Settle back and get comfortable - you are about to experience AMP’s Best Practices area. Here we present our best advice for how to produce music and sound for advertising.

INDEX

 AMP MUSIC BUSINESS GUIDELINES & GLOSSARY

(Advertising Specific - Edited September 2021) 


Music and sound share the importance and impact of the visual image in every broadcast communication. The Association of Music Producers (“AMP”) has recognized the need for substantive information to aid in the creation and production process. Developed from a broad survey of music companies and agency producers, composers and legal counsel, this Glossary & Guidelines is intended to describe the major components of any music production. It is hoped that it will provide a useful reference to help both music companies and industry professionals in creating the highest quality music and sound design in a cost-effective way, with a clearer understanding of the responsibilities of all parties.

This Glossary & Guidelines is intended to be an informational, resource tool to be used as each music company determines in its independent business judgment. Where the information is available to it, AMP, based on its experience as a leading commercial music industry trade association, has tried to reflect actual industry custom and usage. However, this document does not represent any agreement or recommendation by AMP to adopt any particular terms or conditions, all of which are subject to individual company negotiations. All fees and payment terms, their amount and appropriateness, matters for such negotiations and quantitative references herein, among other items, are for purposes of illustration only. Consultation with an attorney experienced in contract, intellectual property and commercial matters is recommended prior to entering into any contractual relationship.

KEY TERMS:

“Work” = any piece of music (a song, track composition, recording) 

“Advertiser” = the Brand/Client

“Supplier” = the Music Company, Composer, or other party providing music services or rights. Supplier is often considered to be acting “on behalf of” the Composer

“Purchaser” = the Agency, or other party receiving music services or rights. Agency is considered to be acting “on behalf of” the Advertiser

“Licensor” = the Music Company, Composer, or other party granting licensing (usage) rights only, as opposed to ownership rights

“Licensee” = the Agency, or other party receiving licensing (usage) rights only, as opposed to ownership rights

“Deliverables”  = The final assets and products that a Supplier/Licensor delivers to a Purchaser/Licensee to complete a Project. 

MUSIC PRODUCTION PROCESS & SCHEDULE

It is a good idea to begin planning and creating early – ideally not later than the pre- production stage. It is suggested that Agency producers create a schedule with input from the Supplier. If an Agency music producer, a Music Company producer or a Composer is available to attend the pre-production meeting, this can help establish direction from the beginning, and avoid “scrambling for ideas” at the post-production stage, when deadlines need to be met and budgets have already been allocated. The music production schedule should be part of the overall production calendar, and should allocate time for:

• Music development/research (creative calls, providing of materials)

• Budget & terms negotiation

• The creation, production, review & approval of music demos

• Revisions for picture edit changes and/or any additional revising, sweetening,instrumental and vocal recording

• Musicology. Note that in the interest of both budget and timing, this step should generally be performed after a singular demo has been selected for finalization, but still with enough time to allow for any changes the Musicologist may request (and subsequent approvals).

• Preparation for “final” session (pre-pro, booking studio & talent, orchestration, music copying, etc.)

• Final record & mix, elements to picture mix (note that final mix to picture is often NOT provided by the music Supplier)

SPEC SHEET

AMP has also created a Spec Sheet which clearly outlines a project, and what elements/timelines and costs have been agreed upon. This Spec Sheet is available in the “Members Only” section at the AMP website, http://www.ampnow.com. You must be a current member of AMP to access this and other proprietary materials. All music companies are encouraged to complete the Spec Sheet, and send to the Agency music producer and/or Agency producer at the start of each job. In addition to all pertinent information, the sheet also includes links to Union wage scales. The Spec Sheet will help organize most of the following music production/cost considerations.

ESTIMATES

The Estimate is a document prepared by the Supplier, describing the total cost of a project and specifying the terms of the project. An Estimate should include as much information as possible about the project and should be signed by the Purchaser prior work beginning, once the terms have been agreed upon. In place of, or in addition to a signed Estimate, a Purchase Order may be provided to the Supplier by the Purchaser. Typical components of an Estimate are:

Demo Fee/Exploratory Fee: A fee charged by the Supplier for delivering a range of versions (“demos,” “treatments”, “roughs”) for possible use. It is common practice to demo music ideas prior to finalizing a Work. The Demo Fee covers actual production costs for creating the demos (studio, composer and engineers’ fee including any necessary revisions, materials, singer & musician fees). Note that the Demo Fee usually covers a limited number of revisions but usually not new demos.

No rights are transferred under a Demo Fee, and the Demos remain the property of the Supplier until a final fee is agreed upon and a Music Rights Agreement or Music License Agreement is executed. Note that during the demo process, Suppliers may provide musical or lyric ideas which may substantially impact the tonality or character of the project moving forward. The use of such creative contributions when the job is not awarded to Supplier is a potential misappropriation of the intellectual property of that company, for which compensation may be required. This is a consideration when moving forward from the demo stage to avoid misunderstanding and legal risk.

Holding Fee/Test Fee: The Demo Fee also does not constitute a “Holding Fee,” or “Test Fee,” which are uses of a selected composition for which fair compensation should be agreed upon in advance, as well as a reasonable duration for the “hold.” Off-air tests should be more than a standard Demo Fee, and on air tests can be anywhere from half to the entire amount of a final, depending on how long and where it is going to be tested. Note: These costs can also be anticipated and budgeted for on the Spec Sheet (above).

Creative Fee (aka Broadcast or Air Rights Fee): Fee for the creation of a unique Work and the purchase thereof under specified usage terms.

Arranging Fee: Fee for the unique arrangement of a composition as scored to video or script.

Sound Design Fee: In addition to the above as applicable. 

Production Fee: The production fee essentially encompasses all other services a Purchaser pays a Supplier for: coordination of the job, development of schedules and deadlines, negotiations with talent, streamlined communication, and legal and financial management. These services are not hidden within other line items. The Production fee also includes all other “hard” costs including sessions, studio time, record/edit/mix, dubbing engineer, studio engineer, digital media access & retrieval, pre-production, instrument rentals, web posting, materials, messengers, sales tax as applicable.

Talent Payments: Projected session costs for musicians & singers, either as a Buyout or via Union contracts. If Union, this may include instrument cartage, music copyist, scale arranging & orchestration, and health & welfare contributions.

Note: in the case of Union payments, Supplier typically only provides estimated costs for the Work “as delivered”. Purchaser/Agency budget may require payroll handling and talent tax, and may include calculation of domestic and/or foreign residual payments, or any “new use” payments for lifts into future media. See Unions & Talent for more information.

Musicologist Fee: Contingency for professional music/sound analysis as needed.

E & O (Errors and Omissions) Insurance:  Insurance required by many Purchasers against claims of accidental infringement of existing Musical Works.  Insurance Policy must be held by the Music Company/Producer, and sometimes the Composer.  Also known as Professional Media Liability Insurance.

Cancellation/Kill Fee Contingency: This fee applies if a project is cancelled mid- way through, and applies to work already completed, hours logged or sessions already booked. This fee is an agreed-upon percentage of the full project budget (generally 50%). The fee should be negotiated in writing prior to the start of the project and specified in the Estimate.

PAYMENT GUIDELINES

Upon awarding of the job (i.e., confirming one Supplier to provide music for a project), it is common for the Supplier and Purchaser/Agency to agree to a first payment equal to 50% of the entire project budget in anticipation of initial upfront production costs and fees. Additional 25% may be invoiced if the period of time between awarding and completion is significant, as the parties determine. Upon completion of the final project, the remaining 50% (or 25% as the case may be) will be invoiced. The foregoing percentages and payment benchmarks are illustrative only and are not recommendations by AMP of any particular payment terms or percentages. Individual companies must negotiate their own payment, price and other terms with the Purchaser/Agency. AMP understands that the general industry custom is for full payment to be made prior to the first air date of the finished spot, but not later than 30 days following the submission of final invoices.

PROCESS DETAILS

Musical Direction & Reference Music

Parties on behalf of the Purchaser (Agency creatives and producers) will often refer to an existing Work in popular culture - an artist’s single, a film soundtrack, or a new album.

There is inherent risk in this practice. Caution must be exercised in the use of existing music as “direction” for Suppliers. Copyright extends not only to the literal notes of music compositions, but possibly to the style of the musical arrangement, harmony and the lyrics, where such style, harmony and/or lyrics is or are substantially similar to the original. There may also be false endorsement and/or publicity rights issues implicated if a style is deemed confusingly similar to or a soundalike of a well-known performer. There can be great risk - to the Advertiser, the Purchaser, and to the Supplier and Composer - in making something “sound like” someone else’s song or soundtrack.

Also note that the use of musical recordings and/or musical compositions without permission - even for presentation or “testing” purposes - could be viewed as infringement of copyright. To prevent unnecessary legal exposure, and to encourage the respectful environment necessary for creative collaboration, the Association of Music Producers recommends that discussions of direction be limited to musical styles or genres, that music professionals be included in the discussions, and that rights- protected (library or artist) tracks be clearly defined as such when included in the presentation process, unless licensing of the composition is intended.

Getting input from Suppliers at a preliminary stage is one way to expand initial thinking, open the door to new ideas/directions, and source music that would ultimately be usable for a project. If it can be avoided, it is not advised to use other copyrighted material as a “model” for patterning creative content. Because editors frequently prefer cutting video to an existing piece of music - having the rhythm and tempo as a “guide” - providing the editor with music that would eventually be licensable/purchasable can both meet their needs and mitigate the risks described above.

Temp Track (also Guide Track) - A piece (or selections) of Music that have been placed against a video during the video-editing process.

Reference Track(s) - Existing Music that exemplifies, in one or more ways, characteristics that the Purchaser finds desirable or demonstrative.  

Direction - A description of agreed-upon aspects and criteria for a Music Search or Original Composition.  May include Reference Tracks.

Concept(s) - Another term for Direction or Reference Tracks.  

Picture  - Frequently used term for Video.

Composer Agreement  -  A legal contract specifying terms, expectations, representations, and indemnifications between A Music Company/Supplier and an Individual Composer. Generally, this is a blanket document for Original Compositions.  Project-specific details are often amended as Schedules to the Agreement.  If the Composer is not employed exclusively by the Supplier, the contract may be known as an Independent Composer Agreement (or “ICA”).  

Musicology / Musicologist - A Musicologist has extensive training in music theory, music history, and the body of musical Works throughout history. They are employed in the course of a project to determine the possible similarity of one Work to another (or to any other known Works). It is recommended that a Musicologist be employed on all projects once a final track is selected.

NDA / Non-Disclosure Agreement  -  A legal contract, which outlines that named parties agree to share confidential information for purposes of communication, but specify that the information is otherwise restricted.  NDAs can encompass a production team, an entire company, or individuals, and can specify legal liability damages for violating the terms.    

All-In  - The total cost to a Purchaser or Licensee for a Work or Project, including any and all talent payments.

Stems, Splits, Stripes - All terms that basically mean “…groups of tracks that, when added together, will equal the Full Mix of the Music”.  Usually it means that elements of the music are summed together into a Stem/Split/Stripe, for example - All Drums, All Guitars, etc.   The specific term varies by person, company, role, segment of Industry, and geographical location.   It’s always wise to have a discussion regarding what the expectation is for stems/splits/stripes when you are asked to provide them.   Stems is the most current across-media term, but there are differences when someone expects stems that add together to exactly equal the fully-mastered music mix, and when they expect stems that are not run through your “mix-bus processing” and therefore do not sound exactly 1:1 (the same) as your mastered music mix when added together.    The term Stems is often used for final-delivery elements.  Splits is often used in film music for the pre-recorded tracks playing in the background during a live recording session.  Stripes is less common than it was in decades past.   You may also hear the terms “submixes” or “multitracks” requested as deliverables.  Best practice is to ask for clarification and specs.  

USAGE & RIGHTS

Term - The length of time for which a Work may be used, as specified in a Music License Agreement.

Territory - The geographical location within which a Work may be used.

Media -The format/type of distribution method (e.g. Online vs. Broadcast) in which a Work may be used.

License / Music License Agreement (MLA) - A License grants permission to use a Work in conjunction with a specific production, for a specific Medium/Media, for a specific Term. No ownership is transferred. The Licensor (Supplier) retains copyright to the Work and permits the Licensee (usually Agency) to use the Work across agreed-upon media and for an agreed-upon duration (including Perpetuity, if applicable). When this term has ended, the license must be renewed. Unless a “Blanket” license is in place, the Work can only be used on a specific commercial or collection of commercials as defined in the terms. A Music License Agreement may be for an Exclusive License of the work during a term, or a Non- Exclusive License of the Work during a term.

Licenses from Music Searches  - If a Work is Licensed from a Music/Library Search where the Producer is not the original Creator and does not own the Rights to the Work, the Producer should make sure that all Terms and Fees are understood and agreed upon by the Rights-Holder. 

Exclusive License - The right to use a Work for a specific Term & Territory without any other entity using it at the same time.

Non-Exclusive License - The right to use a Work for a specific Term & Territory, allowing  that other entities (Licensees) may also use it at the same time.  

Category Exclusivity - The right to use a Work for a specific Term & Territory, other Licensees may use the Work at the same time but not within the same market category / sector. For example, if a Licensee was using a Work for an automobile company, a second Licensee would be able to use the Work at the same time for a clothing brand but not for another automobile company.

Direct License  - Bypasses Performance Royalty Organizations and Mechanical Royalty Collectors to issue a full-coverage Music-Use License for an upfront fee.  Direct-Licensed music is very popular among Internet live streamers on Twitch, YouTube, etc. who want to be able to play music under their video streams, and also archive those streams for on-demand playback, without having their video de-monetized (revenue claimed by the Rights-Holders of the Music) or taken down (for using Copyrighted Music without having acquired the appropriate license).  Effectively, Direct-Licensed music is Royalty-Free Music.  

Work for Hire / Music Rights Agreement (MRA) - In a Work-for-Hire transaction, no rights in the Work are retained by the Supplier, except for the Writer’s (and possibly Publisher’s) Shares of Public Performance Rights. A Work-for-Hire is finalized via a Music Rights Agreement, which is a widely-used, variously-worded contract providing that ownership of copyright in a Work vests not in the Supplier but in the Purchaser (generally an Agency acting on behalf of itself and its client, the Advertiser). The Purchaser may secure copyright registration to the Work, arrange/adapt or re-record the Work, and use the Work as they see fit across all media and in perpetuity. Additionally, since the Purchaser now becomes the copyright holder of the Work, they may also be considered the Publisher of the work and can collect the “Publisher’s Share” of Performance Royalties monies. As mentioned above, the Supplier generally retains only the “Writer’s Share” of the Public Performance Rights earned during broadcast of the Work, but sometimes they can retain the Publisher’s Share, if it is specified in the Agreement.

Buyout  - “Buyout” is a term used to mean several different things by different people.  The underlying theme is that the Purchaser/Client wants to “pay once” to own the Work, and not be on the hook for future payments.    Here are some of the most common definitions that we have encountered, but always be sure when a Client or Supplier uses this term to ask what they mean. 

  • An alternate word for “Work for Hire” indicating that copyright to a Work vests in the purchaser as opposed to the Work being Licensed for a Term. This word should not be used when there is no transfer of rights.

  • Talent Buyout (See below) - no Union or Residual payments will be due to Musicians or Singers.

  • The Work will not be registered with PROs, and the Purchaser/Client claims ownership of what would be considered PRO rights.   (See “Direct License”)

Talent Buyout - A means of paying for the talent performances included in a Work. This is separate from the transferring of copyright in and to a Work and must be specified. For example, a project can be considered a “buyout” in that the copyright has been transferred, but the talent contained in the Work may still need to be paid residuals on a Union contract if it is a Union project. Alternatively, the talent may be considered “bought out”, in addition to the copyright, if it is a Non-Union project and has been negotiated as such.

Public Performance Rights (PPR) and Performing Rights Organizations (PRO) - Public Performance Rights are a component of copyright law that legally require that both the Writer and the Publisher of a Work be compensated for any public performance of the Work. Since it would be impossible to contact and compensate the Writer and Publishers individually for every performance of a Work, the entities physically performing/playing back the Work (including broadcasters, streaming services, networks, music venues, restaurants or bars) execute agreements with three governing bodies known as Performing Rights Organizations (PROs) —ASCAP, BMI and SESAC, in the USA. These agreements are blanket licenses (Public Performance Licenses or PPLs) allowing the entities to perform/play back all works in each PRO’s repertory. Each Work is generally registered individually with one of the PROs, either by the Supplier or the Purchaser. The PROs are then responsible for tracking uses of the work and compensating the rights holders based on usages (aka paying the rights holders their Performance Royalties). For this reason, it is important that the Works, and the productions/commercials in which they are used, are titled consistently and accurately to ensure proper tracking.

Royalties  - A royalty is a legally binding payment made to an individual or company for the ongoing use of their creations or assets, including copyrighted works, franchises.  For our purposes, we use two different terms for the most common royalties in our industry:  “Royalties” for Public Performance Royalties collected by Performing Rights Organizations - PROs, and “Residuals” for usage payments paid by the Client/Purchaser to Union Musicians and Singers on Works that were created using Union Agreements.  

Performance Royalties - Monies due to a Writer (aka Composer) and Publisher for public performances of their Work as outlined above. These monies are paid by the entities performing/playing back the Work, to PROs via a Blanket License, and are never the responsibility of the Agency and/or the Advertiser. They are also separate from and unrelated to Union (SAG/AFM) residuals.

As mentioned above, the Composer is legally (in almost all cases) entitled to their Writer’s royalties, regardless of whether the music was purchased outright by the Purchaser as a Work for Hire or was Licensed. If the music was Licensed, the Supplier is able to also collect the Publisher’s royalties – whereas in the case of a Work for Hire, the Publisher’s royalties would be usually be owned and collected by the Purchaser (Agency) or Agency’s own publishing company, or assigned to their Client/Advertiser.

Royalty-Free  - This is a regularly confused and mis-used term.   Simply put, “royalty-free” music is a license where users pay only one time and acquire lifetime legal usage of the Work.   Historically, music marketed this way was used in TV and radio productions and promotions, where the broadcasters already had a blanket license with PROs, and performance royalties could be collected, but the producers didn’t want to negotiate separate sync deals for every piece of music they wanted to use.  However, the term is not well-defined, and  has also been used and understood by different people to mean:  “Buyout”, “Talent Buyout”, “Copyright-Free”, “Direct License” and “No Sync Fee” (if included in a library that is paid by subscription for access to, and use of, all contents).    AMP recommends always asking questions if this term comes up during a job or from a Client, to understand what their actual intent or need is. 

RIGHTS & INDEMNIFICATION (INDEMNITY)   

Every MRA contains a variation on the “Indemnification Clause.” Historically, this clause has placed full responsibility for the originality of the acquired work with the Supplier and Composer, and has usually required that they, jointly or individually, “hold harmless” the Purchaser from “any and all claims, judgments, legal costs,” etc. arising from any and all actions and/or claims made against said musical work.

In the current litigious climate, a “claim” may be made against a Work - even frivolously - with the knowledge that the Purchaser may choose to “settle” in order to avoid the involvement or embarrassment of the Advertiser, its Client.

Under certain circumstances (such as when a specific track from the outside has been referenced as outlined above under Process Details) the Association also recommends that, prior to broadcast, (a) the services of a Musicologist be employed to determine the likelihood of legal risk, and (b) the indemnification clause not be executed until such time as all parties to the Agreement agree that risk is unlikely. Allocation of risk among Purchaser, Advertiser and Supplier is advisable.

In addition, when a Purchaser requests stripes, splits, or stems (separate tracks of the music) for the final mix, the Supplier should no longer indemnify the Purchaser or Client. Splits or stems can change the nature of the music, often without the composer present, and therefore create too much of an indemnity risk. If splits or stems are used, AMP suggests sending the final mix to a Musicologist once again.

MUSIC SUPERVISION

Music Supervisor / Supervision - An entity, person, or service employed in the process of securing the Rights for existing musical Works for a Project. Generally, a Music Supervisor may be responsible for both creative suggestions of appropriate Works for a Project and also the negotiations with publishers, labels, artists/composers/songwriters and other Rights-Holders for the use of those Works.

Sync  - The process of placing, or “synchronizing” a Musical Work with a piece of visual media. 

Sync License (Sync Rights)  - The specific type of license that must be in place to use a Work in any visual media. 

Master & Publishing Rights - The two “components” of a recorded piece of music. The Work “as recorded” (the version you hear) is referred to as the Master. The Work “as written” (the version originally written down as notes on a page) is technically the Composition or the Song, but usually referred to under the umbrella of the “Publishing side”. These two components are separate, so it would be possible to license the Publishing of an existing song and record a new version on your own. The two are often controlled and represented by entirely different parties – for example, if you wanted to use “Jump” by Van Halen in a commercial, you would need to contact both Warner Chappell and Atlas Music, who control the Publishing side on behalf of the writers, and Warner Brothers Records, who controls the Master on behalf of the artists who performed.  But you could use a cover version of “Jump”, only needing the Rights from the “Publishing” side.  Please note that in this situation, the term “Publishing” refers to BOTH the Writer’s and Publisher’s Shares of the Public Performance Rights.

Most Favored Nation - In the context of music licensing, the negotiated process for equalizing the fee charged by the Master & Publishing entities respectively. For example, if Warner Chappell and Atlas (above) wanted to charge $450,000 for licensing the Publishing, and Warner Brothers Records separately wanted to charge $250,000 for licensing the Master, both parties would automatically be awarded the higher quote - $450,000 “per side” or $900,000 “all-in”.

 Fees above are for example only.

MUSIC LIBRARIES AND SEARCHES

Music Library - A collection of Music Works that has been previously created, and is available for Sync (either via License or Buyout).

Music Search - A Search for Music Works available to Sync requested by a client.  This term can include only a Library Search, or a Search of all recorded music, for purposes of use on a project, or as a Direction or Temp Track.   

Library Search - A Search of available Music Works from a Producer or Publisher’s existing Works Library. 

Library Pull - Similar to a Library Search, but commonly used by Music Houses and Publishers to refer to a Search by a Composer of their available Works. 

Production Music  - Music Works that have been written expressly for the purpose of Sync, but not to a specific Project.  Often following specific structural criteria and managed and marketed by a Publisher or Music Library. 

Stock Music - A description of a Music Library and its Works.  This used to be a common term for Production Music Libraries, but in recent decades the term has taken unfavorable tone, inferring that the Library’s Works are generic and low-quality.  

Original / Custom / Bespoke Music - A Musical Work that has been Composed and Produced specifically for a Commissioned Project, and is then available for License or Buyout to that Project. 

UNIONS & TALENT

Musicians Union (AFM, aka American Federation of Musicians) - The labor organization responsible for ensuring fair pay and working conditions for Musicians, setting rates and facilitating payments.

Singers Union (SAG-AFTRA, aka Screen Actors Guild-American Federation of Television and Radio Artists) - The labor organization responsible for ensuring fair pay and working conditions for Singers, Voice Actors, Actors, and other media professionals, setting rates and facilitating payments.

Union Signatory  - An entity (Ad Agency, Brand, Record Label, etc) that has signed an agreement with a Union (either the AFM, SAG-AFTRA, or both) to produce work under Union rules and contracts.  Signatory entities should theoretically only produce “Union” work and only employ Union talent on their projects, assuming the project involves a Work being created in territories under the Union’s jurisdiction. 

Union Job  - A Project where Musicians and/or Singers hired to perform under contract and terms of the AFM and SAG-AFTRA.   

Non-Union (Job)  - A Project where Musicians and/or Singers are hired to perform without being under a AFM or SAG-AFTRA contract.  Also referred to as a “Talent Buyout”, where all Musician fees are paid up-front (i.e. - not over time)  As Union residuals (usage payments - see below) can form part of a performers’ long-term compensation, it is expected that their fees are equal to, or higher than, expected union rates. 

Union Contract (Session) - The document listing the parties (Singers or Musicians) responsible for the creation of a Work. Each performer is listed on a “line” with the Service (e.g. Musician, Arranger, Leader, Copyist, or Contractor) they performed in creating the Work. A “line” will be comprised of a dollar amount that is the combination of a) the number of Units (base wage amounts) due for that service and b) Pension and Health and Wellness fund contributions which are calculated as a percentage of that base wage.

The total dollar amount of the overall contract will be dependent on a large number of factors including a) time spent in the session, b) number of Services performed by one performer, c) type of Service, d) layers of recorded parts and type of recorded parts, e) length in minutes of the Work being recorded and f) number of commercials/spots on which the recording is being used. Finally, Handling fees and Payroll Tax may be added as well.

Suppliers are able to estimate the amount of this initial Union Contract, aka Session Contract, on which all subsequent payments and further contracts will be based. They are generally NOT able to estimate the total amounts that will be paid over time in residuals due to the highly variable and usage-based nature of these payments.

Residuals (“Union”) - Payments due to the parties (Singers or Musicians) responsible for the recorded performance of a Work on an ongoing basis, based upon the Term, Media, and Territory in which the Work is being used and the number and length of Commercials in which the Work is being used. For the purposes of this definition, this includes ANY payments additional to and not estimated on the Session Contract – this includes, for example, Initial Use Fees, Re-Use Fees, Mechanical Edit Fees and Lift Fees. Payments are due on a cyclical basis throughout the use of a Commercial on which a Work is being used. Typical cycles, depending on the Union and Media, include 4 week, 8 week, 13 week, 1 year and 21 month cycles. Payment of residuals is always the exclusive responsibility of the Purchaser (Advertiser or Agency on its behalf).  Note that even licensed works (existing songs by known artists) may require Union participation, even if the original session was produced for another medium, such as a record release.  

Note: Residuals are often misunderstood as, or lumped in as, “Royalties”.

Talent (Payroll) Company - A company/organization knowledgeable in the intricacies of paying talent, specifically Union talent. A membership with a Talent company can streamline this process and offer a resource when Estimating for a project. Talent Companies generally work with Purchasers to ensure that initial and ongoing payments are made correctly based upon the Union contract that has been prepared. Examples: The TEAM Companies or Extreme Reach.

MEDIA

  • Content - Any online production, either advertising or otherwise, comprised of text, video, image, or audio information.

  • Digital  - Non-Broadcast content.  Best to inquire about specifics.  Can mean everything from digital media (CD/DVD, USB sticks) to website media, online streaming content (including “streaming television” and video sites like YouTube), Social Media, and more. 

  • OTT (Over The Top)  - Refers to film and television content delivered directly to viewers, provided via an Internet connection, rather than through a traditional distributor, such as a cable or satellite provider.  Common examples of OTT include services such as Netflix, Amazon Prime Video, Hulu, and HBO Now, but the term has been used more broadly, and it is always best to inquire further to the specifics if the term is used.

  • Below The Line  - Advertising that is not promoted through mass media, but relies on targeted, direct marketing campaigns.   Can be misinterpreted, so be sure to ask.  Has been used to mean non-Broadcast media by some, but also for infomercials or media produced to be distributed solely through an endorsee’s Social Media channels.  

  • Above the Line  - Advertising promoted via mass media and broadcast (TV, Radio)  For film, these terms mean something different, regarding separating budgeting costs between aspects of the production.   

  • Paid Media  - Digital/Online placement of advertising where the placement much be purchased.  This is different from Owned Media (which appears on a Brand’s own website or social media channels), and Earned Media (word-of-mouth, viral, search engine optimization, etc) 

  • Pre-Roll Advertisements - Online content (advertisements) that have been paid for by the Advertiser to appear in specific locations of the internet, for example, before a video being watched on YouTube. Pre-Roll advertisements may be paid for to run only in specific regions, just like a traditional commercial. Suppliers will generally charge more to Licensees for use of a Work on a Pre-Roll advertisement, both because it will reach a much larger audience than traditionally posted (un-paid) online content, and because (as of yet) there is no system in place for the Supplier to receive Public Performance Royalties from a Pre-Roll ad.

  • Paid (Boosted) Advertisements - Online content (advertisements) that have been paid for by the Advertiser to be “boosted”, most commonly on social channels such as Facebook, Instagram, or Twitter. Boosted advertisements reach a larger audience than un-paid online content, and may be targeted to reach a specific audience that exhibits interest in the advertiser’s product.  Boosted advertisements may be paid for to run only in specific regions, just like a traditional commercial. Suppliers will generally charge more to for use of a Work on a Paid advertisement because it will reach a much larger audience than traditionally posted (un-paid) online content.

  • Free-to-Post Web Content - Any online content (either advertisements or advertiser-sponsored content) that has not been paid for by the Advertiser to appear in any specific location of the internet. An example of Free to Post Web content would be an informational video created by a brand and then released on a) their website b) YouTube c) their Facebook, Instagram, or Twitter page. (aka “Owned Media”)

  • Organic Un-Paid Social - Free-to-Post Web content that exists only on social channels.

  • Industrial Usage - The use of content in any location that is not the Internet, Broadcast, or Radio. This is a widely variable category and generally must be defined more specifically between Suppliers and Licensees. Some examples of Industrial usages include internal company use (meetings or internally distributed emails), in-store use, experiential use (e.g. as part of an event or art installation), sporting event or stadium use.