Licensing music for your online ad – how much will it cost?

This post originally appeared on Monster’s Blog. It has been edited slightly for clarity. Note that some of the information below may be out of date.
spokesmonster blog header

Recently I created an animated ad for a local group-buying website. My company built the website in partnership with a local yellow page publisher.

As I finished the rough draft of the animation, I didn’t worry too much about the soundtrack. I figured our partners would want to make some changes to the voiceover copy. I went through my iTunes library, popping various jazz tunes into the background, and settled on a 1944 instrumental version by the King Cole Trio of Cole Porter’s “What Is This Thing Called Love”:

I put the ad up on YouTube and sent the link to our partners for feedback. We heard back that they liked it just as it was. They instructed us to make the video publicly available on the website.

Now I had a conundrum. Because this version of the ad wasn’t really intended for public consumption, I hadn’t bothered to purchase the rights to the song. In order to fix the situation, I had to figure out how to license this piece of music.

You’d think that, with all these little companies (like us) churning out low-budget ads for YouTube, there would be lots of how-to guides available online to explain the process for licensing music. There are a few, but none of them answer the two most obvious questions:

How long is this going to take, and how much is it going to cost me?

First, some terminology. If you want to use a recording of a song in an online ad, you need to acquire two separate kinds of rights.

1. You need to license the song itself – that is, the intellectual property – from the song publisher. There are two main kinds of licenses available.

a) Mechanical license, which covers the manufacturing of CDs and such. You probably don’t have to worry about this one. What you need is a…
b) Synchronization license, which allows you to synch the song with moving images.

2. Additionally, you need to license the particular recording of the song, usually from the record company that released it. This is called a master use license, presumably because back in olden times you needed to borrow the actual master recording in order to make a copy.

Master Use License

I started by attempting to acquire a license for the recording by the King Cole Trio that I wanted to use.

Unfortunately, there is no central database where you can find out who owns the rights to a recording. You just have to poke around the internet and figure it out for yourself.

I was dealing with a pretty famous act, so it didn’t take long. On this Nat King Cole discography page I found that the record in question was cut in 1944 for Capitol Records. A little research revealed that Capitol, along with its song library, is now owned by EMI. Luckily, EMI has a fairly comprehensive online database where you can search and listen to (theoretically) every song in their library.

Except “What Is This Thing Called Love”. Many of Nat King Cole’s recordings from the mid-’40s are in the database, but not that one.

So on a Friday afternoon I called the Senior Vice President at EMI Music Publishing Canada and left a voicemail asking if she knew whether EMI owned the rights to this old Nat King Cole tune. She phoned me back on Tuesday and shared her email address so that I could send a more detailed request.

I emailed her first thing Wednesday and got a reply Thursday from Tonya, a Vice President at EMI’s licensing department in Hollywood. Tonya confirmed that,

EMI Recorded Music represents the above referenced master. Please advise how long the ad would run, i.e. 6 months, 1 year, etc. What is your price range please? We’ll do our best to work within your budget, this sounds like an interesting usage.

So I emailed back to explain that the ad wouldn’t really “run” for any particular length of time – I mean, it’s on YouTube, so it’ll be there forever, right? I said the ad would be embedded on the group-buying website for an indefinite period of time, presumably until they decided to redesign their site.

As for the budget, I went on, if this particular recording costs too much, Plan B is to buy some cheap royalty-free music from a stock music website for a hundred bucks or so. I concluded,

The video is about a minute long. There’s voiceover obscuring the music for virtually its entire length. So you can see why we can’t invest much in this. I love the song and it fits perfectly, but a generic up-tempo jazz piano tune would work nearly as well.

Sent off the email and waited.

Sensing that I had erred by being too vague, a week later I sent Tonya another message:

I’m afraid I avoided your question when you asked what my budget was. If it moves the conversation along, I’ll name a figure: $150.

If that’s insultingly low I apologize, but please reply with a ballpark figure that would be acceptable. As you can probably tell, this music licensing business is new to me. It would be nice to know, for future reference, whether I should attempt to pursue the rights to songs by well-known performers or just settle for cheap knock-offs from royalty-free music sites which are, at least, explicit about their pricing.

More time passed.

Synchronization License

Meanwhile, I was working on the other half of the song licensing equation.

This was a lot easier. In Canada, the rights holders for most songs can be hunted down via the Canadian Musical Reproduction Rights Agency, the CMRRA, which (to quote their website) “represents the vast majority of music copyright owners (usually called music publishers) doing business in Canada.”

When you look up Cole Porter’s “What Is This Thing Called Love” in the CMRRA database, it tells you that Warner Bros. holds the rights.

(But notice the disclaimer at the bottom of the page:

This entry is for MECHANICAL licensing. The publisher names listed above may or may not also reflect the ownership of this song with respect to SYNCHRONIZATION licensing. Please contact CMRRA for further details about any territorial limitations for synchronization licensing purposes.

Oh, well. At least in Canada there’s a single place, the CMRRA, where you can go to enquire about mechanical and synchronization licenses. In the States, while all mechanical licenses are handled through the Harry Fox Agency, its website helpfully informs us that:

The Harry Fox Agency, Inc discontinued synchronization licensing services in June 2002. However, you may secure synchronization rights by contacting the publisher directly. You can search for publisher information using databases made available through the following third-party websites…

So have fun with that, my American friends.)

I sent a message to the CMRRA asking how much it would cost to acquire a synchronization license for the song, and inside an hour received a reply saying I should get directly in touch with so-and-so at Warner/Chappell Music, the publisher. After a couple quick messages back and forth, my request was forwarded to a young man named Brandon in the International Licensing department at Warner/Chappell in Los Angeles.

Within hours, Brandon emailed back to ask for my phone number and,

In the meantime, can you please send me the details of your intended use: product / term / website / storyboard / script / budget etc.

I replied the next morning with a link to the website, explaining that the video had gone live accidentally “as a result of miscommunication”. I added that our total budget for music licensing was only a few hundred dollars.

Brandon called me back that afternoon. “A few hundred dollars,” he said, “is not going to happen. For a big name songwriter like Cole Porter, for the type of usage you describe, an international license would run somewhere in the neighbourhood of 15 grand. And I’d still have to clear that with the Cole Porter estate.”

15 grand. Suddenly I understood why the lady from EMI hadn’t bothered to get back to me. I guess to her I’m like some yokel who wanders into the Jimmy Choo boutique on Rodeo Drive and asks to see their selection of Crocs.

I was a little shocked when Brandon dropped that $15,000 figure on me. Not so much by the amount, but by the fact that an online ad in a tiny market like Saskatchewan is treated, for the purposes of music licensing, no differently than an international ad campaign.

Explaining that at this point I was just picking his brain to satisfy my own curiosity, I offered Brandon an alternative scenario. “What if this were a TV spot limited to a particular geographical area – say, the province of Saskatchewan – and a particular time period – say, six weeks? Would that be less or more expensive?”

In that situation, he explained, a figure of $5,000-$10,000 might be acceptable.

“What if instead of Cole Porter, the composer had been someone less famous?”

Even for obscure artists, he said, the low end for synchronization licenses was in the $5,000 range.

I thanked Brandon and told him that I’d get the spot taken down right away. “Would it be alright if it waited till tomorrow?” I asked.

That would be fine, he said. He was very nice about it.

Q. How long is this going to take, and how much is it going to cost me?
A. 2 days, circa $15,000.

Master Use License, again

At this point I’d given up on ever hearing back from Tonya at EMI Publishing. So I was surprised a couple days later when this message showed up:

We have heard back from the Nat King Cole estate. The master use fee for this recording would have to be substantially higher, in the tens of thousands.

Tonya said she would put me in touch with a colleague at EMI who would pitch me some “great Blue Note jazz recordings (both master and publishing) at a competitive rate.”

By this time I’d already taken down the original ad and put up a new version with a royalty-free soundtrack. So the polite thing would’ve been to thank Tonya and tell her I was no longer in the market. But I was curious to see what the colleague would recommend, so I stayed mum and waited.

The next day, an EMI Program Manager from New York emailed me a link to a “pitch page”, where I could download and listen to a selection of a dozen mid-century jazz classics similar in feel to my preferred Nat King Cole tune. Some of the suggestions were pretty good. I tried dropping them into the video to see if they’d work:

I emailed back:

At first listen, Hank Mobley’s “The Turnaround”, Benny Goodman’s “Dizzy Fingers”, and Chet Baker’s “Jumpin’ Off A Clef” seem like they’d make good fits. Could you give me estimates for those three?

And got a reply the same day from an Assistant Manager, Music Resources:

Taking your low budget into consideration, I’d ballpark the fee at $1,000 MFN with master ($2,000 all in for each song) for one year of internet streaming and $750 MFN with master ($1,500 all in for each song) for 6 months of internet streaming. Let me know if either of those options would work for you and I can secure the rights and get a license in place when you want to use them.

(MFN, in this context, stands for Most Favoured Nation, which doesn’t have anything to do with nations. It’s explained here.)

Notice that the $1,500 “all in” quoted by the EMI Assistant Manager, which includes both licenses, is much lower than the $5,000 that Brandon, at Warner/Chappell, said was the very low end for synchronization licenses alone. Did Brandon deliberately blow me off? Did I misunderstand, or just ask the wrong question?

As you can see, I’m not much wiser than I was in the beginning.

Q. How long is this going to take, and how much is it going to cost me?
A. 17 days, from $1,500 to “tens of thousands”.

The Royalty-Free Option

So that’s why, instead of music from the King Cole Trio, our ad is scored to a gypsy jazz tune called “Tabac” by Jeremy Sherman, from the royalty-free music website stockmusicsite.com. Here’s the final version:

Q. How long is this going to take, and how much is it going to cost me?
A. Less than 1 day, $100.95.

(…But the above total doesn’t reflect the psychic cost of having to sift through hundreds of cheesy smooth-jazz compositions on a half-dozen different royalty-free music sites in order to find one acceptable substitute for the song I really wanted in the first place.)

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Michael A. Charles is a writer, animator, and musician currently living in the Vancouver area. He used to be the singer and guitarist for the band known as Sea Water Bliss.

You can find a selection of his cartoons, music videos, and ads on the Gallery page.

Michael isn't on LinkedIn or Facebook or Twitter and won't be on whatever comes along next. If you need to reach him here's his contact info.

Garson Hampfield, Crossword Inker