Panelist (l to r) Erin Jacobson, Bob Mair, Pedro Costa, and Michael Eames (on Michael Laskow's laptop) enjoy a light moment during their panel at the TAXI Road Rally.
Panelists: Erin Jacobson, Bob Mair, Pedro Costa, Michael Eames
Moderator: Michael Laskow
Michael Laskow — I get calls from music library owners who say, “You’re not going to believe this, Michael, but we just offered a deal to somebody who said, ‘I’m afraid to sign the contract, because I’m nervous that I might get ripped off.’” Even though the companies offering the deals have been vetted by TAXI, they’ve already signed dozens — maybe even hundreds of TAXI members over a period of years — and have placed their music in countless TV episodes, so many musicians are afraid that the people in the music industry wake up every morning asking themselves, “How can I screw some musician today?”
That might have happened in the record side of the music business, but I haven’t seen that in the music licensing side of the industry. Music library contracts (specifically) tend to be in a range of what I would call, “typical.”
Some deals offer some cash up front in a buyout situation, with the creator keeping the writer’s share of the publishing, others are most often 50/50 splits, some are exclusive deals, and some are non-exclusive.
It should be noted that music library agreements are not like the publishing deals one might sign with a publisher on the record side of the industry. Those are a different beast, and frankly, those deals are what people who aren’t up to speed as to what typical music library contracts look like are comparing them to. They are all publishing deals, but it’s like apples and oranges. They’re both fruit, but they are different types of fruit!
And to help you better understand what some typical music library contracts might have in them, and what those things mean, are some world-class experts who bring different perspectives to the discussion.
Erin Jacobson is a music attorney—and a great one at that. She handles all kinds of negotiations and deals across the entire industry, and is one of the few music attorneys I personally know who really understands the music library industry and your needs as the people who create music for them.
Bob Mair is a music library CEO with countless placements for TAXI members on his scorecard, a composer, and a great businessperson, known for his ethical dealings with his composers.
Pedro Costa is also a music library CEO with a ton of placements for TAXI members on his scorecard. Like Bob, Pedro is also a composer, and a great businessperson, and is very well regarded for his ethical dealings with his composers. He also credits TAXI with helping him launch his career placing his own music in tons of TV shows, which ultimately led him to starting his own music library.
And on the big screen up there, live from his hotel room in New York City is Michael Eames. Michael is also a publisher and one of the smartest people I know in the music industry. His understanding of the intricacies and nuances from both business and legal sides is so deep it makes my head hurt!
So you guys [in the audience] have the A-Team here for you today. And I’ve got to say, these were the hardest panel questions I had to write for the entire Road Rally.
So here’s a question for all of you on the panel—and we’ll just go down the line and then hit Michael as the fourth panelist: Is there such a thing as the “perfect” contract that works for all companies and all songwriters and composers? And I’m speaking in terms of music library and music licensing. Is there such a thing?
Erin: I do write them. Yes, I write the perfect contract. [laughter] Actually, no there isn’t, because every company is going to run their business a little bit differently. It’s just that people are different, so what is acceptable to one person is not going to be acceptable to another person. Now, we have industry standards; we have kind of a gauge of where it should be, and what’s more fair versus not so fair. But sometimes some people are just not okay with something for one reason or another. So it’s just like life, you can’t please everybody, but you can still make a contract that’s fair and that serves both parties and facilitates a good working relationship.
Okay. Bob how about you?
Bob: Well, I would agree. I don’t think there is any one contract that could fit all. I mean, everybody is looking for something different. My understanding of contracts is two parties coming to some agreement. Once that’s done, whatever that that is, as long as you’ve got a piece of paper spelling it out, fine. There are some agreements that are pretty scary, but people sign them. So we can get into the weeds of what that would be.
We will. I want to get into the weeds, not to the point of glazing everybody’s eyes over, but that’s the purpose of this panel.
“There is no one-size-fits-all contract for a company or for a composer.”-Pedro Costa
Pedro, how about you? You and Bob in particular, because you are both composers and music library owners. You guys have signed contracts as well as now offering contracts. Is there such a thing as a perfect contract in the music library business?
Pedro: Right. So from my perspective, when I started the company, I saw it. I was working from both sides, right? So I had signed contracts as a composer over the years. There were certain things that I didn’t like about them that I thought that, when I’m on the other side, I’m going to do things a little bit differently. Having said that, of course there is no one-size-fits-all contract for a company or for a composer. When you start a company, you are going to try to make the contract and the agreements match whatever your business plan is and what will work best for your clients, and what will work best for your processes and how you work with your composers. So [there is] no contract that works for everything, that’s for sure.
So were you able to get close to your ideal of “I’m going to try and create a contract for my composers that would have made me happy to sign back in the day”?
Pedro: Yeah, essentially, I looked at the agreements that I already had as a composer with various companies, and looked at what are the elements that I love about each one, and I will combine all of the best aspects into our agreement. And then, of course, over time that has changed. We now have three different agreements that we use for our composers now just to fit the different things that we’ve done as a business over the years.
And I’ll talk to you about that, because that’s one of the reasons I asked you to be on this because you have a perspective.
“None of us ever want to go into anything and then disappoint somebody.”-Michael Eames
Michael Eames, how about you? Have you ever seen the perfect contract?
Michael: I am going to pretty much echo what everybody else said. I mean, there are standards, and there is fairness. I don’t know if there is the one idyllic thing, because honestly as any of us enter into these things, you know, there’s an element of risk and trust on both sides. No one can guarantee that anything is gonna get placed, so we, as the ones who are offering the contract and then going to pitch it, whether or not there’s a direct financial investment, there’s still a commitment of resources and an investment into we’re going to be putting time and effort into trying to make this music happen. And on their [the composers’] side, they have to trust that we are going to try and go out and do it. So I think as long as everyone feels that there’s an element of fairness, then let’s just go into this and see if it works, and then you just hope for the best. None of us ever want to go into anything and then disappoint somebody.
Erin, in English, not lawyer-speak, what are the main bullet points that you would like to see in a music library contract? If you’re a musician, what should they be looking for?
Erin: Well, I think you have to look at it from kind of what’s in there first. Because there is going to be a certain structure that it should follow; you’re going to want to know how long the agreement lasts, which is called the term; you’re going to want to know whether it’s exclusive or non-exclusive, whether your music is only with that library or whether you can also put that music with other libraries for pitching; you’re going to want to know what you are getting paid, what the financial split is going to be and the royalties, and what royalties they are going to share in. Are they going to share it only in an upfront sync fee? Are they going to share in backend royalties? Are they going to share in more than just performance royalties, where they are starting to act as you publishing administrator? So there are a lot of financial aspects that go into it. You want to know how to get out of the contract if you want to or need to, or there’s a problem. What else? Retitling: Are the compositions going to be retitled or not?
“There are a lot of library agreements I’ve seen that are not clear...”-Erin Jacobson
So those are the standard things that are always going to be in a library agreement, or at least they should be explained. There are a lot of library agreements I’ve seen that are not clear on those things, and you want it to be clear on those points, because otherwise you could be in a deal going, “I don’t know how long this lasts for?” or “I’m not sure what financial split I’m supposed to get out of this.”
And then, taking it more along with what you asked is, what do you want to have in it? Looking at those terms that you want it to be fair to you as a composer, but you also have to take into account that it has to be fair to the library too, because they’re running a business and they need the adequate time and resources to be pitching your music, and time to do something with it. Because if they don’t get a placement in the next two weeks and you’re like, “This is awful, I want out of this deal”... I mean, that’s not how it works.
But that’s an unrealistic expectation that a lot of newbies have. If they love me, they’ve signed me and now they are going to go bang on every door in the industry going, “I’ve got this awesome new piece of music.” And this is a whole other panel—it’s not about contracts—but if there are any newbies in the room, just understand that that’s the old publishing model. That’s pretty much a “push” model. We’ve signed a great song, we try and think of who might cut it, we go out to them and we go, “Hey, you’ve gotta check this out.” These guys in the music library business are typically in more of a “pull” model, meaning that end users reach out to ask if the library has a certain type of music.
Bob, you’ve made a great case for why all contracts should be exclusive.
Bob: I want to interject there. My contract will be exclusive; I would never tell anybody what else to do.
All right, I’ll rephrase that to say you have made a strong case for why your contract is exclusive. Some musicians might say, “Oh, I don’t want to tie my thing up. I don’t want to be in an exclusive situation.”
Bob: Then they shouldn’t do the contract.
And in your case, you don’t buy out the copyright; you don’t buy the publisher’s share.
Bob: There are instances where that happens.
Is it fair to say that most of the time you don’t?
Bob: Most of the time, yeah. You are correct.
So anytime anybody has called me about you or other people that have a very similar deal, I always say, “If they weren’t a great library, we wouldn’t be working with them,” number one. Number two, “We know how incredibly successful he’s been placing music, so I would make that bet with my music. Do you need to know anything else?” There are other libraries that might write you an advance check to buy out the publisher’s share for $100, $200, $500. I would make the bet that you will make them as much money in the long run as those other people probably will. Nobody can guarantee that, of course.
Bob: I would be very curious to hear your take on that, because you advise people...
Bob: So when you see a non-exclusive contract, from the standpoint of copyright, would you advise someone not to do that? Or would you say that’s okay?
Erin: It depends. That’s the answer to every legal question. But it really does depend, because there are people that are keeping the songs closest to their heart and putting them with a library. And then there are people that are churning out new instrumental cues every day and putting them with a library. And those are two totally different scenarios from the composer’s perspective. Because, you know, if these are your “babies,” you want to be more protective about those, and you want to be putting them with a library that you trust with them. And if it ends up being a situation—which has happened with some libraries—is that you put songs with the library and never hear from them again. That could be a problem, especially in an exclusive situation. But if it’s like, “Oh, I’ll write another 10 cues tomorrow. Eh, exclusive or non-exclusive?” And then you have to weigh the whole if it’s exclusive versus non-exclusive, you have one person pitching versus multiple people pitching. So on the one hand you have more people pushing that music, but on the other hand, supervisors are getting that music from multiple people, and do they want to be getting [the same music] from multiple people? And will those supervisors be accepting music from non-exclusive libraries—because they don’t want to deal with that “who pitched it first” battle?
Bob: It’s whom they can get it cheaper from.
Bob: So let’s get back to why I am adamant about exclusive. I come from an old-school concept. You know, “I Want to Hold Your Hand” is “I Want to Hold Your Hand.” You can re-record it 10 times, and that’s a different master, but the composition is “I Want to Hold Your Hand.” And so, when I’m signing an agreement with NBC, CBS, HBO, Showtime, whoever, I am indemnifying that I control that piece of music 100%. If that piece of music is in five other catalogs, I am lying. It’s a pretty basic situation, and it is certainly more of an emotional challenge. Which is kind of another reason I do it, because I’m not about a volume thing, I’m about good music and representing that good music. And you’re right, Michael, after 30 years in the business, it’s a goodwill thing so people can find out about the company and what kind of business we have done, and you’ll speak up or you won’t, or whatever. There are other people that are TAXI members that can speak on my behalf.
But the non-exclusive thing is wrought with problems from the standpoint of digital water-marking. Say you get in five non-exclusive catalogs that are top tier catalogs, and they all get the same brief that I get, and we pitch a piece of music for an end-title credit of a film; who represents that piece of music?
Well, I would say the first person that got it over the threshold. And you have it time-stamped in the form of an email, probably, to prove that. So that would be how I would do that; other people have told me, “No, I don’t like that decision.”
Bob: It’s an interesting thing. Well, you’ve got to remember too that editors take hard drives from point A to point B; they leave one show and go to another show. It becomes, in my estimation, a mess. And for me, it’s just contractually cleaner, and it is more of a commitment, no doubt about it.
Read Part Two of this panel in next month’s TAXI Transmitter!