Obtaining Rights to Artists and Content For Use in Music-Driven TV Productions

The producers of music-driven television programs, such as variety specials and music-based TV series, typically must negotiate with several key parties to obtain the rights to use the music and the services of the artists in the show. These parties include: music publishers that own, control and/or administrate the music compositions performed 'live and in concert' and/or on sound-recording masters included in the program; the record labels that own, control and/or administrate the masters; and the labels that are entitled to the exclusive recording services of the artists performing the music in the TV show. The program producer, who will likely have created the concept and format for the TV production, usually undertakes all of the production's associated risks and is responsible for the program's financing.

In the following interview coordinated by Entertainment Law & Finance Editor-in-Chief, Stan Soocher, Santa Monica, CA-based entertainment-attorney Henry Root discusses key aspects of the clearance process involved in music-driven TV productions, as well as producer/label negotiations and how they may affect the artist. Root has over 25 years of experience in the music and TV industries. He has overseen the delivery of programming to every major TV network. His institutional clients include the MTV Networks. He also represents record and TV producers, a mini-major music-publishing company, numerous award-winning songwriters and recording artists signed to nearly every major record label. Root began his legal career in the Business & Legal Affairs department of MCA Records after several years of international touring with major acts as a lighting designer and production manager.

EL&F: What are the initial rights-clearance considerations for the program producer?

Root: Unlike major motion-picture productions and network TV programming in general (other than variety specials), the budgets available to producers of 'live in concert' and similar music-driven TV programs are almost always insufficient for the producer to be able to afford 'all rights' buy-outs for the uses of compositions, masters, and the rights to use, include and exploit the performances of the artists in the show. No TV production is more complex from a rights-clearance perspective than music-driven TV productions, whether in the form of one-time TV variety specials (eg, 'Fashion Rocks,' The Grammy Awards), charitable benefits (eg, 'Tsu-nami Aid,' 'The Concert for New York City'), 'live in concert' specials (eg, 'The Bob Marley All-Star Tribute,' 'Return to Sin City: A Tribute to Gram Parsons') or TV series (eg, 'Hard Rock Live,' 'Decades Rock Live').

Assume for purposes of this interview that the production is comprised of a combination of 'live in concert' musical performances by one or more popular contemporary artists signed to an exclusive recording agreement with a label, and that pre-existing masters are to be licensed by the producer for 'lead' and 'end title' credit scrolls in the production and/or for use as 'bumpers' (ie, the 'lead-ins' and 'lead-outs' to and from commercial breaks in the production). Also, for purposes of this interview, the defined term 'Artist Performance' will refer to the 'live in concert' performance by an artist of a single, full-length musical composition.

With regard to the compositions used in the sound-recording masters and artist performances in the production, the producer must obtain synchronization licenses for the compositions from the music publisher and master-use licenses for the sound-recordings from the label. Note, however, that the 'public performance right' is also implicated in broadcasts of the production, including, in the digital era, any Internet streaming and/or other digital performances of the composition and, in the case of digital-audio transmissions, the master. Legal counsel for the TV producer must therefore review the applicable broadcast-license agreements for the production to ensure that the broadcaster warrants and represents that it is a party to a 'blanket performing-rights license' with the performing-rights organizations (PROs) ASCAP, BMI and SESAC, and, in the case of digital-audio performances of the masters, Sound-Exchange. If the broadcasters are not so affiliated, then the producer must obtain the performing rights to the compositions, and, if the production will be streamed by digital means, performing rights for the digital transmission of the master. The prudent practitioner must also ensure that the Web site from which the streaming will occur has a valid and subsisting performance-rights licenses with the PROs and is affiliated with SoundExchange as to the masters.

EL&F: How are option rights for music in the program negotiated?

Root: In counseling the producer, the legal practitioner must peer into a crystal ball to determine all of the costs that may be associated with the exploitation of the production in various mediums beyond the initial TV broadcast. The budget for the production will likely provide, as a line item, only a sufficient amount of money to pay for the costs of obtaining the appropriate licenses for the use of the compositions and masters for the initial broadcasts of the production under the terms of the producer's broadcast license or similar form of agreement with the broadcaster concerned. For example, the producer's broadcast-license agreement may obligate the producer to deliver the production with all underlying rights cleared for a broadcast term of 1 year, solely for broadcast on 'free over the air' (ie, network) broadcast media, solely within the territory of the United States, its territories and possessions, with the broadcaster being entitled to a maximum of eight broadcasts within that 1-year broadcast term.

The practitioner should confer with the producer concerning what additional exploitations the producer may realistically anticipate occurring within a reasonable period of time from the date of the initial broadcast of the production. Practitioners are oftentimes involved in the 'shopping' of distribution agreements relating to such additional, ancillary exploitations. Once a determination is made, the producer obtains the music synchronization and master-use licenses for the initial broadcast rights required under the broadcast-license agreement and should, at the same time, obtain options from the publisher of the compositions and from the label that controls the masters for rights/clearances necessary to enable the anticipated ancillary exploitations.

By successfully negotiating for options in connection with the clearances for the initial broadcast, the producer has the flexibility to 'shop' for agreements providing for the exercise of 're-run' and other ancillary rights in the production. When the amount of license fees and/or other revenue sources are in excess of the fees applicable to the exercise of the options concerned, the producer may exercise the options knowing that there will be a sufficient level of income from which to make the necessary payments required upon the exercise of the option. This is particularly important where the producer has deficit-financed the production and expects to make up the shortfall from future ancillary exploitations. With options for ancillary exploitations in place, the producer avoids the necessary hassle of re-clearing the underlying rights ' a significant expense ' should the producer obtain offers for ancillary broadcasts or other exploitations of the production.

Examples of commonly sought ancillary rights and exploitations might include the right to authorize: re-runs of the production on U.S. TV networks after the expiration of the initial 1-year broadcast term in our hypothetical; broadcasts of the production on TV networks outside the U.S.; release of the production on DVDs/home-video devices; streaming of the production from Web sites; making the production available by means of 'free-on-demand' and/or 'video-on-demand' TV and broadband platforms; and uses of individual artist performances as ringtones, mastertones and/or 'full track' 'Over-the Air' (OTAs) via streams and/or downloads.

EL&F: What are some of the considerations in determining the amount of the synch and master-use license fees?

Root: Some of the relevant factors the practitioner might take into account in negotiating synch and master-use fees include: the degree of popularity achieved by the composition and artist whose performances are embodied on the master; of course, the amount of the producer's budget; the type and nature of use of the composition and master in the production ' uses under lead and end credits, as theme music and full-length visual-vocal performances of entire masters and compositions will command a higher fee than partial uses in bumpers, background/incidental and/or score and underscore uses; the scope of the rights granted ' each platform or media of exploitation sought will increase the amount of the synch and master-use fees; the length of time the license will be in effect; and whether 'in-context'/'out-of-context' trailer and promotional rights are sought. In addition, the producer may wish to use the composition and master in promotional advertisements and commercials to promote the production.

For example, use of a 30-second excerpt of an artist performance taken from the production and used in a TV commercial to promote broadcasts of the production would be considered an 'in-context' use. Use of the audio-only music derived from the audio-only soundtrack of the production, taken from a scene in which the artist performed the composition and placed under a different scene than in which it was performed is an 'out-of-context' use that would command a higher license fee; eg, if the producer wanted to use only the audio-only musical artist performing the composition under the end-credit scroll while an exterior shot of the venue in which the production was produced forms the background for the scroll.

EL&F: What considerations are involved for the TV producer to obtain the right for the artist performance in the TV production from the label entitled to the exclusive recording services of the artist?

Root: The TV producer may be required to secure what is known throughout the recording industry as a 'label waiver of exclusivity.' The label will struggle in negotiations with the producer over the issue of whether and how a waiver of the label's exclusive rights to the recording services of the artist will affect its rights under the label's exclusive recording agreement with the artist, while at the same time weighing the importance of 'protecting its investment' in the artist and the degree of promotional exposure that could result from the artist's participation in the production and its broadcasts.

This area is perhaps the most challenging part of representing producers in connection with 'live in concert' and other similar music-driven TV productions. Also keep in mind that the producer is required to obtain all rights that the producer seeks to use and exploit directly from the artist in accordance with the terms of any union and guild collective-bargaining agreements, if applicable to the production. The label is only waiving whatever exclusive recording rights (and name-and-likeness rights) that the label may otherwise be entitled to from the artist under the recording agreement.

Several competing interests come into play regarding negotiation of the label's waiver. First, the producer, who will most likely deficit-finance the costs of production, is the party taking the financial and other risks of the production, which include risks of budget overages, force majeure, artist cancellation and/or non-appearance, general and commercial liability, harm/injury/death/disability to the audience, performers and production staff, and the like. The producer will likely have created the concept and format of the production, and is typically responsible for the payment of 100% of production costs, which in the 'top-tier' cable/satellite markets and in the prime-time network broadcast category can easily run into the low several millions of dollars. The producer will have been the one to have secured the broadcast-license agreements and possesses a unique set of skills, knowledge and experience necessary to undertake a production of this nature, have the TV-industry relationships within which to place/cause the production and its broadcast and, at the network and top tier cable/satellite broadcast level, possess the qualifications to be approved by the broadcaster as the 'showrunner' for the production.

It takes years of experience and relationship building to achieve status as a showrunner, known for bringing high-quality productions in on time and on budget. Further, the delivery of the production for which the initial broadcast is truly 'live,' with the initial broadcast occurring simultaneously with the performances, takes a particular skill set that very few producers have a track record of accomplishing successfully. In fact, at the highest level of network variety/'live in concert' prime-time special production, there are perhaps five producers in the U.S. who deliver 80% or more of all such programming.

Next, the label will generally have invested several millions of dollars in establishing the name-brand recognition and goodwill of artists appearing in the production, and may well have a hugely unrecouped royalty account with the artist. The labels often view the producer as a pariah seeking to capitalize on the human resources and financial investments that the label has undertaken to establish the artist's career. Within the label itself, there are also competing interests. On the one hand, the marketing and promotion departments seek, to the fullest extent possible, to obtain and maximize the promotional exposure that the artist obtains (at no cost to the label's marketing budgets) while, on the other hand, the business-affairs departments seek to protect the label's exclusive recording rights and maximize the label's revenues exploitation of the artist's performances in the production. (The business-affairs department of one major label is rumored to have issued an internal edict that under no circumstances will that label agree to waive exclusivity absent payment to the label. If this is truly the case, this could create even more internal discord at the label when the business-affairs agenda conflicts with those of marketing-and-promotion department objectives ' and those of artist and artist manager.)

Complicating both the internal workings at the label and the process of securing waivers on the producer's behalf is the fact that the labels have now established 'new-media' departments that are responsible for such new media/digital rights as streaming and/or downloading of the production and for the artist's performances involved. On occasion, the label will contribute to the costs of the artist's set and set design, accompanists, dancers, travel, hotel and cartage costs, and any factors that may be unique to the artist's performance, if the level of visibility for the broadcasts is considered to be great enough.

And the artist will want to benefit from the marketing and promotional opportunities of performing in the production and from the often-extensive marketing campaigns undertaken by the broadcaster to promote the production. The artist will also want to profit from any financial remuneration that may flow from the producer's exploitations of the production and from the label's exercise of so-called 'reciprocal rights.'

Part Two of this article will include discussion of copyrights in artist TV performances, reciprocal rights with record labels, holdbacks on exploitation, and warranties and representations.

The producers of music-driven television programs, such as variety specials and music-based TV series, typically must negotiate with several key parties to obtain the rights to use the music and the services of the artists in the show. These parties include: music publishers that own, control and/or administrate the music compositions performed 'live and in concert' and/or on sound-recording masters included in the program; the record labels that own, control and/or administrate the masters; and the labels that are entitled to the exclusive recording services of the artists performing the music in the TV show. The program producer, who will likely have created the concept and format for the TV production, usually undertakes all of the production's associated risks and is responsible for the program's financing.

In the following interview coordinated by Entertainment Law & Finance Editor-in-Chief, Stan Soocher, Santa Monica, CA-based entertainment-attorney Henry Root discusses key aspects of the clearance process involved in music-driven TV productions, as well as producer/label negotiations and how they may affect the artist. Root has over 25 years of experience in the music and TV industries. He has overseen the delivery of programming to every major TV network. His institutional clients include the MTV Networks. He also represents record and TV producers, a mini-major music-publishing company, numerous award-winning songwriters and recording artists signed to nearly every major record label. Root began his legal career in the Business & Legal Affairs department of MCA Records after several years of international touring with major acts as a lighting designer and production manager.

EL&F: What are the initial rights-clearance considerations for the program producer?

Root: Unlike major motion-picture productions and network TV programming in general (other than variety specials), the budgets available to producers of 'live in concert' and similar music-driven TV programs are almost always insufficient for the producer to be able to afford 'all rights' buy-outs for the uses of compositions, masters, and the rights to use, include and exploit the performances of the artists in the show. No TV production is more complex from a rights-clearance perspective than music-driven TV productions, whether in the form of one-time TV variety specials (eg, 'Fashion Rocks,' The Grammy Awards), charitable benefits (eg, 'Tsu-nami Aid,' 'The Concert for New York City'), 'live in concert' specials (eg, 'The Bob Marley All-Star Tribute,' 'Return to Sin City: A Tribute to Gram Parsons') or TV series (eg, 'Hard Rock Live,' 'Decades Rock Live').

Assume for purposes of this interview that the production is comprised of a combination of 'live in concert' musical performances by one or more popular contemporary artists signed to an exclusive recording agreement with a label, and that pre-existing masters are to be licensed by the producer for 'lead' and 'end title' credit scrolls in the production and/or for use as 'bumpers' (ie, the 'lead-ins' and 'lead-outs' to and from commercial breaks in the production). Also, for purposes of this interview, the defined term 'Artist Performance' will refer to the 'live in concert' performance by an artist of a single, full-length musical composition.

With regard to the compositions used in the sound-recording masters and artist performances in the production, the producer must obtain synchronization licenses for the compositions from the music publisher and master-use licenses for the sound-recordings from the label. Note, however, that the 'public performance right' is also implicated in broadcasts of the production, including, in the digital era, any Internet streaming and/or other digital performances of the composition and, in the case of digital-audio transmissions, the master. Legal counsel for the TV producer must therefore review the applicable broadcast-license agreements for the production to ensure that the broadcaster warrants and represents that it is a party to a 'blanket performing-rights license' with the performing-rights organizations (PROs) ASCAP, BMI and SESAC, and, in the case of digital-audio performances of the masters, Sound-Exchange. If the broadcasters are not so affiliated, then the producer must obtain the performing rights to the compositions, and, if the production will be streamed by digital means, performing rights for the digital transmission of the master. The prudent practitioner must also ensure that the Web site from which the streaming will occur has a valid and subsisting performance-rights licenses with the PROs and is affiliated with SoundExchange as to the masters.

EL&F: How are option rights for music in the program negotiated?

Root: In counseling the producer, the legal practitioner must peer into a crystal ball to determine all of the costs that may be associated with the exploitation of the production in various mediums beyond the initial TV broadcast. The budget for the production will likely provide, as a line item, only a sufficient amount of money to pay for the costs of obtaining the appropriate licenses for the use of the compositions and masters for the initial broadcasts of the production under the terms of the producer's broadcast license or similar form of agreement with the broadcaster concerned. For example, the producer's broadcast-license agreement may obligate the producer to deliver the production with all underlying rights cleared for a broadcast term of 1 year, solely for broadcast on 'free over the air' (ie, network) broadcast media, solely within the territory of the United States, its territories and possessions, with the broadcaster being entitled to a maximum of eight broadcasts within that 1-year broadcast term.

The practitioner should confer with the producer concerning what additional exploitations the producer may realistically anticipate occurring within a reasonable period of time from the date of the initial broadcast of the production. Practitioners are oftentimes involved in the 'shopping' of distribution agreements relating to such additional, ancillary exploitations. Once a determination is made, the producer obtains the music synchronization and master-use licenses for the initial broadcast rights required under the broadcast-license agreement and should, at the same time, obtain options from the publisher of the compositions and from the label that controls the masters for rights/clearances necessary to enable the anticipated ancillary exploitations.

By successfully negotiating for options in connection with the clearances for the initial broadcast, the producer has the flexibility to 'shop' for agreements providing for the exercise of 're-run' and other ancillary rights in the production. When the amount of license fees and/or other revenue sources are in excess of the fees applicable to the exercise of the options concerned, the producer may exercise the options knowing that there will be a sufficient level of income from which to make the necessary payments required upon the exercise of the option. This is particularly important where the producer has deficit-financed the production and expects to make up the shortfall from future ancillary exploitations. With options for ancillary exploitations in place, the producer avoids the necessary hassle of re-clearing the underlying rights ' a significant expense ' should the producer obtain offers for ancillary broadcasts or other exploitations of the production.

Examples of commonly sought ancillary rights and exploitations might include the right to authorize: re-runs of the production on U.S. TV networks after the expiration of the initial 1-year broadcast term in our hypothetical; broadcasts of the production on TV networks outside the U.S.; release of the production on DVDs/home-video devices; streaming of the production from Web sites; making the production available by means of 'free-on-demand' and/or 'video-on-demand' TV and broadband platforms; and uses of individual artist performances as ringtones, mastertones and/or 'full track' 'Over-the Air' (OTAs) via streams and/or downloads.

EL&F: What are some of the considerations in determining the amount of the synch and master-use license fees?

Root: Some of the relevant factors the practitioner might take into account in negotiating synch and master-use fees include: the degree of popularity achieved by the composition and artist whose performances are embodied on the master; of course, the amount of the producer's budget; the type and nature of use of the composition and master in the production ' uses under lead and end credits, as theme music and full-length visual-vocal performances of entire masters and compositions will command a higher fee than partial uses in bumpers, background/incidental and/or score and underscore uses; the scope of the rights granted ' each platform or media of exploitation sought will increase the amount of the synch and master-use fees; the length of time the license will be in effect; and whether 'in-context'/'out-of-context' trailer and promotional rights are sought. In addition, the producer may wish to use the composition and master in promotional advertisements and commercials to promote the production.

For example, use of a 30-second excerpt of an artist performance taken from the production and used in a TV commercial to promote broadcasts of the production would be considered an 'in-context' use. Use of the audio-only music derived from the audio-only soundtrack of the production, taken from a scene in which the artist performed the composition and placed under a different scene than in which it was performed is an 'out-of-context' use that would command a higher license fee; eg, if the producer wanted to use only the audio-only musical artist performing the composition under the end-credit scroll while an exterior shot of the venue in which the production was produced forms the background for the scroll.

EL&F: What considerations are involved for the TV producer to obtain the right for the artist performance in the TV production from the label entitled to the exclusive recording services of the artist?

Root: The TV producer may be required to secure what is known throughout the recording industry as a 'label waiver of exclusivity.' The label will struggle in negotiations with the producer over the issue of whether and how a waiver of the label's exclusive rights to the recording services of the artist will affect its rights under the label's exclusive recording agreement with the artist, while at the same time weighing the importance of 'protecting its investment' in the artist and the degree of promotional exposure that could result from the artist's participation in the production and its broadcasts.

This area is perhaps the most challenging part of representing producers in connection with 'live in concert' and other similar music-driven TV productions. Also keep in mind that the producer is required to obtain all rights that the producer seeks to use and exploit directly from the artist in accordance with the terms of any union and guild collective-bargaining agreements, if applicable to the production. The label is only waiving whatever exclusive recording rights (and name-and-likeness rights) that the label may otherwise be entitled to from the artist under the recording agreement.

Several competing interests come into play regarding negotiation of the label's waiver. First, the producer, who will most likely deficit-finance the costs of production, is the party taking the financial and other risks of the production, which include risks of budget overages, force majeure, artist cancellation and/or non-appearance, general and commercial liability, harm/injury/death/disability to the audience, performers and production staff, and the like. The producer will likely have created the concept and format of the production, and is typically responsible for the payment of 100% of production costs, which in the 'top-tier' cable/satellite markets and in the prime-time network broadcast category can easily run into the low several millions of dollars. The producer will have been the one to have secured the broadcast-license agreements and possesses a unique set of skills, knowledge and experience necessary to undertake a production of this nature, have the TV-industry relationships within which to place/cause the production and its broadcast and, at the network and top tier cable/satellite broadcast level, possess the qualifications to be approved by the broadcaster as the 'showrunner' for the production.

It takes years of experience and relationship building to achieve status as a showrunner, known for bringing high-quality productions in on time and on budget. Further, the delivery of the production for which the initial broadcast is truly 'live,' with the initial broadcast occurring simultaneously with the performances, takes a particular skill set that very few producers have a track record of accomplishing successfully. In fact, at the highest level of network variety/'live in concert' prime-time special production, there are perhaps five producers in the U.S. who deliver 80% or more of all such programming.

Next, the label will generally have invested several millions of dollars in establishing the name-brand recognition and goodwill of artists appearing in the production, and may well have a hugely unrecouped royalty account with the artist. The labels often view the producer as a pariah seeking to capitalize on the human resources and financial investments that the label has undertaken to establish the artist's career. Within the label itself, there are also competing interests. On the one hand, the marketing and promotion departments seek, to the fullest extent possible, to obtain and maximize the promotional exposure that the artist obtains (at no cost to the label's marketing budgets) while, on the other hand, the business-affairs departments seek to protect the label's exclusive recording rights and maximize the label's revenues exploitation of the artist's performances in the production. (The business-affairs department of one major label is rumored to have issued an internal edict that under no circumstances will that label agree to waive exclusivity absent payment to the label. If this is truly the case, this could create even more internal discord at the label when the business-affairs agenda conflicts with those of marketing-and-promotion department objectives ' and those of artist and artist manager.)

Complicating both the internal workings at the label and the process of securing waivers on the producer's behalf is the fact that the labels have now established 'new-media' departments that are responsible for such new media/digital rights as streaming and/or downloading of the production and for the artist's performances involved. On occasion, the label will contribute to the costs of the artist's set and set design, accompanists, dancers, travel, hotel and cartage costs, and any factors that may be unique to the artist's performance, if the level of visibility for the broadcasts is considered to be great enough.

And the artist will want to benefit from the marketing and promotional opportunities of performing in the production and from the often-extensive marketing campaigns undertaken by the broadcaster to promote the production. The artist will also want to profit from any financial remuneration that may flow from the producer's exploitations of the production and from the label's exercise of so-called 'reciprocal rights.'

Part Two of this article will include discussion of copyrights in artist TV performances, reciprocal rights with record labels, holdbacks on exploitation, and warranties and representations.