Netflix and our collective futures..aka…are you depending on BackEnd?

[LAwriter]

Just a FYI for those writing for Netflix shows and for other streaming services – OR – for those who are depending and/or believing that back end performance royalties will save their bacon….

A little reality check….

I have a buddy who I’ve known for several decades. We played on the road together for quite some time and he is a brilliant writer and musician – and in demand for a specific writing skill set that he has honed.

About 10 years ago, we were both on the same page. We were both looking for a different future. I was tired and wanted OUT of hollywood films, he was just getting the itch to write for TV and was getting slotted into writing for some of the larger studios in hollywood.

Fast forward 10-12 years….

Said buddy landed a nice cushy gig with a a multi season contract with a major hollywood studio. Unbeknownst to him when signing, said hollywood studio was in the process of signing a streaming deal with Netflix – placing all seasons of his show exclusively on Netflix. This was big hollywood and wall street news.

When he signed up to write music for this multi season show, he was depending on backend, as the front end budget was not huge, and the show was brutally difficult to deliver on time, and expensive to produce while making the deadlines.

After all the seasons were finished, delivered and “on the air”, the verdict came in : almost 1200 minutes of music written, and the BMI backend from Netflix – between $300-400 per quarter – for all seasons. Mind you – 1200 minutes of music – with vocal songs too.

The sheer brutality of this is hitting him in the face at this point in time. He’s weighing his options, looking for a new show, and even considering moving. He can write from anywhere, but Hollywood is EXPENSIVE to live in. Needless to say, he will pay CLOSE attention to where any new show he takes on is slated to be broadcast on. This realities of writing music for barely enough to produce it, combined with the shocking news of how much Netflix/BMI pay out per show has hit him very hard.

We recently hung out for a few days and he asked about my royalties – and where they were coming from.

I mentioned that I saw backend’s demise in the headlights and that I believe front end sync’s are the future, and that’s when he shared the above numbers with me. I was dumbfounded. I knew Netflix and BMI sucked from my own experience, but those numbers for that amount of music was beyond what I could have even imagined. Luckily, the Netflix shows that I have scored are also on Cable, etc. – not exclusive to Netflix, so my numbers are still viable and good. But for how long?

If you have not figured it out yet – Netflix, the streamers and your PRO do not have your best interest in place. It’s inevitable that all our music and the shows we write for will end up there – there’s zero doubt about that. But unless things change radically, we are going to be in trouble.

How many of us have the equivalent of 1200 minutes of music licensed, placed and in a big studio series with visibility on netflix – available 24/7??. Ummm…not me. Thankfully.

If you’re blindly believing in back end to make your writing financially “worthwhile” – this is your wakeup call. I suggest changing businesses now, or completely revamping your business strategy.

It’s quite possible that front end will replace back end as the main source of writing income in the very near future. And if you are signed exclusively, with a small up front buyout fee – or WORSE – NO fee – you are extremely hosed when all goes streaming. Your back end is going to melt faster than an ice cream cone in Death Valley on a hot summer day.

May God have mercy on all us creative souls….we’ll need it as we battle big tech, greedy PRO’s, and libraries who believe that a 1992 business model is still viable….

[Art Munson]

Bump

[Happy Ears]

After 7-8 years of steady back-end income from library music, predictable within $1-2K every quarter (which has been my main source of income) this year it’s sunken 50%. I thought it might have something to do with the dollar being overall weaker ex if the PRO collects fewer dollar fees (from overseas) in a particular year it will drag everyone income down too? Or that BMI changed the rules in 2015 on how they pay royalties (counting view ship per show)?

Ironically enough I was expecting this to be my best year as I have more music out there than ever.

Kinda feels like I got fired but hopefully, it will pick back up next quarter if it goes down I guess I got to look into other markets or (professions).

LA Writer bring up many eye opening and scary points. Perhaps it’s just the end of the back end era.

Re PROs

Have anyone with ongoing regular placements in cable experience with switching from BMI to Sesac? How is Sesac paying in comparison for back end royalties (cable) to BMI? (I know Ascap is worse for back end cable so I’m not switching to them).
Although BMI has been good to me in the past, I’ve always felt left out when it comes to customer service and transparency. Customer service at BMI seems only to involve being redirect to an answering machine.

[NY Composer]

It’s quite possible that front end will replace back end as the main source of writing income in the very near future. And if you are signed exclusively, with a small up front buyout fee – or WORSE – NO fee –

LA Writer,

I am taking a guess that you are a very seasoned writer that has business contacts that may span decades. As for guys like me, who have a few years under their belt of Production Music, where are these libraries that offer front end? That was a rhetorical question of course. Perhaps you have extended contracts from these Libs back from the glory days but these days, it’s very hard to find any Libs with front end payments.

I’m positive if I was a known name in the industry, I would be able to command front end as part of a deal.

[Michael Nickolas]

Thanks for the post LAwriter. I’ve had music on netflix in a much lower scale than your example. Three feature films that found their way from theater to premium cable to netflix. I can confirm it is very disappointing, even down here.

Danial, I did a front end deal earlier this year for a ten song collection. And yes, it was based on a contact I had from years back. The collection did not generate any response from other companies I reached out to; companies whom I didn’t have a relationship with.

One hurdle I’ve noticed in trying to work with a new and perhaps higher level library paying upfront is timing. I have a contact at one of these libraries, and for every project I offer it’s usually “oh, too bad, we just released something similar, don’t need it”. Unfortunately, he doesn’t write me ahead of time with their needs. I looked at their website recently. The new releases were made up of 15 different styles. I couldn’t find a hole that needed filling.

[Music1234]

@ LA Writer, While I feel bad for your friend he really needed to negotiate a work for hire fee that covered all the work he was asked to do. When you are asked to do original “scoring to picture” work the compensation should be based on a work for hire fee. I have no idea what one would charge, but I would think that it should be based on a price per episode or price per minute of music, or fee per cue. My world used to be 10 to 20K to score a 30 second spot. Original scores for tv spots are still commissioned but a lot less these days.

So while your friend feels taken advantage of, why wasn’t he asking questions? Why wasn’t he negotiating a compensation model where he felt fairly paid for the work he did?

Folks, writing original music to briefs for exclusive libraries for $0 and only the hope of back end performance royalties 9 to 18 months down the line is not a business. It’s a gamble and prayer. You may only make $100 on the placement. You may make $0. Publishers/ Music Libraries who essentially are suppliers to production companies simply need to invest in original music production for their TV shows. Everyone else gets paid: the actors, the editors, the shooters, the director, the gaffers, the assistants, the producers. No one involved in the production of a TV show, TV spot, or film is working under this pathetic model of “Well you just wait and hope that those back end performance royalties show up in a year, we all are getting paid salaries and free-lance hourly day rates, you composers work for free now and hope that the PRO sugar daddy shows up with a bonus for your labor and creativity…and oh…by the way, we own and control the cue you nicely made in perpetuity, Thanks for the free cue!”

@Daniel, you are kind of missing the point about what LA writer is saying about “front end”. He is also taking into consideration the direct licensing markets (AKA RF markets). Those markets are when people pay you immediately for the cue. They license the stock music right then and there and you are paid (add to cart/ buy now). That is “front end” meaning you are paid immediately for the license sold. I don’t care what anyone says but when someone buys a license on these sold called “royalty free” sites, we are getting paid a royalty, immediately. By the way, I am having very good success at $50 a track so I encourage all to raise their prices to $50, $60, $70. It really depresses me when I see so many people selling for $20. If you believe in your stuff and you know you can compete with what you are hearing from UMG and other major label sounds, price your music at $50 on the direct licensing (add to cart/ license now) markets.

Another definition of “front end” is the work for hire fee, consideration fee, or advance fee. It’s all kind of semantics which term you chose but they all mean the same thing. This is when a library or production company approaches a composer and asks them to write music for a specific purpose (TV Show, TV Spot, Film, Video, Game, app, or even for a new album release of a production music genre like (minimal sci fi underscores, or epic sports rock, or Bombastic Trailers). A composer should be paid when asked to write for a specific purpose INCLUDING NEW RELEASES by production music libraries. Yes publishers, look in the mirror and stop this practice of not investing in what you need. Quit asking people to write in exchange for “maybe” back end in 12 to 18 months. If you don’t want to pay for cues and original scores, then you stay up late and write the music yourself. Remember, everyone else is getting paid when tv spots, tv shows, and films are getting produced. There is money for everyone, so producers need to set aside some money for composers. They need to be paid too, up front, for the work they do. Those of you who continue to write for free and hand over cues for a publisher to control in perpetuity, you too look in the mirror, and ask “why am I doing this?”

LA writer and I are telling you point blank that this is a failed model. It’s not sustainable and you are doing yourself and the entire business a major disservice by engaging in this. Personally, I like back end and front end…we need money from all ends!

The Streaming/ Netflix/ Hulu/ etc problem needs to be resolved immediately and if anyone invites you to write cues for a Netflix only show you better ask for work for hire compensation that makes sense for the labor and creativity you contribute to the show.

[LAwriter]

re: my buddies front end – he was paid a fairly normal front end buyout fee. But, he happened to sign his contract right during a crack in time where the studio moved it’s assets over to Netflix, and then delivery requirements and life pushed harder than expected. The old paradigm of “assumed” crept in. He assumed the series would be on network/cable TV as it had been for the last several years. If he had a savvy attorney or agent negotiate his contract, perhaps that little crack in the fine print would have been seen and negotiated, but I don’t think it was even in the fine print. It was a business decision way higher up the food chain that happened almost concurrently. Another funny thing though is that since the back end on the PUBLISHING side is lower for the studio, the studio wants to pay LESS up front. Go figure that one out…. “We’re going with Netflix so we have to pay you less up front cause we’re getting less on the backend”. He got past that one successfully when they tried to renegotiate (Netflix bit them too), but it still didn’t help his writers back end.

Episodic TV in 2017 is not paid out like scoring a TV commercial 20 years ago. That’s reality. I’m sure sitting here today, he’d probably wished he had taken a path similar to mine vs. the episodic TV on Netflix path he ended up on.

Yes, sorry I didn’t differentiate very well what I meant by “front end”. I meant that the PREFERRED front end for me is owning my copyright and being able to monitize the sync fees produced buy a piece of music myself INSTEAD of selling it to a traditional library. Those styles of front end payment are no longer desirable to me based on the current rate of up-front buyout payments – which are somewhere between $0 and $1000.

Agreed – Netflix, Hulu, etc and the PRO payments they make need to become more transparent, and writers NEED TO KNOW where the money is going. I suspect it’s headed towards BMI and ASCAP’s favorite projects. Because this money is “new” and has no traditional flow of payment, it’s easier for them to slide it around to places it shouldn’t be funding.

I don’t know if the traditional model has “failed” as music1234 suggests, but it’s certainly failed for my buddy. And as a traditional writer, I can see the CLEAR writing on the wall.

Why everyone is scrambling to try and secure “exclusive contracts in perpetuity” is beyond me. I think maybe it’s easier to believe a dream and let someone else hold “the responsibility for your destiny” than to think hard and pursue a more difficult path that will ultimately pay better.

But the math is easy – If you’re taking $100 up front for your compositions, that’s only 3-4 micro licenses. If your music is half way decent, you should be getting dozens of licenses over it’s lifetime.

[LAwriter]

re: my buddies front end – he was paid a fairly normal front end buyout fee. But, he happened to sign his contract right during a crack in time where the studio unexpectedly moved it’s assets over to Netflix, and then delivery requirements and life pushed harder than expected. The old paradigm of “assumed” crept in. He assumed the series would be on network/cable TV as it had been previously. If he had a savvy attorney or agent negotiate his contract, perhaps that little crack in the fine print would have been seen and negotiated, but I don’t think it was even in the fine print. It was a business decision way higher up the food chain that happened almost concurrently. Another funny thing though is that since the back end on the PUBLISHING side is lower for the studio as well, the studio now wants to pay LESS up front. Go figure that one out…. “We’re going with Netflix so we have to pay you less up front cause we’re getting less on the backend”. He got past that one successfully when they tried to renegotiate (Netflix bit them too), but it still didn’t help his writers back end.

Episodic TV in 2017 is not paid out like scoring a TV commercial 20 years ago. Thats reality. I’m sure sitting here today, he’d probably wished he had taken a path similar to mine vs. the episodic TV on Netflix path he ended up on.

Yes, sorry I didn’t differentiate very well what I meant by “front end”. I meant that the PREFERRED front end for me is owning my copyright and being able to monitize the sync fees produced buy a piece of music myself INSTEAD of selling it outright via work for hire to a traditional library. Those styles of front end payment are no longer desirable to me based on the current rate of up-front buyout payments – which are somewhere between $0 and $1000.

Agreed – Netflix, Hulu, etc and the PRO payments they make need to become more transparent, and writers NEED TO KNOW where the money is going. I suspect it’s headed towards BMI and ASCAP’s favorite projects. Because this money is “new” and has no traditional flow of payment, it’s easier for them to slide it around to places it shouldn’t be funding.

I don’t know if the traditional model has “failed” as music1234 suggests, but it’s certainly failed for my buddy. And as a traditional writer, I can see the CLEAR writing on the wall.

Why everyone is scrambling to try and secure “exclusive contracts in perpetuity” is beyond me. I think maybe it’s easier to believe a dream and let someone else hold “the responsibility for your destiny” than to think hard and pursue a more difficult path that will ultimately pay better.

But the math is easy – If you’re taking $100 up front for your compositions, that’s only 3-4 micro licenses. If your music is half way decent, you should be getting dozens of licenses over it’s lifetime.

[Music1234]

The traditional model of 1K to 1.5 K for an “exclusively represented and published cue in perpetuity” and writers share is not a failure.

$0 for a cue and grant of rights that say “exclusively represented and published in perpetuity”.

This is a failure.

I have to admit that costs to produce high end music have come down with the sample libraries so even I’;d say 1K to 1.5K for a cue is far fetched. That budget used to be based on using a bigger studio, hiring some players to record several cues or an entire album, using an engineer, mixing, etc…

With most of us in front of a keyboard and computer and guitars next to us ready to plug and play, and everyone doing their own mixing and mastering, I do admit the cost to produce has come down. But time, creativity, and labor should still equate to compensation. $250 to $750 for a cue seems fair to me. Just depends on the genre you are asking for. Does it require 20 insts, or just 6 or 7? Do you need a 60 second track or a 2.5 minute track? Those variables should define the advance/ consideration fee for a commissioned cue based on a brief.

[LAwriter]

$0 for a cue and grant of rights that say “exclusively represented and published in perpetuity”.

This is a failure.

Agreed.

The ONLY reasons that libraries can ask for this with a straight face (and even then, I don’t know how they sleep at night) is the mistaken assumption that you must be in an exclusive library to land broadcast placements. This is simply not true. And while certain networks have requested that ONLY exclusive music be placed into their database, there are loopholes, and eventually, once the “exclusive with no up front buyouts” burn out, these libraries will be forced to either pay handsomely up front, or allow non-exclusive placements again.

[Abellboy]

LA Writer mentioned Micro-licenses, and I just saw something on BrandX Music’s site that seemed a little like a “canary in the coal mine”….

They now have a “micro license” option…

Now, I think to myself, why would a company that gets all kinds of high-end placements and a catalog of 4000+ songs make their catalog available to YouTubers and student films?

Aren’t they essentially turning their catalog into Pond5?

I honestly don’t understand that business model.

I am no expert on any of this, and am so grateful for this site (I always learn so much), but I really can’t figure this out.

It makes me not want to go beyond Pond5 and just do RF. Not sure that’s a wise move, but it seems that everything points to that.

I am producing a “higher end” album now with some real players, and mixing and mastering by other engineers, and all this really concerns me.

I really hope this project doesn’t turn into a “vanity project”.

[Daniel]

@Daniel, you are kind of missing the point about what LA writer is saying about “front end”. He is also taking into consideration the direct licensing markets (AKA RF markets). Those markets are when people pay you immediately for the cue. They license the stock music right then and there and you are paid (add to cart/ buy now). That is “front end” meaning you are paid immediately for the license sold. I don’t care what anyone says but when someone buys a license on these sold called “royalty free” sites, we are getting paid a royalty, immediately. By the way, I am having very good success at $50 a track so I encourage all to raise their prices to $50, $60, $70. It really depresses me when I see so many people selling for $20.

Music1234,

I have been around a little longer than you may think. Of course I know about RF or NE Libs are where you get paid. IMO it’s not worth spending hours tagging metadata for a 50.00 sale to be used in a High School film. It’s also becoming more prevalant where these libs are setting their own standard fee for 20 or 30 bucks.

When I was commenting about LA Writer’s post, I was refering to upfront money which was hundreds for a track or thousands for an album which he did or still does receive.

[NY Composer]

Sorry for the quote mixup. For some reason I can not edit my post immediately after posting it on a Mac.

[Paolo]

@LAwriter

there are loopholes…

Loopholes for the composer or the library to exploit?

…and eventually, once the “exclusive with no up front buyouts…

the tide may already have started turning away from perpetuity. I’m seeing exclusive contracts that have no upfront, but have short-term reversion clauses.

[BEATSLINGER]

Hello to all. I did read a lot of the comments, but didn’t digest them all. But, here is something that I think is on the horizon..

I have the strangest feeling that WE Composers/Writers are about to see some MAJOR head-way in our PRO’s legal battles with the now Streaming Giants! I think that when Amazon, Hulu, Netflix, and others were starting; most thought they were a “niche market and would not become a major competitor”. NOW, everyone is seeing the effects of not having the proper agreements in place. We as composers are seeing that we are being robbed. The PRO’s are being ROBBED!

If I am not mistaken didn’t something similar happen with the “unexpected growth” of Cable TV? WE need to force the hands of OUR PRO’s; and get these legal procedures moving faster!!

[Author]

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