English · Interviews

Creating a Successful Licensing Business as an Independent Musician: Part II of Interview with Japanese Composer/Musician Tatsuya Oe

To Read Part I of the article CLICK HERE

tatsuya

Tatsuya Oe (オオエタツヤ)renowned independent Japanese composer, recording artist, music producer and DJ, best known for his recordings as Captain Funk(Tatsuya) OE, and Dark Model, as well as for collaborations and remixes with numerous artists including James BrownDiana RossChicSimon LeBonRon Sexsmith and Serge Gainsbourg, has also thrown his hat into the creative chair working with TV, Film & advertising. It was a great pleasure to interview him on the state of the music industry and future for independent artists both locally and globally in sync licensing:

What about In the rest of the world?

Generally speaking in the US and the rest of the world, there are obviously some trends and fixtures in licensed music, such as energetic and anthemic Indie Rock, dreamy Pop Electronica, quirky Acoustic Pop, epic Trailer music, Dubstep and Glitch Electronica, minimalistic Modern Classical, etc. Diversity works a lot here as well, but there is a huge difference in how it actually works. Unlike Japan, in the US and Europe stocking a wide range of “pre-existing” & “pre-cleared” music tracks means a lot. Music supervisors and licensing companies are always seeking tracks, which can be cleared “right now” and are ready for use. Frequently they even ask for stems or just one shot of the track. And you never know who will want what kind of music from my catalouge of pre-existing music tracks. I think this is a very exciting situation.

When it comes to my own music placements, my latest sub-brand Dark Model’s (http://www.facebook.com/DarkModelMusic) music focusing on Edgy Hybrid/Orchestral Electronica seems to be in great demand. Since Dark Model was launched, its music has been licensed and used on Hollywood movie promos such as “Elysium (2013)”, “The Paperboy (2012)” as well as advertising campaigns in the US as diverse as Verizon, Lexus andOakley to name just a few.

Now, let’s change tracks, how do you, as a rights creator and owner, typically go through the licensing process?

There are several approaches I take to get my music licensed:

  1. Direct deal with licensors who want to use my music for their project (in domestic and international licensing).
  2. Via licensing companies and services (in international licensing).
  3. Via the copyright society (in domestic licensing, which would be very specific in Japan).

Regarding Approach 1, I often deal with friends and acquaintances that I have worked with before. Additionally, as I have my own library organizing my pre-existing and pre-cleared music both on my artist website (http://www.tatsuyaoe.com/music) and my company website (http://www.model-electronic.com/), licensors such as music supervisors, creative directors, film directors, etc. are able to reach me and complete one-stop licensing deal on a global basis.

As to Approach 2, several licensing companies, mainly in the US, facilitate pitching my music and negotiate with licensors on my behalf. This kind of service has emerged over the past decade and some companies are doing a great job for me. Building a strong relationship with them allows you to leverage the potential of your music, but of course, you have to do your homework beforehand.

As to Approach 3, in most cases, licensors in Japan only have to negotiate with and pay licensing fees to JASRAC (Japanese Society for Rights of Authors, Composers and Publishers) on the basis of their statutory rates because they can administrate all copyrights such as performance, mechanical, and even synchronization rights on behalf of us unless you ask JASRAC to exclude some of them. This is limited to domestic operations and is very different from the US where neither PROs nor MROs handle synchronization rights.

What do you think can be done to make the music licensing process and business more fair to better work on behalf of artists, rights holders and producers?

Well, I don’t really think the business is innately ‘fair’. The music business has always been competitive, full of ups-and-downs and politics. However, you can protect yourself by assessing what you can create or control and then focus on that – your own opportunities, business resources, relationship, communication skills, and of course, quality and quantity of your music. That’s a much more productive way to look at business.

This means organizing your music tracks with necessary tags (composer, publisher, master owner, genre, atmosphere, BPM, sound likes, etc), making your own library/portfolio so that media professionals can audition/evaluate your music immediately, checking with licensing companies, organizing your contact list, packaging your show reels, updating your news about music placements, etc. After that it’s all about networking and building a good relationship to increase the opportunities of getting your music licensed.

When it comes to sync licensing, we can get music licensed and used only after some buyer/customer/client really wants to use it for their project. Unless you already have a successful catalog of hit songs or rare opportunities such as tie-in promotions, your stature as an artist and popularity in the music market actually has little to do with your success in placing music. Music supervisors and directors see how your music will match or enhance their project including its concept, target, scene, marketing issues, etc., and unlike label A&R, they don’t care if you’re a great artist with an awesome photo or bio.

We sellers have to figure out what will make buyers use your music in order to close a decent deal. That’s a marketing issue, but I believe that ultimately it’s an issue of building  relationships and credibility.

And this is actually what licensing companies or production/library music companies do for their client. So if you are an artist or rights holder who wants to get your music licensed, just learn from what they do. It’s not smart for an artist, especially an independent one, to think ‘that’s their job, not mine’. You should have a ‘dealer/merchant’ mindset. And, studying the media and how your music could be used is essential. If you’re interested in sync-licensing your music to trendy TV programs, watch them to learn what songs are used in them. If you’re interested in music placements in automobile ad campaigns, research what clients use what type of music toward whom (target).

Let’s talk about technology – do you think it can help artists improve the way they do business?  

Definitely. Especially if you’re an indie artist. It could help you leverage your network and the potential of your music, but it could also work the other way around. Like I said before, regardless of whether it is a direct deal with clients/buyers or a deal via licensing companies, you would need very different skills and knowledge from garnering ‘Likes’ or plays/listens on general social network websites.

I would hope that technology can accelerate the democratization and openness of the music licensing business, but it should be limited to small or mid-scale projects for web/TV/films/ads on a non-exclusive-basis. But, I don’t think when it comes to music licensing to broadcast TV, big budget commercials, or Hollywood (box-office) movie trailers, we can let the whole process become ‘automated’. No matter how technology evolves, the bigger the budget or placement is, the more dependent on individual skills and exclusive the deal becomes.

And what about technology improving the way music supervisors and other right buyers do business?

Generally, it should. But when it comes to finalizing the deals, it would not apply to all buyers. Top-notch music supervisors and directors in the know have already had strong business connections and a clue to find the music they want and finalize the deal in time. They also might use Soundcloud, Youtube, Spotify, and database services such as AllMusic to search music or bands, but that doesn’t necessarily mean they bother to take time reaching out to their favorite but unacquainted composers or publishers directly. Having said that, for buyers such as those who are seeking music at a modest price, web-based matching services for non-exclusive licensing deals would help a lot. 

How would you like to see the rights market evolve? What would a better rights market look like?  

Honestly I don’t see the market from the futuristic or macro point of view because music licensing business and copyright operations differ so greatly depending on territory.

Regarding sync licensing, some markets such as Japan are specific with a low liquidity while the US and UK rights markets are flexibly moving forward to open competition and seeking the next possibilities for monetizing music. Personally I think this “liquidity” is the key for the next era of music licensing.

This may be particularity limited to Japan market, but some copyright authorities still seem to confuse rights business with culture, or even something more academic or metaphysical. While they claim their possessory rights or exercise their rights to claim when abused, some of them abhor the tendency of music being regarded as financial, cashable/exchangeable asset. Perhaps they haven’t been able to shift out from their old comfort zone. Or, the silver platter environment where you don’t need to negotiate with licensors directly might have allowed them to live with such an illusional way of thinking.

By the way, in our traditional accounting standards, or at least in Japan, calculating music copyrights as potential cash value or financial asset hasn’t been accepted except in cases of M&A or buyout. So, not only banks and investors but also publishers and copyright organizations (unless they’re subsidiaries or branches of global mega publishers) haven’t gotten into the habit of considering music rights in terms of cash value. That lack of asset management mindset, or rigidity, could affect the potential of developing their portfolio globally in the future.

While we still have a long way to go, I hope each rights market will grow to be more mutually complementary, flexible/fluid, deal-friendly and transparent – not to say it should become like a stock or real-estate market. All we have to do now is to learn the differences and find the opportunities of each market, and make the most of them.

Via discOnic

English · Interviews

Interview: Devo’s Gerald Casale Talks Licensing, 360 Deals and Syncs: ‘The System Has to Get Better’

Gerald V. Casale, co-founder and chief strategist of the seminal new wave band Devo, has more experience than most when it comes to the ins and outs of the music rights licensing market. As co-writer of many of Devo’s songs – including consistent earners “Whip It”, “That’s Good” and “Beautiful World”– he’s seen sync rights contribute significantly to the band’s bottom line…

Gerald V. Casale, co-founder and chief strategist of the seminal new wave band Devo, has more experience than most when it comes to the ins and outs of the music rights licensing market. As co-writer of many of Devo’s songs –  including consistent earners “Whip It”, “That’s Good” and “Beautiful World” – he’s seen sync rights contribute significantly to the band’s bottom line.  Early in their career, the group saw the opportunity to expand their revenue streams beyond label and publishing deals into merch, sync, endorsement, touring, multimedia and production, taking a more businesslike, corporate outlook towards their band and brand — one that many perceived as tongue-in-cheek at the time, but turns out to have been prescient.

And, as a producer and director of TV ads (Miller Lite, Nintendo, World Health Organization) and music videos (Foo Fighters, Rush, Soundgarden), he’s been involved in both buying and selling of music rights and is a witness to the (d)evolution of the marketplace. We caught up with him earlier this week to get his take on Devo Inc. and today’s music business.

Q: What’s your take on the state of the music licensing market today?

A: Let’s start by going back a bit. Up until the 1950s, artists had almost no power, no control over their rights, and almost all of them got ripped off.  Starting in the 1960s, this all changed for the better: Artists started to get an idea of the power they possess as hitmakers, and started to use that power to make sure they owned and would get paid for the music they created. Add that to the fact that for many years, labels thought that sync rights, at least until Napster came along, were “pie in the sky” they left to the artists and publishers. Licensing became more important to how artists make a living outside of label deals, alongside touring and merchandise. IFPI 2012 Report: Global Music Revenue Down 3%; Sync, PRO, Digital Income Up

 

Q. And what about after Napster?

A. Now you’ve got a situation where this source of artist revenue is being squeezed on all fronts, especially since 2008. Labels, publishers, music supervisors and the public have put the artist in a position where they feel their music has little to no value except for promotion.   At the same time, artists are being asked to give up a bigger piece of what little revenue is left from sync licensing by signing 360 deals, given the labels now get a cut of everything the artist does, including merchandise, live shows and sync licensing, while getting none of the traditional marketing and promotional benefits they used to get from a label. So what happens is that the artist gets less of a share of a shrinking pie – and the market comes full circle.

 

Q.  But the sync market seems to be growing if you look at the bottom line – how is the artist’s pie shrinking?

A: It’s pretty simple, most artists today have grown up in a world where they have to beg to get paid for their IP, and in some cases giving it up totally for some hope of future return. In the industry, this line of thinking works in the minds of newer artists that have been programmed to think that it’s okay to give up their rights for some sort of promotion, exposure or an audience — at least for the short term.

 

Q: And for the long term?

A:  The reality is this kind of thinking makes them completely disposable. Later on down the line, if they are lucky enough to make a hit, they own nothing. They have nothing to show for all of their efforts and can only sit and watch while people who had nothing to do with the creation of the hit make millions in perpetuity.

 

Devo: How To Get Ahead With Advertising

It happens like this – a band breaks when their song is featured in a national ad.  Then they sign to a 360 deal, give up their rights and never realize their true artistic or revenue potential while other people profit. It happens all the time.

 

Q.  So new bands are getting the short end of the stick.  What about more established acts and sync — like Devo?

A.  As I said before, when we were signed, labels really didn’t care very much about sync or take it seriously.  When we wrote those songs and were on shows like “Saturday Night Live” and “Fridays” in the 1970s and 1980s, sync was an opportunity… if anyone was interested.

With Devo, since the beginning, we’ve always looked for new and different revenue sources outside of our label deals – we were one of the first bands to take merchandising seriously, along with sync, touring and endorsements. In general, most music licensed for film, ads and TV was not rock and roll, and as a result, no one thought it would lead to a great deal of revenue, so they left it to us for the most part.  Starting in the 1990s that changed, and our music was in demand, and we knew it had real value.  For Devo, there was so much value in sync rights that we made more money from sync licensing starting in 1993 than we made from our label deals. [The group’s back catalog under is a co-publishing deal with EMI; catalog beginning with 2010’s “Something for Everybody” is under an admin deal with Warner/Chappell.] If that doesn’t illustrate how important sync rights are to musicians, I don’t know what does.  Sync, alongside merchandising and touring has become one of the main ways that Devo gets paid for its music these days as the music business had evolved. Anyway, even if we do know our rights and we doget paid, we’re getting squeezed too, on all fronts.

 

Q.  How so?

A.  No matter who you are, the process and the percentages that an artist has to pay off the top of a deal are onerous: 50% right off the top of the deal before you’re paid a penny.  50%!  All for the promise of getting your song out to the market. Add to that the fact that it takes anywhere from six to 18 months to get paid for a sync deal once it goes down; that the statements of payment are so unfathomable you need a lawyer and an accountant to go over them; and you can see that most artists are hard pressed to make any real money from sync when all is said and done. Everyone seems to get a payday but the artists. The system has to get better.

 

Q.  What do you think can be done make things better?  Do you think technology can help?

A: Yes, I think that the idea of a digital solution to this problem is a good one. In the digital world, none of this byzantine Kafkaesque bullsh– needs to exist. It can be very clean and simple… and believe me, artists and buyers would appreciate a simpler way of doing business.  What I think what would be nice, and I know it’s laughable to talk about fairness in a business predicated on onerous contracts, is that everyone gets their fair share if they do their job. The current system, where the rights aggregator makes 5X-10X more than an individual band member on a sync deal is anything but fair.  Maybe a digital system could change this system for the better.

 

Q: So if you had your way, what kind of sync market would you like to see, digital or otherwise?

A.  I’d like to see something that gives the artist a fair deal and makes it easier for the artist to connect their work directly to the buyer.  This means things like dealing with artists on a non-exclusive basis: if you do a good job for the artist, you get paid, and if you don’t, the artist is free to go to someone who can do a good job with placement.

 

Q.  And what about the financials?

A. As it stands, the percentages just don’t work. 50% is just way too much money to take from their artists. I think that something along the lines of 25% is much more fair since the artists took the lion’s share of the risk to make the work, and they should get the lion’s share of the return.  And when a deal goes down, the artist should get paid quicker, and the breakdown of payment and fees should be more clear-cut so the artist knows what exactly what fees they paid off the top to get their music placed. Now, when it comes to the publisher, either this type of service effectively becomes the publisher of record – working proactively to sell rights on behalf of artists, or working with publishers and the artist to more fairly divide the pie.

 

Q.  How about the way artists get placed?

A: You have to use both tastemakers and technology to help buyers find the music they need.  That means hiring people who understand both the music they’re selling and what buyers need, and using technology to help them along.  So that instead of churning through 100 songs to get to what they need, the music supervisors only have to go through 10 songs that are right for their particular need.  They also already know that the rights are not a problem because the terms have been pre-negotiated more or less. This will lead to better placements, happier artists and happier music supervisors. My only hope is that if a company like I have described is created, it becomes the model rather than another onerous situation.  And, if you did create it successfully, what artist would not go with that company? And what buyer would not want to use it?

 

Q.  Any final thoughts?

A.  Everyone from plumbers to artists wants to get paid for their work. Who doesn’t? When it comes to artists though, instead of getting paid, many of them end up making other people rich, getting critical acclaim and dying in a poorhouse or relying on the good graces of friends – and it shouldn’t be that way. Since it is the artists who take the risk of making a fool of themselves for their art and the chance to win big, when they do win big, and they should get paid what they deserve.

 

Courtesy of Mark Frieser / Disconic

Link: http://disconic.com