The Mechanics of Sync Licensing: How the Music Synchronization Works

Originally published at https://soundcharts.com on September 3, 2019.

From “Lust For Life” playing over the iconic Trainspotting opening scene to “that song from the Pepsi commercial” that you can’t get out of your head — music naturally finds its way into all other types of content. This is the essence of sync, or sync licensing or simply licensing industry. The industry likes to play loose with its terms, so, before we really get into it let’s get the definitions straight.

On paper, all use of copyrighted music, whether reproduction, distribution, public performance, or sync has to do with licensing. Every time you hear music — unless we’re talking someone busking on the street — there’s probably a licensing deal behind it.

DSPs need to negotiate licenses with record labels and publishers to allow music streaming. Terrestrial radios need to get a blanket license from the local Collective Management Organization (ASCAP, BMI, and SESAC in the US, PPL and PRS for Music in the UK, etc.). Same goes for TV channels, music clubs, restaurants, shops, you name it — every organization that uses music to its benefit needs to buy a license.

However, the licenses mentioned above are not directed towards any particular piece of music, but rather music as a whole. If you’re a french radio, a blanket license from SACEM will allow you to broadcast any music you want. Sync licensing is a whole different story.

Sync generally refers to synchronization of music to any other type of content (mainly visual content, although certain types of audio-usage require sync licenses as well). So, for example, if the song is played on the radio during the “music hour” on par with a dozen different recordings, the blanket broadcasting license will suffice. However, if the production team of a radio talk show wants to use a specific song as the show’s opening, they have to get a sync license. In that case, right holders will be compensated twice: first, through the sync license fee and then through public performance royalties.

Same goes the other way around — not all music that finds its way on TV requires sync license. For instance, if a song has been played during a televised event or spontaneously featured in the course of a live TV show, broadcasters will only pay for the public performance of the song (covered by blanket license). That type of “sync” is referred to as Ephemeral Use — a concept born at the dawn of live TV to make sure that producers are not held accountable for “unexpected use of music”. However, if the TV channel decides to rebroadcast that live show, it will have to get a sync license, as the song will become an integral part of pre-recorded content. The vital distinction between sync/non-sync use is not the media, but the type and intent of use.

So, to avoid confusion, when we say “licensing” in this article — we mean sync licensing. With that out of the away, let’s get to the mechanics of the licensing industry. Here’s how the (sync) licensing business works:

The Power of Sync

Earlier this year, IFPI reported that sync made up $0,4 billion in 2018, or a bit north of 2% of the total recording revenues. However, the recording part is just a fraction of the total contribution of licensing. First, sync rights have to be cleared with both the master right holders and the composition owners (songwriters/publishers). So, direct synch revenues are split around 50/50 between publishing and recording pipelines — those 400 million on the label’s side are just half of the total pie.

Second, due to the effect of double compensation that we briefly mentioned above, a successful sync placement will also earn right owners public performance royalties. Imagine that your song has been synched to an ad that’s being aired 100 times per day on a national TV channel — well, the performance royalties will add up, and quick. So, the total contribution of sync deals to the music industry will be much higher than the IFPI figures.

Besides, that hard cash is not always the main reason behind the sync deal. Sure, sync deals can bring up to $1,000,000 at a time for established triple-A artists, but in most cases, the promotional effect of the sync can end up much more impactful than any immediate monetary gain. There are hundreds of careers that broke as a result of a single sync hit.

We all have a couple of memorable songs we’ve discovered in a cinema theater, but if that’s not enough, here are some quick statistics to drive the point home:

• Feist’s 1234 climbed to the 10th spot on Billboard Hot 100 chart following the sync with Apple’s iPod Nano commercial
• Kavinsky’s Nightcall, featured in the movie Drive, now has over 180 million views on YouTube
• Jenny of Oldstones by Florence + The Machine, an original recording for the Game of Thrones Soundtrack, was Shazamed over 200,000 times in 24 hours since the episode aired, making it the most Shazamed song in history

Essentially, sync deals can become a semi-advertisements for the artists — especially for the lesser-known acts. Promotion teams commit vast resources into getting on Spotify playlist to get heard by 100,000 people. The same artist can get a sync deal for an ad for a major brand and end up riding the wave of ten million dollars in media spend. Their song will be played four times per hour in front of an audience of the prime-time national TV, and they’ll make money in the process. Plus, everyone in that audience will be able to Shazam the song in a click of a button. Sign me up, right?

The Structure of the Licensing Chain

Of course, not all syncs turn into a fruitful promotion for the artist — the stars have to somewhat align to make this channel work. The song has to catch the audience’s attention and doesn’t blend into the background, and, most importantly, the synced content has to complement each other. That is something that both sides of the deal are interested in, and when the sync does fit the bill, everyone is happy. So, let’s take a look at who is responsible for making it happen. Like it usually is in the music business, the goal of the industry is to connect artists and final users — and you can start building that bridge from either side.

1. Sync Users

Let’s start with demand. The list of potential sync users is not that long — generally speaking, the vast majority of sync deals will fall into the following four categories:

• Movies (and movie trailers)
• TV shows
• TV/Radio Commercials
• Video-games

We can potentially expand that list by adding independent cinema and video creators (i.e., YouTube); digital advertising slots and so forth. However, while independent creators and small scale businesses often need music to go with the visuals, they will rarely follow through with a full-blown licensing deal. Instead, the majority of “small-scale users” will go with soundbank solutions like Soundstripe. This subset is often referred to as “micro-licensing”, and, while it can be a sustainable revenue source for some of the artists, we won’t dwell on it for too long — the deal is pretty straightforward here.

For “classic” 1:1 sync deals, the process is much more complicated. Essentially, any production team has two main criteria when it comes to sync — whether it’s a 7-minute movie scene, 30-second TV-show cue or 15 seconds of background music in a TV commercial.

First, the song that will be the best possible fit for the content, amplifying the overall effect, mood and action of the final material. Generally speaking, the creative power behind the content, whether it’s the ad-agency creative team or a movie director, will define how the desired sync should sound like. Those initial briefs can vary significantly in terms of their structure.

In some cases, the creative decision-maker will use temporary placeholder music, e.g., the film director can choose a Taylor Swift song and pass it down the line saying “get me something that sounds like this”. However, getting a Taylor Swift song for your movie / TV show / video-game / commercial is going to cost a fortune. That is the second criteria of the licensing sync deal — the license has to be acquired on budget and on time.

2. Music Supervisors

Here’s where music supervisors come in. Their goal is to make sure that the two criteria are met. Music supervisors can be either a part of a production company or an independent agency, but in any case, they work closely with the creative team to turn an unstructured creative brief into more precise queries. Supervisors often search for music using terms like genre, mood, time era, energy, tempo, instruments used, vocals type and so on — which is why taking care of the metadata to fill those tags is the first step of unlocking artist’s “passive” sync opportunities.

Supervisors are the liaisons between the sync users and the music industry. If original scores are required, they act as a record label for the soundtrack project: contracting composers, booking recording sessions, renting out studios, and overseeing the recording process. When it comes to sync, music supervisors are intermediaries between the production company and artists (or their representatives). In that case, music supervisors are responsible for sourcing the production team with cleared music that (1) fits the creative brief, (2) enhances the action/mood of the scene and (3) meets the sync budget.

Quite often, music supervisors end up jammed between the brief and the budget, with the director asking to clear a Radiohead song — “it’s central to the scene, we just have to have it” — on a $10,000 sync budget (which is, of course, impossible). Those monetary restrictions on the music supervisor side are what make sync such a golden opportunity for independent artists. With Radiohead out of the picture, the next best thing would be to find a lesser-known song that is still able to capture the mood and emotion of the scene.

I mean: of course, some blockbuster movies and video-games heavily emphasize the soundtrack, making it a part of their brand, and end up with millions in sync budget, like Suicide Squad or Fifa series. Likewise, there are ads aiming to power the brand by bonding with trending artists. Those are, however, exceptions — in most cases, the music supervisor will look for up-and-coming artists to save money while maintaining the overall emotional impact.

In that sense, sync becomes one of the few promotion channels in the music industry that actually favors developing artists over established acts. On the downside, however, that very predisposition to all things independent turns licensing sync into an extremely competitive landscape. Prominent music supervisors receive hundreds (if not thousands) pitches every single day, and to cut through that clutter artists need connections and, most of the time, a professional representative on the licensing side.

3. Licensing Companies and Artist Representatives

Enter Licensing music companies. As a result of the duplicity of music copyright, licensing turns into a diverse landscape on the artist’s side. As you probably know, every original song has two distinct sets of rights attached to it: recording master rights (usually owned by the artist/label) and composition rights (owned by the songwriter/publisher). That means that in order to use the song, supervisors have to clear two separate sets of rights:

• Synchronization license from a publisher/songwriter, allowing to exploit the original composition and lyrics
• Master use license from a record label/recording artists, allowing to synchronize the sound recording

Music supervisors have to deal with both publishing and recording industries separately — even if the recording artist and the songwriter is the same person. For that reason, most established labels and publishers have some sort of licensing department, processing incoming licensing requests and proactively reaching out to music supervisors.

The duplicity of music rights also opens up a way for music supervisors to alleviate some of the sync costs by using cover songs instead of the original sound recordings. Since the Apple ads seem to be a running theme of this article, here’s the ad for Apple Watch, featuring a cover of the Dire Straits’ “Walk of Life” by Bhi Bhiman.

Of course, the exact details of the deal are never disclosed, but our guess is that the song was recorded specifically for the ad. So, Apple (or, rather, the agency behind the ad) only cleared the synchronization license with the Dire Straits publisher, alleviating the costs of the master use license. For those reasons covers — whether explicitly recorded for the soundtrack or otherwise — became a widespread sync practice.

However, the licensing companies are not limited to the licensing departments of publishers and labels. Actually, they come in all shapes and forms — from standalone pitching companies like TAXI and Audiosocket, providing their services to independent artists and smaller publishers and labels, to the prominent synch agencies like A&G Group and Hidden Track Music, internalizing essentially every part of the licensing chain to build a direct path from artists to end-users. In-between you have all sorts of music supervision agencies providing services to production companies, ad-sync consultancy agencies working on the side of the brand — you name it. The sync landscape is as diverse as it gets, even though there are just a few core roles.

Generally speaking, the expertise of the licensing rep rests on two pillars: the company’s network of music supervisors and the knowledge of the catalog it represents. Given the amount of content produced today, almost every artist (and almost every song) has a sync opportunity out there. It’s all about making the match between the right song and the right opportunity.

Licensing Representation Contracts

On the contractual side, there are several options available to the artist.

If their label/publisher has an in-house licensing department, the sync representation services are usually included in the initial recording/publishing package. If the label doesn’t have a dedicated licensing team, it will typically subcontract an independent licensing agency. In that case, the label will share its part of the sync licensing fee — the artist share remains untacked.

Independent artists (or those who own 100% of their master copyright) usually bypass the label altogether and work directly with sync reps or agencies.

As for the monetary compensation, licensing representatives traditionally take a stake in potential sync revenues. That agent’s fee varies depending on the scope of an artist and potential sync opportunities, falling anywhere from 20% to 65% of the future sync value.

The other point to consider when signing the licensing representation deal is exclusivity. Most sync reps will ask for exclusive rights to represent the artist’s music for the duration of the contract. Such deals are a double-edged sword. On the one hand, exclusivity should secure the agent’s position as a sole representative of the artist catalog and motivate them to pitch the artist. On the other hand, an exclusive rep might potentially lose interest in the artist — which means that music will just sit on the shelf for the deal’s duration.

4. The Artist

On the artist’s side, sync is rarely regarded as the central part of the music career. Most of the time, synch opportunities won’t guide artistic decisions. However, there is a percentage of artists that make synch their bread and butter, writing songs with a lookout for a potential sync deal. So, let’s take their example and review some of the factors that make some artists more “syncable” than the others.

First, it’s about the music itself. Sync landscape is very diverse, leaving space for all kinds of music — but there are still some types of songs that will get more offers than the others on average.

Take a look at the advertisements, for instance. Sure, there’s some room for experimentation here and there, especially when it comes to digital ads, not bound by 30-second TV slots. However, 95% of the ad-syncs are either upbeat and energetic or calm and touching — and most importantly, embraced by the general public. It kind of goes without saying that if you’re a hardcore punk band spitting out anti-consumerism anthems, your options in ad-sync are pretty limited. Although, there’s an exception to every rule.

Same goes for TV show and movie syncs. After all, the song has to fit the movie narrative, which tends to follow a particular structure, whether it’s a Hero’s Journey or something more advanced (I won’t lie, I’m not an expert on the narrative theories). Still, though — movie scripts have common themes, and music is often used to enhance the emotions of the scenes fit into that structure.

That’s why the “ start of a journey” open-for-interpretation type of songwriting might end up in more demand. Studying up on the basics of screenwriting is perhaps the best starting point for the artists who want to focus on movie sync. The artist’s approach to songwriting can sometimes hugely influence the “syncability” — I mean, it’s clear that Hobo Johnson’s Peach Scone (while still being a great song), is pretty much unsyncable.

Those are the four core roles of sync licensing, but, don’t get me wrong, not every deal follows that structure. Essentially, the goal of the licensing chain is to make a match between the song and the content. A movie director can reach out directly to that indie band he thinks is going to be perfect for a scene. Likewise, the artists might follow their DIY-spirit and reach out to music supervisors bypassing the licensing rep — a lot of the artists focusing on sync end up pitching themselves. The music industry is by no means a rigid structure, and a sync deal can sometimes completely sidestep the whole licensing chain.

However, whichever path it takes the sync offer will eventually find its purchase. What comes next is the licensing deal negotiation.

The Licensing Deal

When the sync offer is presented, there are two main factors that the artist side will consider: the total earnings (including the licensing lump sum as well as long-tail public performance royalties) and the overall promotional potential of the sync.

First is pretty straightforward: depending on the scope of the artist as well as the extent of the song’s use (we will get into it a bit later), artists and songwriters will get monetary compensations. In the end, it’s up to artists and their teams to put a price tag on the license — which also means that the fee will largely depend on the promotional effect of the sync. In a way, those two parts of the licensing deal are in inverse relationships: the more the promotional power of the sync, the less the licensing fees will be — and vice versa.

So, when a developing artist gets an opportunity to get on the soundtrack of a hit movie, the licensing fee is likely to go down. On the other hand, if it’s an established artist lending his music for an advertisement of a brand — especially if a brand that doesn’t exactly line up with the artist’s values — the fee will skyrocket.

In the end, the whole negotiation process can be boiled down to “the more artist wants to do a sync, the less is the fee.” Sounds easy, right?

However, there’s another aspect to consider: the scope of use. In legal terms, it’s a combination of the three components:

• License Term, or the length of the agreement
• License Territory/Market, determining to which markets and territories the license will apply
• Nature of Use, referring to the way in which the music will be synced.

The scope of use is a reflection of how much the licensee needs the music. So, the wider it is, the more bargaining power the artist has. License term and territory are pretty self-explanatory, but let’s explore the “Nature of Use” in more detail.

Nature of use defines the boundaries of potential sync, in general terms like “background”, “feature”, “theme”, “under credits”, etc. In a way, the nature of use determines the importance of music for the final content. Take feature use for example — which means that the song will play a key role in determining the emotions and mood of the scene. Obviously, that type of sync will be more valuable to the production company compared to background or end-credits music. So, once again, the artist’s bargaining power goes up — and the license fee is likely to follow.

That is the gist of how the licensing industry works. However, before we conclude this article, let’s get through some of the more notable trends and phenomenons in that space, that will dictate the future of sync.

Opportunities of Video-game Sync

There’s one aspect of the sync landscape that we’ve deliberately left out of the scope of the article so far — video-games soundtracks. In the US alone, direct video-games sales generated a whopping $35,8 billion in 2018. That’s 1,8 times the size of the entire US music industry, including live, recording and publishing. At the same time, that’s just a fraction of it — global video-game industry is expected to cross $150 billion mark in 2019. For comparison, the global film industry is worth only $136 billion. Music is an integral part of 95% of the video-games out there — and game developers definitely have the sync budget.

Now, take a look at this:

NBA 2K20 Soundtrack Line-up

In a way, this is the “line-up” for the single biggest hip-hop festival in the world — the one where XXXTENTATION is featured in small font. That is the soundtrack of an upcoming title in the NBA 2K basketball game series, and, judging by the sales of the previous one, it’s likely to be heard by some 10 million people. There’s more: following the release of the soundtrack line-up, the game’s publisher 2K Sports announced an open contest in partnership with UnitedMasters, calling for artists to submit their music with a chance to be featured in the final soundtrack.

Now, this is what we call a career-breaking opportunity. If you’re a prominent hip-hop artist, you want to get on that soundtrack, and if you’re an up-and-coming act — oh boy, that feature is going to change your life. Putting aside the fact that you will share a digital stage with the biggest names in the business, the promotional effect of that plug is hard to overstate.

Why do advertisement syncs work so well for music promotion? Repetition. The audience is going to hear the 30-second excerpt of a song five times a day, and that is extremely powerful. Well, in that sense, video-game soundtracks are even better. The average player will spend over 10 hours with the artist’s music playing in the background, and it won’t be just 30 seconds of it — it will be the full song. In a way, video-games soundtrack-like dedicated playlists that sometimes have audiences three times the New Music Friday’s.

Here’s how Steve Schnur, president of music at EA Games, the studio behind Fifa series, puts it:

“We knew that video games could become what MTV and commercial radio had once been in the 80s and 90s. Any given song in Fifa 19 — whether it’s a new track by an established act or the debut of an unknown artist — will be heard around the world nearly 1bn times. Clearly, no medium in the history of recorded music can deliver such massive and instantaneous global exposure.”

You might think that this is a relatively new thing, but video-games hugely impacted the music tastes for decades now. Sure, now gaming seems to be in the zeitgeist of the music business, with all the news of Fortnite collaborations — but the phenomenon was there since the early 2000s.

Back in 2001, GTA III was the first game in the series to introduce in-game radio, allowing players to choose between 9 curated stations, ranging from classical music to trance to the top-40 pop. Twelve years later Rockstars’ licensing team planned to clear 900 songs for GTA V — but had to settle for “mere” 240. Now, GTA V has 17 radio stations, two of which are personally curated by Frank Ocean and Flying Lotus — and, with 90 million copies of GTA V sold, those stations can keep up with the most prominent real-life broadcasters.

The list of examples could go on. Tony Hawk’s Pro Skater 2, released back in 2000, played a central role in cementing the sound of LA skate-punk. Guitar Hero series introduced some 25 million players to hundreds of artists — all while they actively engaged with the soundtrack. Racing simulators, from infamous Need For Speed to Grand Turismo, generated billions upon billions of listening hours.

The point is that video-games are a massive industry and a vast discovery channel that the music industry cannot overlook anymore. The music media are now eyeing the next big Fortnite collab, but in fact, there’s so much more opportunity to be had in that space. Whether it’s an indie passion project or a triple-A blockbuster, music is a crucial component of almost every game out there — and we’re now getting to the point where music pros finally take note of that opportunity.

AI in Music Sync

The second trend to look into is the rise of AI is music, and how it’s going to impact the licensing industry. The implications of AI-generated music is a bit of a running theme on Soundcharts’ blog. So, if you want to know more about it, check out our interview with Stephen Phillips, CEO of Mawson A.I. lab, responsible for projects like Popgun, Replica and SUPPERRES.

When it comes to sync, you can’t ignore the potential of AI music. In the foreseeable future, algorithms will be able to make music from scratch, with little human guidance needed.

In fact, here’s what Popgun can do already:

We’re now approaching the point in music history where the audience wouldn’t be able to tell whether a real person or an algorithm wrote the music in the background of a commercial. In a way, it’s just a matter of time until there’s a platform out there offering AI-generated songs for 10 euros apiece — and, well, if the audience can’t tell the difference, why should the ad agencies pay more?

On top of that, the generative algorithms will excel in processing genre and mood keywords — so instead of looking for a song that fits the bill, you can translate your creative brief into a handy set of tags — and get an original piece composed, produced, recorded and mastered in a matter of minutes. Those kinds of time and resource savings will be an offer you can’t refuse.

The AI won’t kill the music industry — on the contrary, it will likely breed a new generation of artists by putting new tools in the hands of creative people all over the world. Artistry and the music industry is not just about how it sounds — what it means and how it feels like. However, when it comes to music detached from the artist’s personality, AI will surely take over — and it might not take that long.