"Famous Last Words"

The Treatment of Music in Games - Part 3 (October 2005)

Dear Readers:

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

Over the last two months, we have discussed the differences between licensed incidental music and underscore as each appears in games.

Licensed music is music acquired from outside sources. It is preexisting music that is licensed directly from artists, or record companies and music publishers, then slotted into the game.

Underscore is original music custom composed for the game. Ownership of underscore is typically transferred to the game publisher along with all other assets that together comprise the audio-visual work that we know as a game.

But underscore is unique among these assets in that it can have a life apart from the game. Ancillary uses of underscore can generate income if it is managed properly. And as we discussed last month, based on common business practices in other segments of the entertainment industry, the composer generally shares in ancillary revenue generated from the music.

With only a few exceptions, game publishers have been slow to recognize the economic potential of underscore. By investing the time to develop and exploit this property, publishers could see revenue today, and build a catalog that could become an important and valuable asset in the future.

OK – so how would a publisher go about this task?

The first step would be to develop a survey of all the original music from all the games owned by the publisher. Each composition could be cataloged by title, composer, and the game in which it appears.

Each composition could be captured on audiotape or as a digital file so that it exists apart from the game. In doing so, the publisher is creating a catalog of tangible assets.

The copyright of each composition could be registered in the office of the Register of Copyrights in the Library of Congress.

The game publisher should affiliate with either ASCAP and BMI as a music publisher. In order to do so, it must show it owns musical compositions that are being performed. Use of compositions on an audio CD, or in television advertising for the game, should be sufficient.

When the game publisher becomes a member of ASCAP or an affiliate of BMI, it will have to complete registration of each musical composition in its song catalog with the performing rights society. ASCAP or BMI have forms that provide for the title, composer, and music publisher of each composition.

The composer of each composition should be asked whether he or she is a member of ASCAP or BMI. If the composer is not yet affiliated, he or she should be encouraged to sign up. Until a composer is affiliated with a performing rights society, he or she will not receive the composer's share of performance income generated by his or her work.

If the game publisher discovers that composers who have provided music are members of both ASACP and BMI (or SESAC, or any other societies), the publisher may want to set up separate music publishing companies affiliated with each society. One publisher, just like one composer, may not be affiliated with more than one performing rights society.

Once these steps have been taken, the games publisher will find itself in the position of a music publisher with a catalog of compositions.

As a music publisher, the agreements it enters into with composers should follow the generally accepted form of “song” agreement or “writer” agreement used by publishers when they acquire a composition or engage a staff writer. Under each such form of agreement, ownership and control of the copyright is transferred to the music publisher – subject to an obligation to pay royalties to the composer under certain circumstances.

Contracts of a sort commonly used today, where all rights are transferred by the composer (often as “work for hire”) on a flat fee basis, with no ongoing interest, are viewed in the music industry as extremely unfair and associated with the most exploitive or shady operators.

If the game publisher decides it does not have the interest, means, or staff to manage its catalog of musical copyrights, there are resources available to take on the responsibility.

The Harry Fox Agency, a division of the National Music Publishers Association, can issue mechanical licenses.

Larger music publishers, whose primary business is exploiting copyrights, can make co-publishing or administration deals to manage all phases of exploitation of games music catalogs. Terms of any such deal are subject to negotiation, but frequently include an advance on income to be generated by the catalog.