You have a brilliant idea to use a certain popular song in a video, but before you use it on your promotional items, you need to think twice because it could cost you as much as $150,000. Or, you could follow my recommendations and do it for just a fraction of that cost.
Music on the cheap and easy
The easiest way for you to use music on your home tours, eCards, video, etc. is to use a royalty-free music service like MusicBakery.com or RoyaltyFreeMusic.com. You’ll still need to pay extra special attention to the licensure to see if it grants you perpetual or unending use of that copyright. Your type of usage will cost you anywhere from $25 to $300.
How to stick to your guns and pay
Now, still, you’re stickin’ to your guns on using cliché songs like “Our House,” “Sweet Home Alabama” or “I’m Comin’ Home” to make your promotional point. Since you insist, at least let me tell you the right way to do it. My prior life to real estate was a Director of Publishing for a record label in Nashville; so, I dealt with this on a daily basis.
Let’s use the song “Sweet Home Alabama” for our learning exercise. You’ve finished your neighborhood video of a new subdivision you just listed outside of Birmingham which has presented you with the opportunity to use the song. In order to use it, here’s what you need to do.
Two steps to paying more
1. Publishing rights. The “right” to use this song has to be granted by the administrator of the publishing catalog. In this case there are three publishers: Universal Music Corporation, Full Keel Music, Songs of Universal and EMI Longitude. Each of these parties has a right to the copyright and payment on behalf of their writers Edward King, Gary Rossington and Ronnie Vanzant. The publisher who owns the greatest percentage will control the right to the copyright, however, all publishers must “license” the usage through a thing called a synchronization license.
Unlike mechanical licenses (which are used for CDs, downloads, vinyl’s, etc.), “synch” licenses have no agreed, standard rate. Each synch license is negotiated individually between you (the requester) and the publisher’s administrator (the grantor). The administrator will want to know the nature of the use, but more importantly, they’ll want to know the profitability of the product “Sweet Home Alabama” is being used to promote.
Since your subdivision has 150 home sites at an average price of $275,000 at a two percent commission rate to you and a 25% net profit margin to the builder, they will see a figure somewhere in the range of $11M. In this negotiation, chances are, this usage is going to cost you somewhere between $50K and $100K, if the administrator is in a good mood. Now that you have received your “permission slip” from the publisher, it’s now time for the second license, the master license.
2. Master rights. The artist cut of the song is controlled by the record label (or owner of the master recording). In our scenario, you think you’ve used Lynyrd Skynyrd’s version of the song, however it could have been Hank Williams, Jr., Alabama, The Charlie Daniels Band or Rascal Flatts. Once you are almost definite that it is indeed Skynyrd, you now must reach the record label exec who is in charge of granting master usage.
Each label does it differently, so you’ll need to call the main record label number and work your way to the right person. MCA was the record label Lynyrd Skynyrd was recording on at that point. You will need to trace down who know oversees the masters on behalf of MCA and begin that negotiation process.
The master recording right grantor in this case will use the same profitability measuring stick as the publisher, however they typically could care less what you’re paying the publisher, since they’re rarely affiliated or share profit.
The bittersweet sound of “Sweet Home Alabama”
Now, you have officially, legally used “Sweet Home Alabama” by Lynyrd Skynyrd in your real estate video. It’s only taken three months of administration time, 12-14 hours of research and phone time and somewhere around $150,000. Congratulations. Now, what did I say earlier about royalty-free music?