Tag: Licensing

Music Licensing – What, How and Why It’s Important for Your Business

Music licensing commonly refers to ‘royalty free music’ or ‘production music’. This is music that has been written and produced with the sole purpose of being used in another project. Anyone can then license this music for a fee, to use in their project.

What about commercial music?

Commercial music, written and performed by artists like Adele, M83 and U2 for example, cannot be used for any purpose other than personal/private performance. When you buy a CD or download an MP3, it is specifically stated that you cannot do anything with that song or music track except listen to it yourself. Any business use is prohibited, even playing it on the radio to customers at a hair salon.

To play commercial music to the public, a public performance licensed is required by the appropriate performing rights organisation of that country. In the UK it may be PRS or PPL. In the US/Canada, it may be BMI or ASCAP. These organisations arrange a fee to the proprietor of the business, based on the size of their business/location. This can be expensive, and time consuming just to play the radio to your customers on your premises, but does permit the business to play the radio to its customers without legal issues.

This is not a suitable solution for video production and filmmaking, as the usage and purpose of music is not the same. As many video production companies produce content for clients, they need background music for their video/film that is cleared for its intended purpose. When licensing commercial music, arranging such a license for online, public performance, in-store and mass distribution quickly becomes expensive and convoluted.

Royalty free music licensing offers a simple and cost effective solution to acquiring well produced music with all necessary rights for the client, within an affordable, transparent license.

Who needs to license music?

Anyone creating digital content with the intention of publishing it online or publicly. It’s really that simple. You cannot legally use music you have not written yourself, or licensed from a music library.

What about ‘home movies’ and ‘personal projects’?

The same rules apply to home movies and personal projects, but because these are produced not-for-profit, nor professionally on behalf of a client it is possible to use commercial music in this type of content. However, when this content is published to social platforms like Facebook and YouTube, you may find your video is blocked in certain countries, or deleted entirely. This is because commercial artists and record labels have an agreement in place that monitors use of their content on these platforms, and can enforce accordingly. There is however, many commercial artists and record labels who permit the use of their music in exchange for advertising. An ad will be attached to your content as a pre-roll, overlay or half-time break during the video in exchange for permission to use their music track. If you’re producing something personal, ‘for fun’ then this shouldn’t be an issue.

The risks of using commercial music in professional video

A client may want the latest chart hit in their video because it resonates with their target audience, or they feel it represents their brand. However, as outlined previously this could end up immediately being blocked or deleted with further implications like account suspension. If the video is not blocked or deleted, then it will be served with ads.

This is the last thing you want for your client. You’ve produced a video promoting their new product, and before the video has even started, viewers are being shown ads for competing brands and products. It degrades the potential of the video and the brand.

Why license ROYALTY FREE MUSIC?

There are THREE key reasons why licensing music correctly is hugely important.

1. You’re using music that will NOT be subject to copyright claims, blocks or deletion when it is published online. This means you can deliver your end-product to your client without fear of any music related issues.

2. You can MONETISE the content you produce. If you’re producing the content for your own online channel on YouTube, you’ll no doubt be entered into the partner program, to earn money from ads displayed on your videos. You cannot earn money from these ads if the music is not licensed, as it will go straight to the artist/producer of the music. Pay for the music license, earn money from that music license. Simple.

3. Create an identity for your video. Whether you’re producing something on behalf of a client, or yourself. If you use a hugely popular, well known commercial music track, chances are that song will resonate with the viewer more than your content. However, if you create really good video content AND license the perfect music track nobody has heard before, you’re offering a completely unique audio/visual package that is new and fresh.

What about free music?

If you look for it, you will find music that is available to use for free. But ask yourself, why is it free?

Free in exchange for ads and revenue.

The creator could be giving you permission to use their music in exchange for ad-revenue online via YouTube and Facebook, and you won’t know this until you publish it and get informed ads will be displayed alongside your video, with all revenue going to the artist.

A poor quality sample

The free music track you’re using could be a low quality sample of something an artist is trying to sell. This could be a low 128kbs MP3 that appears suitable, but when played back against high quality content, will sound quiet, muted and generally not as good. When music is licensed from a library, it should be available in broadcast quality WAV or 320kbps MP3 as standard.

Who else is using it?

You won’t be the only one looking for free music. People creating content purely for personal projects don’t have a budget for music licensing so they need something free. If you’re producing a project for a client who is paying you, would they be happy with you using the same free music track as everyone else? If it’s free, chances are a lot of people will make use of it.

Clearance and Assurance

Anyone can upload a music track online. There is no vetting, no quality control or legal assurance. Any Blog or digital content platform can host a music track for others to share. So, when you’re downloading a ‘free music track’ how do you know the provider actually has the rights to provide it to you? When you license a music track from a professional curated library, you have the assurance that every single music track has been reviewed, contracted and published legally for you to license and use.

Why pay for music?

There are thousands of music tracks online. What difference is there between ‘Track A’ and ‘Track B’? As a video producer/filmmaker, ask yourself this question: “There are thousands of video cameras available. iPhones can shoot 4K video and you can plug a microphone into them. Why should a company hire me to shoot their video”?

When you license music from a reputable library, you’re paying for the expertise in writing and composing the music track. From the start, middle and end. The quality of instruments used. The production of dynamic audio, the builds and crescendos. The post production mastering and edits so that a 3 minute piece can be condensed into a short 30 second edit without losing any of the magic of the music track.

The difference you get when someone films a corporate video on their iPhone compared to someone filming the same video with a professional camera, lighting and staging is painfully obvious. It is no different when it comes to music or photography. There is the technology, the knowledge the skill and ability to combine them to achieve the highest quality result.

What can I do with licensed music?

Whatever you want. Music can be licensed for limited use or global distribution, mass production and broadcast. You can license music for a specific purpose and tailor it to accommodate any additional requirements at any time.

Licensing royalty free music is intended to be the most cost-effective and practical solution for using music in your professional projects. General online distribution is commonly a one-time license fee per track for lifetime usage.

IP Licensing or Manufacturing – What’s Best to Get Your Invention in the Market

So, you have a patented invention, but don’t have any idea what to do next? And what are the different money-making options available for you? This article will provide you detailed information about how to bring an invention into the market – manufacturing on your own and IP licensing.

The first step is to study your invention comprehensively, and familiarize yourself with the industries it can have applications in. Do market research!

Google can help you a lot in this. Search for the top companies and emerging players that are active in the target markets of your invention, and study all their existing products/services. Sources and references may include online business journals, magazines, and blogs. Also, try to know the technologies that are trending and going to hit your target markets in the future. This is because, maybe you find a product infringing your technology, and you can file an IP infringement case against the manufacturer. Maybe your technology can be used for improving the functionality of an existing product, thus creating IP licensing opportunities for you.

You need to think from the customers’ point of view if you want to succeed. Read customers’ feedbacks on social media, e-commerce sites, companies’ official sites, and online blogs. Analyze the problems customers are facing with the current products and help them in finding solutions. By doing so, you can create your personal brand, and establish your own fan following. Here, you can also tell customers about your future product launches and business plans.

Let’s take an example. A company is selling an electronic device, which has an early heat-up problem. Fortunately, you developed a special chip, which can solve this problem. What you need to do is to search for the online reviews that customers have posted regarding the problem and tell them that you have invented a solution for this. You can build trust among a group of customers, thus, it will become easy for you to market your products.

If you do market research comprehensively, you win half of the game. The next step is studying market analysis reports and an exclusive building IP monetization strategy for your invention. There can be two options:

IP licensing:

Patent licensing is same as renting a house to a tenant; you retain the ownership of your IP rights and at the same time allow someone to use them to manufacture and sell products for a given period. The licensing agreement can be held between individual inventors or companies; the IP holder is called licensor, and the party that gets the right to use, sell, manufacture from the patented technologies is called licensee.

As an IP holder, you have the right set terms and conditions in the licensing agreement. The terms may include a fixed amount of the future sales or a part of the royalty per unit.

However, it is hard to tell what is the total amount you can earn as an inventor by licensing your patent to others. It depends on patent valuation, which is influenced by several factors. These include:

  • Total market size and the growth rate
  • Number of customers that fall in the patent life
  • Number of customers that make purchases
  • Product development costs and taxes
  • Annual profit to the manufacturer

There are two options in IP licensing – exclusive and non-exclusive. In exclusive licensing, only one licensee got exclusive rights to develop and market an invention (usually, exclusive license agreement are done with start-ups, helping them grow in the competition). On the other hand, non-exclusive licensing allows multiple licensees to practice the patented technologies at the same time, thus utilizing the IP to its full potential.

Manufacturing on your own

Usually, the royalties that inventor gets by IP licensing range from 2% to 10% of the total revenues. If you think “why should I get a small slice from the pie when I deserves the whole part“, you should go for manufacturing and selling products on your own.

According to a study by Ed Zimmer and Ron Westrum, more than half of the inventors who decided to manufacture and market on their own claimed to be successful.

To be a successful businessperson, you need to be familiar with the business world. Additionally, you must possess these personality characteristics:

  • Salesperson: All entrepreneurs have one common aim i.e. to sell their products to maximum number of people. Thus, you should have qualities of a salesperson, telling people about your products and convincing them to enter in the list of your paying customers as well.
  • Risk taker: Sometimes, you have to come out of the crease to hit six on the last ball to win the game. Although, there is a chance of run-out, but you don’t have other option. Similarly, to grow as a successful businessperson, you must be willing to take risks. You may face bankruptcy or down credits but at the same time have fair chances to come back for another game.
  • Innovator: Innovation is one of the key tools of business growth, and you should be expert in that. Providing people with something new and upgrading products and services with the latest technologies help attracting new customers and retaining the existing ones.
  • Manager: You should possess managerial skills and know how to handle a team. You need to understand the fact that employees are core elements of a business; and they can help you increase sales only if they are focused and inspired.

Conclusion:

Patent licensing and manufacturing are the two options to bring an invention in the market. But, it is difficult to tell which one is better. Both have their own benefits and drawbacks, and it is up to you to choose based on your personal preferences.

Thus, your goal should be very clear. Whether you want to set-up your own business or get royalties by allowing someone use your IP rights.

However, returns on investment is more if you go for manufacturing, but you need thousands of dollars to set up a company. If you don’t have enough financial resources, IP licensing is the right way for you to go.

Manufacturing or licensing, what do you think is best option for IP commercialization?

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