Will commercial music price itself out of the TV production market? That's the question being asked by producers who claim library music and original compositions are fast becoming a more cost-effective solution in a business increasingly driven by cross-platform distribution deals and international sales.
“Our approach to music has changed significantly under the now not-so-new terms of trade,” explains Harry Bell, creative director at Tern TV, which is opting for original music for its latest Nick Crane series, Britannia. “With the growing importance to our business of overseas sales, commercial music is often too costly to use internationally and a minefield of bureaucracy to clear.”
It's a similar picture at Darlow Smithson Productions (DSP), where head of production Ulla Streib explains there's a growing emphasis on commissioning original music which has both saved money and enabled the production company to start building its own in-house music library.
“We now use more composed music because of the difficulties of clearing commercial music for all media and worldwide use,” she explains, citing Lusitania - Murder on the Atlantic and Kamikaze as two recent productions for which the company commissioned original music. “And once we own it, it can be reused - not just within DSP but by producers across the group.”
Ideally, a production company wants to exploit just one version of its programmes across all media in all markets. Yet the cost, time and red tape involved in music licensing makes it an area fraught with complexity and creative compromise. “The wider availability of blanket licensing arrangements has helped, but it remains a difficult and costly area,” says Daniel Isaacs, commercial director at Kudos, which had to invest heavily in commercial music for Ashes to Ashes and Life on Mars.
Rights clearance is traditionally a costly, slow process involving payments to rights holders for an array of mechanical, performance and broadcast permissions (see box). Over the past few years, however, two major developments have made music licensing simpler. One was the decision by royalty collection organisations MCPS and PRS to simplify their licensing procedures. First they formed an alliance, then the new joint body set about making licensing music for broadcast simpler and easier to understand.
Previously, only broadcasters benefited from blanket licences - the payment of a single, annual fee which enables a licensee to use any music whose rights are owned by MCPS-PRS members without having to enter into separate negotiations for every piece of music each time it is used. Since August 2007, however, independent production companies have been taking out blanket licences too, and efforts have been made to simplify the way royalties are charged.
“It's pretty transparent now - there are no surprises,” claims the Alliance's managing director, broadcast and online, Andrew Shaw. “Although there is some lack of understanding below business or commercial director level [within indies] about the flexibility our licences now offer, which is why the next challenge for us is to get that message out there.”
The other development to affect the marketplace was the emergence of buy-out libraries - a source from which producers can buy production music with all rights for all uses pre-cleared. Audio Networks, the largest and fastest-growing buy-out library, licenses production music it commissions from around 100 composers who are shareholders in the company. For an annual payment of£3,000, licensees can access its entire catalogue with all rights for all platforms and territories pre-cleared.
“Traditionally, music for TV has been a market run by big business,” Audio Networks business development director Juliette Squair observes. “But when producers took greater control over their own rights the market fragmented and went global and cross-platform. The service we developed is a direct response to this.”
Although the Audio Networks model only applies to its own, originally commissioned catalogue of music, many observers believes it is having an impact on the entire music-for-TV marketplace.
“Buy-out libraries like Audio Networks have had a positive impact on the market,” says Bell. “By offering an army of in-house composers and a database of generic tracks able to mimic commercial tracks for a blanket annual fee, more established libraries have been forced to become more competitive and flexible.”
Michael Cole, managing director of leading production music library Universal Publishing Production Music, an MCPS member, agrees. “It's taking the MCPS time to realign its licensing procedures in response to changing market conditions,” he adds. “Once it does there will be little reason to go the buy-out route. Cost isn't the only factor here. Quality and range of music catalogue is essential as, of course, is ease of use.”
Overall, demand for music for TV has risen over the past five years thanks to a growing proliferation of TV channels and digital platforms, IPTV and on-demand services, MCPS-PRS figures show. And there is little evidence to suggest any significant shift in the use by programme-makers of any one particular type of music at the cost of any other.
The price of commercial music is, in fact, coming down thanks to efforts to standardise prices under new MCPS blanket licensing agreements, MCPS' Shaw points out. Library music is also becoming more competitive - both in terms of flexibility of use and price. Original compositions, meanwhile, are costing production companies the same or less to acquire than four or five years ago, producers reveal.
“One reason for this is composers being forced to fall into step with the changing dynamics of the TV market - a growing number are now willing to work for a lower up-front fee for a share of back-end royalties,” says Garry Judd, a composer and director of Artful Production Music.
Another explanation is the growing number of young composers willing to undercut the competition to make their mark, says Phil Bird, vice-president of music search and licensing specialist Ricall. “TV production budgets are tight and getting tighter,” he adds. “Meanwhile, look at the supply side of the business and you will see not just a large array of production music sources but a growing number of young composers coming into the marketplace willing to undercut the competition to make their mark.”
So if things are improving, why do so many producers claim licensing music remains so painful? One reason is that now independents own the rights to their programmes, they have a direct interest in driving music costs down. Another is digital rights. “It's the biggest issue for composers at the moment,” Judd observes.
Michael Shaw, head of media at music publisher Boosey & Hawkes, shares this concern. “The digital multiplatform side of things remains a minefield,” he agrees. “It makes no sense to any rights owner to give rights away - which is what they would be doing if all music was offered with all rights cleared for all uses upfront.”
Commercial music will always be used for broadcast television, especially for primetime drama, where a strong period feel is essential, he adds: “Digital, however, is a battle yet to be fought. We really need it sorted out and fast before certain music - commercial music especially - finds itself priced out of that market.”
Music licensing: how it works
Who licenses what?
Clearance is required from a number of key organisations:
the Mechanical Copyright Protection Society (MCPS) collects royalties on sales for all music on behalf of composers, songwriters and publishers. The Performing Rights Society (PRS) collects performance royalties whenever a piece of music is performed. Both these are now handled by the MCPS-PRS Alliance. Phonographic Performance Ltd (PPL) collects airplay and public performance royalties on all commercial music.
How does it work?
MCPS-PRS membership covers an estimated 99% of all copyright music available in the UK.
Most UK broadcasters hold blanket MCPS and PRS licensing agreements, which means they - and producers working for them - do not have to license music used in programmes they make or commission on a per-track or per-use basis.
However, publisher broadcasters Channel 4, S4C and Five and producers working for them are responsible for clearing music rights. In 2007, MCPS-PRS introduced blanket licensing agreements for indies to simplify the licensing process.
MCPS-PRS Alliance blankets cover initial rights for the transmission of a programme on the commissioning channel.
Often included under a blanket are provisions for multi-platform use and international distribution - for which music is priced according to a percentage of total revenue generated by the programme's overseas sale. Tariffs for catch-up and on-demand use and sales to the US, are usually charged additionally.
The PPL offers UK broadcasters blankets covering initial broadcast of commercial music. Any indie making a programme for a UK broadcaster will be covered by that broadcaster's primary blanket licence.
Secondary sales are covered by a secondary PPL blanket licence. When an indie sells the show to a secondary market, however, it must pay a PPL royalty - as must any purchasing broadcaster.
The bottom line
Traditionally, library music was sold at rate card prices based on a payment per 30 seconds used. Commercial music had no standard rates, as assessing the respective value of different artists is highly subjective.
Two factors, however, are changing the status quo. First, MCPS-PRS is working to make licensing simpler and more flexible. A standard up-front fee of£350 is now charged for music to be used in a programme of up to 60 minutes for distribution within Europe, for example.
Also, set rates for commercial music have been introduced. As a result, the MCPS claims, while more expensive than library or original music, commercial music is getting cheaper.