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Royalties



The term synchronization comes from the early days of the talkies when music was first synchronized with film. The terminology originated in US industry but has now spread worldwide.

Because it would be impractical to join music to film or images without making a “copy” of the music, it is clear that some sort of license is needed – but the legal argument is difficult to construct. In the UK and elsewhere, with the exception of the US,, there is apparently no legal prohibition to the combination of audio and visual images and no explicit statutory right for the collection of synch royalties. In the US, however, the Copyright Act defines the audiovisual format as that of combining images with music for use in machines but there is no explicit rate set such as the ‘compulsory royalty rate’ for copying music but there are instances of courts implying the synchronization right (http://www.clintons.co.uk/?news_id=38,fuller version at http://www.ca9.uscourts.gov/ca9/newopinions.nsf/6128717C16DB42D8882573C400597DC7/$file/0655102.pdf?openelement) but even so it is an amorphous colloquial commercial term of acceptance.

Synchronization royalties('synch licenses') are paid for the use of copyrighted music in (largely) audiovisual productions, such as in DVDs, movies, and advertisements. Music used in news tracks are also synch licenses. Synchronization can extend to live media performances, such as plays and live theatre. They become extremely important for new media - the usage of music in the form of mp3, wav, flac files and for usage in webcasts, embedded media in microchips (e.g. karaoke), etc but the legal conventions are yet to be drawn.

Synchronization royalties are due to the composer/song-writer or her publisher. They are strictly contractual in nature and vary greatly in amount depending on the subjective importance of the music, the mode of production and the media used. The royalty payable is that of mutual acceptance but is conditioned by industry practice.

It is useful to note in this connection the concept of the ‘needle drop’ (now laser drop) in that the synch royalty becomes payable every time the needle drops 'on the record player' in a public performance! All openings and closings, every cut to advertisements, every cut back from ads, all re-runs shown by every TV company, in every country in the world generates a 'synchro', although a single payment may be renegotiable in advance.

A sample of a UK synchro contract can be seen at http://i.current.com/pdf/music_sync_uk.pdf

It might be noted that there is a category of royalty-free music in the field of synchronization. This refers to the use of music in a ‘library’ for which a one-time royalty has been negotiated. It is an alternative to needle-drop negotiation.

In terms of numbers, royalties can range from, say. $500-2000 for a "festival-use license" to $250,000 or more for a movie film score. For low budget films, which are deemed less than $2 million, the royalties range from 3%-6% (http://www.musesmuse.com/pubart.html) or it could be per song per usage.

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References

  1. ^ Focus: Tax and Intellectual Property – April 2004. Allens Arthur Robinson. Retrieved on 2007-09-13.
  2. ^ royalty (definition). law.com. Retrieved on 2007-09-13..
  3. ^ Manual on Technology Transfer Negotiation (A reference for policy-makers and practitioners on Technology Transfer), United Nations Industrial Development Organization, Vienna, 1990, ISBN 92-1-106302-7
  4. ^ Guidelines for Evaluation of Transfer of Technology Agreements, United Nations, New York, 1979
  5. ^ Licensing Guide for Developing Countries, World Intellectual Property Organization (WIPO), Geneva, 1977, ISBN 92-805-0395-2
  6. ^ UNIDO International Workshop on Technology Transfer Negotiation and Plant Level Technology Needs Assessment, 7-8 December 1999, New Delhi.
  7. ^ Dave Tyrrell. Intellectual Property & Licensing. Vertex. Retrieved on 2007-09-14.
  8. ^ royalty interest (definition). Schlumberger. Retrieved on 2007-09-13.
  9. ^ Four little words. Retrieved on 2007-03-15.
  10. ^ Don Henley Speaks on Behalf of Recording Artists. Retrieved on 2007-03-15.
  11. ^ Use Of The 25 Per Cent Rule In Valuing IP. Retrieved on 2007-09-20.
  12. ^ Valuing Your Intellectual Property for Strategic Alliances and Financing. Retrieved on 2007-09-20.
  13. ^ Sample: License Parameters. Retrieved on 2007-09-26.
  14. ^ Treasury Evaluations. Retrieved on 2007-09-27.
  15. ^ Ranges of royalty rates, and royalty guidelines, U.S. Pharmaceutical Industry. Retrieved on 2007-07-19.
  16. ^ The Royalty Rate Journal of Intellectual Property, December 2002, p. 8.
  17. ^ Sample: License Parameters. Retrieved on 2007-10-26.
  18. ^ DHL Corporation and Subsidiaries vs. Commissioner of Internal Revenue, Docket Nos. 19570-95, 26103-95, United States Tax Court.. Retrieved on 2007-09-09.
  19. ^ Compulsory Rates for Mechanical royalties. Retrieved on 2007-10-15.
  20. ^ 'Reduced Rate' Royalties. Retrieved on 2007-10-29.
  21. ^ Royalties on Controlled Composition. Retrieved on 2007-10-29.
  22. ^ Language of the Music Business. Retrieved on 2007-10-29.
  23. ^ Songwriters challenge UK online royalty rate. Retrieved on 2007-12-18.
  24. ^ Sale of Music Long in Decline. Retrieved on 2007-12-20.
  25. ^ What is Digital Distribution. Retrieved on 2007-12-20.
  26. ^ U.S. H1 Album Sales Down 15.1%. Retrieved on 2007-12-22.
  27. ^ American Federation of Musicians. Retrieved on 2008-02-24.
  28. ^ American Federation of Television and Radio Artists. Retrieved on 2008-02-24.
  29. ^ The Sound Exchange. Retrieved on 2008-02-29.
  30. ^ SECTION 114 (f)2 and 112(e). Retrieved on 2007-12-19.
  31. ^ Interim Settlement of Digital Royalty Rates (Music), United Kingdom. Retrieved on 2007-12-19.
  32. ^ Artists bid for CD parity on digital royalties. Retrieved on 2008-02-24.



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