Duration of the Synchronization License:
The term of the license is virtually always for the entire copyright life of the song. Many times, the producer will request "perpetual" rights, but whether or not this language is contained in the contract, the music publisher can guarantee rights only while the song is under copyright protection.
Rights Granted to the Film Producer:
The motion picture synchronization fee paid to the music publisher for the use of a song includes the right to distribute the film to network, local, syndicated, pay-per-view, pay, satellite, cable, and subscription television stations; the right to show the film in motion picture theaters in the United States; and the right to include the song as part of in-context trailers, previews, and advertisements of the motion picture. U.S. television performance and broadcast rights (which are normally licensed through ASCAP and BMI) are normally excluded, but there is many times a provisio for negotiation, set fees, or arbitration in the event that a broadcast station does not have an ASCAP or BMI license or if ASCAP and BMI are legally prohibited from licensing television performance rights. Foreign theatrical distribution rights (i.e., the right to show a film in motion picture theaters outside the United States) are also given to the producer, but such rights are subject to the payment of performance fees by theaters to the various performance right organizations in countries outside the United States.
The territory of the license is normally the universe or world, but in the case of certain television miniseries, made-for-TV movies, and weekly series that are broadcast on television in the United States and shown as a feature in foreign theaters, the territory may be for the universe or world excluding the United States. In the latter case, synch fees are usually reduced depending on the duration of the agreement since the large U.S. theatrical market has been excluded from the license.
Limited Theatrical Distribution:
Depending on the nature of the film (normally in the case of documentaries or art films that do not have mass market appeal), the license may be for a limited duration and apply to the distribution of a film on a limited theater engagement or "film festival" basis. In addition, the territory may also be limited to the United States or to certain specified countries such as England, Australia, and other English-speaking countries.
At one time, music publishers and songwriters were able to negotiate a royalty which was payable for each sale of a home video version of a motion picture which contained a licensed composition. In today's market, however, motion picture producers demand a video buyout and no royalties are distributed to publishers and songwriters for sales of a motion picture on home video.
Soundtrack Album Guarantees and Hit Singles:
On occasion, a music publisher will reduce the motion picture synchronization fee for a song if the producer guarantees that the song will be on a soundtrack album released by a major label. In this case the publisher will many times give two price quotes: a higher figure if the song does not make the soundtrack album or if an album is not released and, because of the possibility of additional ancillary album income, a lower quote if the soundtrack provision actually takes effect. For example, if a publisher gives a $25,000 quote for the use of a song in a film, it also might agree to reduce the price to $22,000 if there is a guarantee of a nationally distributed soundtrack album. Considering the phenomenal success of some motion picture soundtracks and the hit singles released from the albums, such a reduction in the synch fee may pale in comparison to the mechanical royalties earned from sales of the soundtrack album and singles, not to mention radio and television performance monies received from ASCAP, BMI, and foreign societies (e.g., $600,000 to over $1,000,000 for a Top 10 worldwide pop single).
Interactive Media Uses:
The producer will usually agree not use the composition in any device which does not embody the motion picture in which the composition is used substantially as released to the general public (excluding so-called Directors' or Editors' cuts). In addition, the prohibition also extends to media where the viewer can manipulate the images and/or the audio material in a non-linear progression. In this regard, the addition of chapter stops or other locator codes or the inclusion of interviews with actors, directors, composers and other interested people on a separate audio or audio-visual track or other explanatory matter related to the motion picture is allowable and not considered as prohibited non-linear manipulation.
Deferred Payments/Step Deals:
occasion, producers of documentaries, lower-budget films,
or films that have substantially exceeded their production
budgets at the time music is being selected will ask a publisher
to reduce its up-front synch fee for a song and, in return,
guarantee an additional payment at some time in the future
if the motion picture turns a profit or exceeds a certain
agreed-upon gross or net dollar plateau.