Is this a normal offer for licensing a bit of music?

July 31, 2012 6:55 AM

A big media company wants to license a recording of my old band to promote an online role-playing game. Can you help me disambiguate the terms of the offer, and tell me if the money sounds standard?

Our band wrote, recorded, and self-released the song. The company wants to use it for "background instrumental (no vocals), up to full use within trailers, advertising and promotions, including excerpts and clips therefrom."

Then they say their offers are as follows: $1,500 for use "via the Internet only, worldwide, in perpetuity"; and $2,500 for "option for all broadcast media, worldwide, in perpetuity."

Question about the meaning: do you think that the $2,500 includes the $1,500? Or is it in addition (for a total of $4,000)?

Question about the money: is this offer pretty much normal for this kind of thing? I have no idea. (If it's relevant, the company is a worldwide household name, and the online game is also big.)

To be clear, we're not expecting to make a fortune here. I just want to check if this is standard fare for licensing a song forever. Any input would be appreciated. (I know, you are not my/our laywer.)

posted by Beardman to media & arts (11 answers total)

My experience in this area is extremely limited, but my understanding is that you've been given a lowball offer by a factor of 10 or so. But the deals I've seen generally start at the $20,000 for us in ads and include some limits as to number of clips/ads, etc...

As for the offer, if you can't tell if the $2,500 is extra or total, the offer needs to be rewritten.

You should really find an agent familiar with the video game market, and you're in a good position to get one as the agent is going to be guaranteed there is already some interest in your work. Their cut is more than worth your piece of mind you haven't been ripped off.
posted by bswinburn at 7:04 AM on July 31, 2012

use, not us.
posted by bswinburn at 7:04 AM on July 31, 2012

The $2500 offer includes the rights and terms offered for the lesser amount. I think the rate is okay if a bit low for perp. Make sure to include the term non-exclusive, so you can sell the song again. You don't need an agent for this. Agents sell stuff, lawyers review contracts. MeMail me if you want more specifics, as I work in licensing, etc and I kow some music licensing specialists.
And those huge offers come for well-known songs and well known bands--if yiur song got lots of airplay or is instantly recognizable, you can ask for more.
posted by Ideefixe at 7:21 AM on July 31, 2012 [2 favorites]

You definitely don't want to offer it in perpetuity. That means they can use your song for quite a lot of thing, forever. Offer it for a reasonable amount of time, with an option to re-evaluate it in 2 or 3 years or whatever. And make sure that the rights are only for use in promoting this specific product - you don't want them to be able to use it for any and all future endeavours that they're part of. IMO that's also a fairly small amount of money.
posted by Magnakai at 7:23 AM on July 31, 2012

Have to say that, as an occasional purchaser of music for advertising, it sounds low to me, too, though I won't go so far as to say "by a factor of 10".

To a certain extent, you're in the catbird seat -- you have original music, self-produced and self-published, so no third-party interests are represented in the deal. The video game company is hoping for a clean, simple, cheap, royalty-free buyout. The ambiguity of their offer suggests they may have left this purchase to a less-than-fully-experienced underling.

Were I you, I'd be reluctant to license both in perpetuity and exclusively. Counter with a reasonable term and limit usage to this game and its promotion. Review by a lawyer with license contracting experience would be a good idea.
posted by peakcomm at 7:29 AM on July 31, 2012

The fees quoted are reasonable for an unknown (i.e. not significantly famous) band's music licensing for a period of one year. Not in perpetuity.
posted by Aquaman at 7:35 AM on July 31, 2012

They will pass if you say you'll license for only 2 or 3 years, becuae it's not worth it to them to have to come back an renew so soon. Try 10 years or 25 if you don't want to go for perp. Or make a per second rate--$100 per second of the song, etc..
posted by Ideefixe at 7:41 AM on July 31, 2012

Thanks for the replies so far. One more piece of info: in case it's not obvious, we were indeed an obscure band. The company wants our song because, by historical accident, many of the game's original players were familiar with it, so it's kind of a gesture to the game's 'roots'.
posted by Beardman at 7:43 AM on July 31, 2012

For me, would look at this as a compliment and a nice way to gain an unexpected windfall from an endeavor that's no longer a going concern (you mentioned it was "your old band").

In your shoes, I would ask for the clarification that you're looking for on the amount. Once that was spelled out to my satisfaction and I was happy with the amount, I'd grant the perpetual license and be happy with the found money. :)
posted by DWRoelands at 7:49 AM on July 31, 2012

Remember that in the US with copyright, "perpetuity" is thirty-five years.
posted by 23 at 7:52 PM on July 31, 2012

I can't speak to the specifics of the language, but I can speak to the price: the fee for the Internet-only is reasonable, depending on what kind of online campaign they intend to run; the fee for the 'all broadcast media' option, however, is absurdly, insultingly low, regardless of whether it includes the Internet rights. It would not even cover the legal fees typically accrued in deals like this.

This is tricky without a lawyer; is there any chance the game company would be willing to pay for your legal fees as part of any agreement? (This is a not uncommon clause in many music contracts.)
posted by Tiresias at 1:21 PM on August 1, 2012