist (reference CP019).

It’s free and will help you stay on top of things.