which licensing models do you make the most/least amount of income??

[mojorising]

This question is for people who have had music in the licensing world for at least 3 years. I also figured this would be a good comprehensive summary of the models that exist, or at least the ones that are common. I know there are others, and there is over lap among these but one library tends to fall in to one category or the other in my experience. Many people on MLR have said that a mix of several of these models is best to maximize income, but I’m curious if people could comment on which models they have done the best financially from, and which ones they have done worst???

1. Non Exclusive – Sync fees plus back end
The most composer friendly model IMO. I have done the best with a library like this, but they seem to be a dying breed because of libraries offering Exclusive tracks, or the gratis stuff.

2. Non Exclusive back end only (gratis licenses)
This for me is ok if you spread it among a few good performing libraries and have lots of tracks, but these libraries tend to sell to small cable shows so the back end can be very low, (pennies low) but add up over time. I have done second best in this model financially.

3. Exclusive – Sync fees plus back end (Higher End libraries)
Like the PMA associated ones. Probably the hardest to get in to, and you land less deals but they can be much bigger. I’m good with this model.

4. Exclusive back end only (gratis deals)
I have done a library like this with several tracks that placed a ton in Fox Sports. But over 100 placements has added up to less than $200 over 2 years. So this model is not worth it at all IMO. Plus the library still gets up front money in the form of “blanket fees” which they often do not share with the artist. Its great for the library and for the customer, terrible for the composer. Anyone else?

5. Non Exclusive Royalty Free
to me this is like a discounted sync fee that allows us to hit smaller markets like Youtube videos and corporate stuff. If anything does go to broadcast you still get your publishing royalties so its not truly royalty free. The danger here IMO is if bigger network and commercials start shopping on sites like this and buying tracks for 30 bucks. The solution to me would be tiered pricing for usage, but many libraries don’t do this for some reason.

6. Exclusive Royalty Free
same as above but can’t spread tracks around.

7. Performance Free
This is the lowest of the low IMO. Correct me if I’m wrong, but if I have the terminology right on this, it means pay small up front fee, and no back end publishing royalties no matter what even if your song ends up as the next theme song to the daily show. The fear I believe many people here have is what if big network shows and commercials start shopping on sites like this!? Then we are close to hitting the bottom. I have turned down deals like this, and I think its dangerous for the industry for any serious composer to put music in to something like this. It hurts us all in the end and could really contribute to the race to the bottom.

[Mark_Petrie]

I’ve worked with 1 – 6, not really with 7 (performance free). My experience has been up and down with all of them. RF libraries had great years early on, then the past three, maybe four years have been much lower. High end buy-out libraries are somewhat consistent in royalties, but occasionally give a nice spike in income, depending on where the music ends up. The highest end of licensing – trailers and commercials – was something I moved into more recently, as my production got better. That world is a bit like winning the lottery – no money upfront, the company owns the music but there’s a chance you’ll get half of a big license fee.

FYI there’s a ‘3a’ and a ‘3b’ to use your categories: ‘a’ is exclusive, well paid upfront buy-out (like $800 – $2000 per track), ‘b’ is exclusive, no money upfront, 50% (or more if you’re lucky) share of licensing. I guess there’s a very rare ‘c’ as well: some upfront ($100 – $200) and a share of the licensing.

My advice is just like what you said, spread your music out amongst established libraries in a range of those categories. You never know what income stream will pick up, or dry out. With broadcast TV transitioning to PPV and a la carte viewing, Where will royalties be in ten years? No one really knows the answer to that.

Don’t just jump on the same library bandwagon as everyone else – I’ve been involved with some libraries that got a lot of attention from this site and the income dropped dramatically once an influx of new composers uploaded their tracks. Do your own research, like scouring the end credits of TV shows, to see what companies are supplying the music. Maybe you’ll find that perfect company that needs a lot of music but isn’t yet inundated with dozens of writers.

[wilx2]

Excellent post, Mark! Very much agree.

[guscave]

I’ve worked with all except #6 and #7. Most of my income started to come from Non-Exclusive backend royalties about 5 years ago, but some of those companies have moved to exclusive only deals and those tracks are starting to see some placements and backend royalties.

As far as upfront money from exclusive libraries, I’ve gotten maybe 2 checks in 5 years, and nothing from non-exclusive libraries. It seems like less companies are now paying upfront.

Non-exclusive Royalty Free gets me a check every month ranging from $30 to $300.

[mojorising]

FYI there’s a ‘3a’ and a ‘3b’ to use your categories: ‘a’ is exclusive, well paid upfront buy-out (like $800 – $2000 per track), ‘b’ is exclusive, no money upfront, 50% (or more if you’re lucky) share of licensing. I guess there’s a very rare ‘c’ as well: some upfront ($100 – $200) and a share of the licensing.

Thanks for this Mark you are right. To clarify, are you referring to the library “buying out” the tracks for that price, or are you saying the library gets about 800 – 2000 per track in sync fees when they land a placement, which you split with the library? so far I have only gotten one nice $2,000 sync fee. The rest have been closer to $200. I have never had a library pay me up front to buy the tracks out.

Another question, have you noticed a big difference in income from library to library per placement when they are back end only? Or do most companies like that sell to the same size broadcasts which generate the same or similar back end income?

I’m curious to see how many people respond saying that the Exclusive (sync fee + back end) option pays the most. Because if it really doesn’t then it goes to show you really do need to be in the different models. I have seen people say on here that if you are serious you should be in big PMA exclusives only.

Non-exclusive Royalty Free gets me a check every month ranging from $30 to $300.

Guscave, thats great that you get steady income from RF. I would love an extra 300 per month from royalty free. I just started this month doing NE RF’s for the first time, no sales yet. I’m still learning what works and what doesn’t in the RF world. Can I ask what you typically charge for RF track? And does anyone know why so many RF libraries only have a flat fee? Again what if something big buys your track, you should be able to charge more based on the usage.

[Mark_Petrie]

To clarify, are you referring to the library “buying out” the tracks for that price, or are you saying the library gets about 800 – 2000 per track in sync fees when they land a placement, which you split with the library? so far I have only gotten one nice $2,000 sync fee. The rest have been closer to $200. I have never had a library pay me up front to buy the tracks out.

I was referring to upfront fees.

Another question, have you noticed a big difference in income from library to library per placement when they are back end only? Or do most companies like that sell to the same size broadcasts which generate the same or similar back end income?

Well that depends on the library’s clients right? Where (what channel, what country) and when it airs. Also, one library might have a direct / exclusive partnership with a TV production company and get a ton of placements, then something happens a year later and the whole thing dries up. Or a deluge of music gets added to a library you’ve been doing well with, and your tracks are then lost in a sea of others. A show might be doing ok in the US, but for some reason does really well in Europe, so the international royalties are better than domestic. I’ve had a track make more than 100 other ones, just because it ended up as a theme for something, or because it was used on a radio ad a million times.

So the end of that long answer is yes, it varies, but mostly based on the success of the libraries that have the tracks.

[guscave]

Can I ask what you typically charge for RF track? And does anyone know why so many RF libraries only have a flat fee? Again what if something big buys your track, you should be able to charge more based on the usage.

The RF libraries I use sell the tracks at about $37, however I try to get no less than $42 per tracks. I try to stay away from RF libraries that don’t let you set your own price because a lot are set at very low values ($10- $15). It’s not worth my time to sell at these sites.

The $300 I’ve gotten (far and few between) has been with libraries that have sold multiple versions of my tracks, and whose pricing are set high.

[Mojo rising]

Like I said I’m new to royalty free but after a month in a couple libraries I’ve only had like 14 views and no sales. I did a lot research on tagging. But I’m charging 70, maybe that’s too high these days?

[Edouardo]

@Mojo, one month is not enough time to get an accurate idea. On some RFs, usually the good ones, it can be quite slow to pick up but it eventually does and can do very well with time. The first 6 months, i must have sold just a few licenses with a ridiculously small number of views. Now, after 2 years, it has slowly grown to become a significant fraction of my monthly revenue… It’s a game of patience.
And concerning the price: Under a certain price , the price doesn’t seem to have a strong impact on sales… I think 70 should be OK, yet close to the upper limit : I tend to hang out between 40 and 70.

[Mojorising]

Ok thanks for that! There has been a lot of discouraging stuff on here lately, but people have been bringing up good points about the state of the Industry. and even my best publisher, who always gets decent sync fee plus all the back end, said its getting harder and harder. Everyone undercutting each other and Racing to the bottom. I’m unfortunately starting to lose faith that licensing music can continue to be a lucrative investment of time. But I can say over the course of about 4 years doing it I make more money every year. It’s Just not nearly in to a substantial part of my income yet. But until now I have been primarily in the back end only driven model and I have recently signed several new deals to be in some of these other models like RF. I’m really trying not to lose faith in it. Not sure what needs to happen to protect composers from hitting rock bottom.

[Mark]

@mojorising
People have been predicting this “race to the bottom” for years now.
If it is a race then it is a very long and very slow one.
Probably the first post on MLR was someone predicting that all composers would be selling their music for $0.99 a track in no time.
That hasn’t happened. From what I can see the bottom is $34.95 or maybe $29.95. Granted that might not be great but that is the bottom and has been for 10 years.
I don’t think one composer’s personal experience after a month of selling in one RF library can be extrapolated into an industry-wide price crash and a call for protection of composer’s rights (especially when the composer has the right to price his music wherever he wants).

[Mojorising]

Good point Mark, I didn’t mean to contribute to the doom and gloom, I just have been reading a lot of it lately.

[MichaelL]

That hasn’t happened. From what I can see the bottom is $34.95 or maybe $29.95. Granted that might not be great but that is the bottom and has been for 10 years.

And how many CDBaby or iTunes sales does it take to reach $29.95 or $34.95? I’ll stick with libraries.

[ovation]

“From what I can see the bottom is $34.95 or maybe $29.95.”

You might want to keep looking. As I type., there are full length songs on P5 for $1. It is a race to the bottom and some are being overly optimistic. It’s a good time to up your game and move to higher ground.

[Kubed]

$1??!!I thought P5 set the limit for lowest price at $15 last year (for full tracks,not sfx).

[Author]

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