"Famous Last Words"

The Treatment of Music in Games - Part 1 (August 2005)

Dear Readers:

One of the hottest topics at the 2005 Game Developers Conference was the treatment of music and musical performances in games.

Taking a break from the practice of responding to reader questions, for the next several months we will consider music in games, how it gets there, how it generates revenue, and what rights and income streams can be reserved by the creative talent responsible for its development.

Issues surrounding the treatment of music are new to the games industry. One reason for this is until recently, hardware did not have the horsepower to support much more than an abbreviated audio component.

As systems have become more powerful, game producers and publishers have discovered what motion picture producers have known for nearly 100 years – artful use of music can deeply enrich the entertainment experience of the final product.

Music in games, as in motion pictures, consists of two components.

These are licensed incidental soundtrack music, and underscore composed specifically for the project. This month we will consider licensed incidental music.

Licensed Incidental Music

Licensed incidental music are master recordings owned primarily by record companies that find their way into a game or movie. Using contemporary hit artists and songs can give the game or movie street credibility with its intended audience. Using carefully selected “oldies” can call to mind the time and place when they were hits and quickly get an audience into the proper frame of reference. Games, like movies, now use a music supervisor whose job is to identify and source music that will be added to the soundtrack of each game.

Game companies and film producers must license rights to use these master recordings. In many cases record companies provide current recordings by newer artists free or at low cost because games and movies can be seen as important avenues of exposure. Classic, well known recordings or recordings by well known artists, on the other hand, can command motion picture license fees in the six figure range. Game companies have not paid comparably high license fees for incidental music – not yet, anyway.

When licensing a master recording, a second license from the copyright owner of the underlying song must also be negotiated. The copyright owner of a musical composition is also known as the “music publisher.” This license, known as a “synchronization” or “sync” license, gives the game or movie producer the right to synchronize the song into the game or movie – in effect, lay it into the product in a particular place or places in the game or movie. The language used may be that the composition is “synchronized in timed relation” into the property in which it is it licensed.

In this way, both the master recording containing the individual performance of the recording artist, and the underlying musical composition created by the songwriter, must be licensed.

A separate license fee must be negotiated and paid for each of these licenses.

The uses to be made of the music are closely negotiated in master use and sync licenses. For example, if the music is to be used outside the game in a soundtrack CD, television commercial, in-theater commercial, demo disk, at E3, or even on the web site promoting the game, an additional fee may be payable. The record company may choose to withhold certain rights. Use of this licensed music beyond the strict limitations of the license agreement may constitute copyright infringement.

Note that the recording artist and record producer (for the master recording), and the songwriter (for the underlying musical composition) do not necessarily have the right to authorize or block these uses, or to share in the license fees paid to the record company and music publisher. Their rights are all controlled by the contracts signed when they recorded or produced the master recording, or agreed to assign the underlying copyright of the composition to the music publisher.

Recording contracts generally provide that a portion of any licenses for use of master recordings are credited to the royalty accounts of the performer and producer. A standard in the record industry is 50% divided among the artist and producer.

Music publishing agreements generally provide that a portion of license fees collected by the publisher is credited to the composers' royalty account. The percentage can range from 50% (known as the “writer's share”) to 75% (if the writer were to retain a “co-publishing” interest in the composition with the music publisher) or more if the publisher is solely an administrator for the composer.

The recording artists, record producer, and composers would receive their accountings and payments from their respective record company or publishers.