This is a summary of our Sync & Mechanical Licensing Research Initiative Findings Report download the full report here:
What is the difference between a mechanical (or reproduction) licence and a synchronization (sync) licence?
A mechanical licence grants the licensee permission to attach or record a composition onto a physical entity, and the right to duplicate and distribute said entity.
Some examples of common usage examples include: CDs, records, cassette tapes, etc.
A sync licence grants the licensee use of a track of music for an audiovisual project, which is defined as anything that has a moving picture with music synced to it. This licence does not grant authority to use the master recording, but rather gives the licensee the right to access the documents of the composition (sheet music, lyrics if applicable, etc.), make a new recording or version of the original composition, and distribute the composition as part of an audiovisual project.
Some examples of common usage examples include: commercials, recordings of concerts uploaded to the internet, movies, video ads, etc.
Mechanical Licence Fees
Mechanical licence baseline fee standards are clearly specified and upheld by Performing Rights Organizations (PROs.). These fee structures are as follows:
SOCAN (Society of Composers, Authors and Music Publishers of Canada)
9.6 cents per work, per copy manufactured, with some additional conditions and fees depending on duration of piece
CMRRA (Canadian Musical Reproduction Rights Agency)
8.3 cents per work, per copy manufactured, where the playing is five minutes or less. Additional fees apply per minute beyond.
For example: a group has presented a concert featuring six of your works, and they would like to release a CD. That’s $0.096 x 6 x the number of CDs manufactured. If the group pressed 500 CDs, you would be owed $288 ($0.096 x 6 x 500)
Mechanical licences can be acquired easily through an application to organisations such as these that manage the mechanical licensing of their registered song libraries. If you are seeking to license your composition out independently, use these baseline standards to inform your agreements and negotiations. You may increase your fees to reflect the financial value that you have placed onto your work, but do not give out licences with fee rates below that of those outlined by SOCAN and CMRRA.
Sync Licence Fees
Unlike mechanical licences, sync licences do not have an expressly recognized baseline fee standard.
There are three key components of sync licence agreements:
- Licence Term: The length of the agreement
- How long will the licence be valid? A day? A year? A decade? In perpetuity? Etc.
- When exactly does the licence become valid? When does it expire?
- Licence Territory/Market/Area: Where the licence will be valid
- Will it only be permitted in a specified province? A country? A continent? On the internet? Any combination of these? etc.
- Scope and Purpose of Use: How the music will be used
- Will it be used as background music in a TV show “party scene”? A repeating theme song in a video game? Over a commercial? Over the final credits of a film? etc.
Each of these factors will have an impact on the fee associated with a sync licence. Prestige and notoriety of the composer will likely also have an impact on the associated fee rate.
How To Go About Sync Licensing
DIY Licensing
Navigating negotiations and weighing your options can be intimidating, but remember that the authority is in your hands. You hold the rights! If a potential licensee is attempting to negotiate your sync licence fee down to a level that you do not feel comfortable accepting, do not accept it. On some occasions, it may be more beneficial in the long run to decline an offer, and to retain the set value of your work instead of accepting compensation that is below your standard. This practice is supported by all the PRO administrators interviewed as part of this research. Giving in to lowball offers reduces the value of your work, and the work of other composers.
When possible, have non-exclusive agreements. Keep your compositions available for as many placements as possible. If a licensee wants an exclusive agreement, take that into account when negotiating the fee. As a licensee, you should expect to pay a higher fee for the exclusive use of a composition, even if it is for a limited amount of time.
When accepting fees upfront, ensure it is not a buyout of your rights and composition. Understand the proposed agreements in their entirety before signing anything and seek legal advice if you feel it to be necessary, or if you are simply unsure of any component within an agreement.
Find a fee payment structure that works for you and suits your needs. If you are independently licensing out your work, it is your responsibility to enforce it. Do not accept fee payment structures or licensing agreements that you are not comfortable enforcing.
Fee Payment Structure 1: A Single Upfront Fee
Generally, this fee structure is the most desirable method of payment. A lump sum fee is calculated, taking into account the three main components of the agreement discussed above (scope, territory, term), and it is then paid in full upon signing the licence agreement. The rights holder(s) are compensated immediately, and the licensee does not need to be tracked down in the future to follow up on any additional payments.
Fee Payment Structure 2: A Reduced Upfront Fee, Back-Ends Payments
This method is virtually identical to the first fee structure. The only additional factor is the inclusion of some back-end payments. We recommend this option only if the amounts and due dates for the back-end payments are negotiated and agreed upon prior to signing any agreements and issuing the sync licence.
Fee Payment Structure 3: No Upfront Fee, Back-End Payments for Licence
This method of fee structure payment is the least desirable option for the rights holder in a DIY sync licensing agreement. There is no upfront fee for the licence, and only back-end payments.
It was strongly recommended by one of the PRO administrators interviewed that this payment structure only be used if back-end payments are paid as advances.
For example, X acquires a sync licence from you for your composition and wants to follow this method of payments. They pay you only Y amount upfront and do not pay again until they have passed whatever threshold outlined in the agreement that would trigger a back-end payment. At this point, X pays you a second advance for all sync licensing until the next threshold, at which point X will pay the next advance. With this arrangement, you, the rights holder, are always ahead on the financial return for the licence. It puts the rights holder in a more advantageous position.
However, as a self-representative, it can be challenging, and sometimes impossible to track where the licensee is in terms of owing on their payments. Have they met the next threshold yet? Can they prove they have not? Can you prove that they have and now owe? Keeping track of and enforcing this type of agreement is tumultuous. We strongly advise against this agreement structure. It is included here to inform rights holders of the potential pitfalls of following this method should a potential licensee propose it.
Sync House Licensing
What is a Sync House?
Simply put, a “Sync” or “Music House” is a business that pitches the registered works of their membership to third parties for use via licensing agreements.
Not only is an entity promoting your work, their professional network is now your professional network. When you become a member, you give authorization to the Sync House to license your compositions to third parties. They may only license the compositions which you have registered with them
How do they work?
Music Publishers work at/with sync houses and actively seek to secure sync placements for their organisation’s catalogue. Producers and Music Supervisors come to them with song requests or inquire about song placement recommendations for their projects. It may be beneficial as a composer to work with an organisation like this as there is potential opportunity to have your work pitched to third parties. On some occasions they may also approach specific members for commission opportunities from third parties.
Some Sync Houses have membership fees, and some do not. Most Sync Houses operate solely on a licence commission basis. For every song they get placed with a third party, they take a cut of the upfront licensing fee. This cut ranges anywhere from 20-65% of the licence fee depending on the Sync House. All royalties collected by PROs go to the rights holder, they do not collect any of them.
When possible, have non-exclusive agreements with Sync Houses. This way, if you are approached directly by a producer or music supervisor who would like to use your work, you do not have to redirect them to the Sync House to acquire a licence. You can negotiate your own terms, and receive the entire payment for the licence – no Sync House cut. This practice is supported by all PRO administrators interviewed as part of this research.
Legal Resources & Best Practices
Regardless of purpose or profession, it is imperative to secure a licence for the use of another’s composition – or any other musical creation. Failure to comply and infringing on another’s copyrights may result in legal ramifications.
If you are unsure whether or not you need a licence for your project, contact a PRO.
If you are unsure where to secure a licence for your project, contact a PRO.
If you are unsure what type of licence(s) your project requires, contact a PRO.
Inquiries for SOCAN can be directed to rrlicensing@socan.com. Other PROs are listed below.
Resources are and can be made available to you to support your project through these types of organisations, while ensuring that the rights holders are fairly and appropriately compensated for their work.
If you would like to learn more about what Canadian copyright legislation looks like, how it works, what rights are included under the umbrella of copyrights, and its limitations, you can find it here: Copyright – Canada.ca
If you would like to learn more about the legal ramifications of copyright theft, you can find it here: Copyright theft – Canadian Intellectual Property Office
Please note that enforcement of intellectual property rights is the responsibility of the rights holder(s). If you suspect that your copyrights have been infringed upon, contact a lawyer who specialises in intellectual property, specifically copyright if possible.
Other Resources
PROs
SOCAN (Canada)
CMRRA (Canada)
RE:Sound (Canada)
ASCAP (United States)
BMI (United States)
SESAC (United States)
PRS (United Kingdom)
PPL (United Kingdom)
SACEM (France)
APRA (Australia)
(for a more complete, international list, click here)
Sync Houses
Artlist
Epidemic Sound
Jamendo Artists
Musicbed
Music Gateway
Music Vine
PremiumBeat
Songtradr
Soundstripe