Music industry veteran, Keith Hatschek, gives an overview of the world of music licensing including some examples of typical fees paid to use music in a variety of media. Presented Fall 2015 to McGeorge Law School students in Sacramento, CA.

1. Making $$$ with
Original Music
Presented by
Keith Hatschek,
University of the Pacific
www.hatschek.com
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2. Session Objectives
 Attendees will leave this session knowing:
 How music licensing/acquisition works
 What creates value to music buyers
 Who are the key players & their roles
 What steps are necessary to jump start opportunities to
profit from an artist’s songs and compositions
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3. Hitting a Licensing Home
Run
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4. Four Key Themes
 G = Ground Rules
 V = Value as Perceived by the Market
 B = Buyers, in most cases aka Licensees
 C = Connections, what you’ll need in addition to
artistic talent to develop opportunities to earn $$$
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5. Prelude - Role of
Counsel
 Artists love to create new art, many create commercial
art
 Business and legal advice is needed throughout their
career – most detest paperwork
 Example: Red Hot Chili Peppers
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6. Part One - Ground Rules
 Knowing music acquisition and licensing practices
allows you to be in the conversation
 Educating writers about © is essential
 In the beginning, there is copyright, the basis for
getting paid anytime someone wishes to use your
original music.
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7. “Grenade” - Two ©
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Song ©
Sound Recording ©

8. Long & Strong . . . ©
 The copyright duration for a copyrighted song or
music cue is the life of the author/composer plus 70
years!
 By registering your song © with the US Library of
Congress (LOC), you gain maximum statutory
protection for your works while they are under
copyright - $35 per song to eFile
 “Puff Daddy Hit with $4.3MM Judgment for
Unauthorized Sampling of Ohio Players Song”
 Thicke/Williams Face $7.4 MM Judgment for
Infringement 8

9. Road Map to Revenue 1
TV Show Synch License
The Blacklist
Music Cue
One “Side” –
Song © Holder
- Publisher
Revenue split
between pub.
& writer
Other “Side” –
Master ©
Holder - Label
Revenue % to
Recording
Artist
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10. Road Map to Revenue 2
Background Music Service
“Yesterday” by
Lennon &
McCartney
Music Publisher
– Northern
Songs,
Sony/ATV Music
Licensee –
Mood Media,
aka Muzak
End Service –
In-store music
for retailers
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11. Road Map to Revenue 3
Mechanical License
“Blank Page” by
Aguilera, Braide
& Fuller
Music Publisher
– EMI April
Music
Licensee –
RCA Records
End Product–
Lotus CD and
downloads
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12. Road Map to Revenue 4
Work-for-Hire
“Central Avenue
Ford” – Jane
Smith, composer
Music Publisher
– N/A
Licensee – N/A
End Product –
Work-for-Hire,
one time
payment, $1,000
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13. Public Performance
Royalties
Bonus Earnings - PROs
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$2.5 Billion+
annual
revenue
(US)

14. Ground Rules Summary
Original Music
Middle Men
Buyer/Licensee
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15. Part Two - Value
 Value (noun) – 1. a fair return in goods, services, or
money for something exchanged 2. the monetary
worth of something, aka “market price,” that is a price
actually given in market dealings
 For original music, certain qualities will help determine
the relative value of each piece of music.
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16. Valuation Parameters
 Popularity/recognition
 Originality or Freshness
 Branding Needs
 Price/affordability
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17. Does Your Music
Fill a Need?
 Your original music has to fill one or more of the
previous needs, situations, parameters outlined in
order to be considered for license or purchase
 The only way to know for certain is to test your music
on persons working in this part of the business (Part
Four)
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18. Talking Market Prices
 On the Low Side
 “Gratis” (free) license to use single song in video game
in exchange for on screen credit and link to band’s FB
page
 Indie film project – classic rock song, 1 year license for
Canada, art house exhibition only - $500
 “Bumpers” on late night live variety show – major
network – short excerpt performed live by house band
from well known pop song - $400 per use
 Instrumental theme song for local cable TV show –
work-for-hire, one time fee $500 - plus credit
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19. Talking Market Prices
 In the middle:
 The Voice – live performance of a song by a contestant
up to 1:05 in duration - $2100
 Video game (music centric) add on song available to
download to original purchaser of the game – 15% of
retail price of the download
 Parenthood TV show – use of a lesser known song by
a classic rock artist - $20K per “side”
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20. Talking Market Prices
 Higher and higher:
 Classic rock song used in major motion picture
produced by Disney - $50K per side; separate option
for playback use in theme parks, cruise lines, etc., $3K
extra, per side if exercised
 Jazz standard – master usage for retail chain covering
national TV, cable, in store, Internet for US and Canada
– 1 year use - $50K (song rights cleared separately)
 Classic rock song used by major retail chain as audio
“signature” for 12 months TV, radio (40 TV and 85 radio
ads) - $400,000; option for second year would increase
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21. Defining License Fees
 How much of the song is needed?
 What is the audience?
 What territories?
 Term of license (13 weeks, one year, perpetuity) ?
 What forms of media are requested
(TV, Internet, radio, DVD, film, etc.) ?
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22. Other Factors
 How critical is this particular piece to the project?
 How popular is the song
or artist today?
 Are there other pieces that
would work just as well
and are more easily or
inexpensively available?
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23. Part Three - Buyers
 Who are the actual buyers that may want to use your
music in their product or service?
 Note – we’ll refer to buyers since a monetary
transaction takes place, but the usual terminology is
“licensee.”
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24. 12 Buyers
Motion pictures
(theatrical, DVD,
streaming, etc.)
Television
(broadcast,
cable, web)
Radio
(terrestrial, web,
cable, satellite)
Commercials
(TV, radio, film,
theatrical, web)
Video Games Broadway
musical (ex.
Green Day)
Record labels
(mechanicals)
Live events
(sports, trade
shows, annual
meetings)
Sheet music
publishers
Music libraries for
TV, film, sports,
etc.
Background and
foreground music
services (retail,
hospitals, music
on hold, etc.)
Special Products
(music CDs or
downloads for
Hallmark,
Victoria’s Secret,
Cracker Barrel,
Acura, etc.)
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25. 12 Foreign Licensees
Motion pictures Television Radio
(terrestrial, web,
cable, satellite)
Commercials
Video Games Broadway
musical (ex.
Green Day)
Record labels
(mechanicals)
Live events
(sports, trade
shows, annual
meetings)
Sheet music
publishers
Music libraries for
TV, film, sports,
etc.
Background and
foreground music
services (retail,
hospitals, music
on hold, etc.)
Special Products
(music CDs or
downloads for
Tesco, Burberry,
Audi, etc.)
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Songwriters will normally partner with a US publisher and various foreign subpublishers to leverage their
songs overseas.

26. Deadlines
 Time is money in TV, film and advertising production
 Licensing a song and master can be complex, esp. if there
are multiple “owners” in the © (see “Grenade”)
 Fewer people required to say “yes,” the more attractive
licensing your song & master may be
 Rise of “one stop” music licensing solution – one firm
administers the song and master ©
 Some artists are now working to hold on to both “sides” to
allow easier deal-making (Big Machine, Nettwerk, Concord, etc.)
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27. Part Four - Connections
 Connecting Buyers with Creators is the job of a varied
array of industry professionals – middle men
 To break into the licensing revenue stream, you must
build relationships with them
 They must affirm that your music has value (Part Two)
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28. Some Examples
 Motion picture middle men
 Music supervisor, music editor, sound editor or
designer, label A&R rep, PRO or publisher staff (song
plugger)
 Advertising middle men
 Advertising agency creative director or staff,
commercial director or editor, video post production
team
 Recording artist, record label middle men (A&R)
 Record producer, recording engineer, studio personnel,
PRO or publisher staff (song plugger)28

29. Moving Forward
Three Steps to Success
 Have artist join a national and a regional songwriting
organization
 Benefits: conferences, workshops, webinars, 1-to-1
mentoring, co-writers, building your network, referral to
music licensing attorney, music supes, publishers, etc.
 Have artist join a PRO – ASCAP, BMI or SESAC
 Benefits: help you learn, connect and earn money as
your songs are performed, mentoring, national and
international connections
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30. Moving Forward
 Start Researching Various Music Publishers
 Benefits: nearly all successful songwriters affiliate with
a music publisher to help maximize exposure and
earnings
 Music publishers have many more writers interested in
signing than they can serve
 Not all music publishers are the same
 As you build your connections, ID the ones that best fit
your artists and their creative direction
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31. Wrap Up
 Ground Rules – you must know them to enter the field
of play and be taken seriously
 Value – understand what creates market value
 Buyers – they pay to use your music, study them,
what they use and learn how such deals come
together
 Connections – pledge to connect now to songwriter
organizations, then begin to evaluate PROs and
publishers
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32. Resources
 Books
 Music, Money & Success – Todd and Jeff Brabec
 All You Need to Know about the Music Business – Don
Passman
 “Hey, That’s My Music” – Brooke Wentz
 Websites
 Nashvillesongwriters.com or Songwritersguild.com
 Westcoastsongwriters.org
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