"Famous Last Words"

Hold Onto Your [Music] Rights ( March 2007)

Dear Jim:

I am in the process of putting together a contract for game music, and the payment is mostly in the form of getting a straight percentage of sales.

How does one normally go about verifying those sales? I am wanting to include something which sounds like this:

"Supplier will have access to sales figures in the form of <something>".

I mean, I don't really want to say that they have to give me access to all their financial records, but neither do I want to simply take this guy's word for it. (Had enough of that in the music biz, and that was with publicly-traded companies) How does one normally check sales figures for payment, just by asking for a quarterly or semi-yearly sales statement?

Composer Not Accountant

Dear Composer:

Last month we focused on the question of accounting and audit clauses in your music agreement.

This month we will turn to the basic structure of your deal.

If payment for your music is in the form of a “straight percentage of sales,” and you are not being compensated for your compositional work, arrangements, production, conducting, or performance of the master recordings, you might consider a strategy used by composers in low low low budget motion picture projects.

Rather than conveying all rights in a typical “work-for-hire” grant to the publisher or developer (or producer, if this were to be a motion picture), it would be far preferable for you to retain all ownership of your music and simply license the rights needed for the game to your client.

The game publisher (or developer) needs music for the project. If it is not willing to pay, you are, in effect, financing the musical element.

But you are a composer, not a game publisher or bank. It is generally regarded as the job of the publisher (or developer if you are its subcontractor) to provide financing.

If it fails to do so, I am hard pressed to be able to find any way to justify granting ownership rights to the music.

You can license your music for use in the game – preferably for use only in the initial SKU or system version.

If the game were to be successful and ported to other systems, or redeveloped as a sequel, and there was demand for your music in these subsequent versions, under the licensing scenario the publisher would be required to come back to you to license further rights.

If there is an expectation that this will take place, you can always negotiate license fees for subsequent use of music in later ports or versions. Such a circumstance is called an “option.” You would grant the publisher the option to use music under certain terms in the future – and it is up to the publisher to “exercise the option” – when it is ready to do so (if ever). Each subsequent use should require a cash payment at the time the option is exercised.

As both the copyright owner and composer of the music, I recommend registering each composition with your performing rights society (ASCAP or BMI). If the music were to be used in television commercials, for example, you may earn performing income.

As the owner of the copyright in the music, if the game were to be developed into a motion picture, and there was demand for your music, license fee income for such a use could be high.

Your music is intellectual property that you have created. When you make a deal for it, be sure you are fairly compensated for your time, creativity, and talent.

Licensing rather than granting broad ownership rights, when there is little or no front money, is a good way to maintain control of your work and hold onto rights that could pay off in the future.