The steps in correctly licensing music and the inevitable price tag can be intimidating, but there are ways to save thousands of dollars on this process while getting the right song for your campaign.
Do a rerecord. If you need or want a particular song but don’t have the budget for the celebrity version, opt for a song rerecord with an unknown artist. So long as the publishing rights are secured (the written words to the song – the composition), a rerecord can be just as effective getting the necessary recognition and emotional response from the target audience. However, be sure to be careful about any clause in the sync agreement that might mention no use of soundalikes. This over site could result in expensive litigation.
In 1990, Tracy-Locke, an advertising agency, used a rerecord of artist Tom Wait’s “Step Right Up” altered significantly to avoid paying for rights in a Frito Lay commercial. Waits sued for four million dollars, winning two and a half million for his voice theft. This lawsuit didn’t stop other agencies from trying the same. Waits later went on to win cases against Levi in 1993, Audi in 2006, and Adam Opel Ag in 2007. So make sure to acquire the publishing rights and find a non-sound-alike artist to rerecord.
Ask who owns the master. Getting a typical song licensed means paying publishers who represent the composers/writers and the record label who owns the master recording of the song itself. A Most Favored Nations (MFN) clause will likely be in place between both rights owners. An MFN is a contract clause that states whatever party quotes the highest price the other party follows suite as neither license can have more favorable terms. For example, if the label quotes the master rights at $100,000 firm and the publisher quotes $75,000 MFN, the publishers quote will then bump up to $100,000 to follow suite due to the MFN language.
If the artist has a version they own (outside of any ownership by a label), they could waive the MFN fees and you avoid paying the label all together.
Incentivize the artist to rerecord. If the artist doesn’t own a version of the master, it is a good idea to provide some sort of incentive to record their own version to avoid MFN costs with the label. For example, if getting the rights for the original recording of a song costs $400,000 all-in, half ($200,000) goes to the publishing rights, and half ($200,000) goes to the master rights. Offering the artist an extra $100,000 to rerecord the song would mean saving $100,000 for your client/brand should the artist agree as you now will be paying $200,000 for publishing and $100,000 for the rerecord.
Reach out to the artist in question. If the artist is going to appear on camera in a television commercial along with one of their songs, they usually will be open to waiving their publishing fees if they have ownership. If they are not the sole publisher (if their band mates helped write some of the song, etc.) ask the musician to contact them. More often than not, you can acquire the remaining publishing rights at below market cost, due to the help and leverage of the on camera artist.