Marching, Music and Money: Performance Rights and Videogames

Many of you may have seen the incredible halftime show by the Ohio State University Marching Band, performing a spectacular routine based on some of our industry’s greatest hits.
What you might not know is that you as a game developer/publisher can benefit financially (receive $$) when performances such as those are made—provided you know how to set yourself up to do so..…

To know how, you have to understand what is called a performance right.

When a composer writes for a game, they are usually under what’s known as a Work for Hire agreement.  This means that the copyrights of both the composition and the recording of the composition (they are separate things!)  belong to the game developer or publisher—whoever did the hiring.  That gives the developer or publisher the right to ship the music along with the game.  In that way, the music is not much different than art, programming code or any other element of a typical video game.

The musical composition itself, however, has another right based on both copyright law and tradition dating back a century or more.  That additional right is called the Performance Right.

What exactly is a Performance Right?  Simply put, a Performance Right is the right to control (i.e. get paid!) when music is either performed or broadcast to the public.

When a musical composition is performed or broadcast to the public, performance payments are due to the composer and “publisher” of the music.  It’s that simple. One obvious example of a public performance  is a live concert; but “public performances” also include background music for a movie shown on HBO, a TV broadcast that includes music or a  radio station’s broadcast.  Some not so obvious examples include a cover band playing songs in a bar, a movie being shown on an airplane, background music playing in a restaurant,  or a synthesized “ring tone” for a TV character’s cellphone.

Yes, you are a Music Publisher

In music industry talk, the “music publisher” is the entity that owns the copyright to the underlying composition.  When a piece of music is written commercially, very often (but not necessarily!), the composer will assign the music publishing rights over to whomever hired them—in our case the game developer or publisher.  We’ll see why that’s important in a few paragraphs.  So if you develop or publish games, chances are you’re also a”music publisher.”

Ok, so as a “music publisher” I’m entitled to get money if my game’s music is performed … like that football game playing marching band arrangements of my game’s music…

That’s all fine and good—but how do I know if someone somewhere performed or broadcast my game’s music?  I can’t exactly sit and listen to every radio station in the US, watch every football game, check every concert program and monitor every TV channel and radio station and then go ask them for money…

You’re correct—that would be a gigantic undertaking.  Fortunately, there are organizations whose sole purpose is to do pretty much exactly that—determine what music is being broadcast or performed and keep track of it all.  Those organizations are called Performing Rights Organizations, or PROs.  In the US, there are three main PROs, ASCAP, BMI and SESAC.  They also have international counterparts.  A PRO has three main jobs:

Determine what music is being broadcast or performed,
Collect performance royalties from those doing the broadcasting or performing and
Distribute the performance royalties to composers and publishers.

Read numbers 2 and 3 again.  The money for performance payments comes from those companies doing the performing and/or broadcasting.  PROs therefore collect money from radio stations, hotels, bars and restaurants, over the air, satellite, and cable TV networks, orchestras—to name a few and distribute it to the composers and music publishers.  The flow of money is from traditional broadcast media to the videogame companies and composers.

Oh..I get it.  It’s the radio and TV stations that pay performance royalties—and they pay them to us—the owners of the music!  That’s pretty cool..

This all sounds great—what do I have to do?

50-50 split

In order to receive payments from a PRO, both the music publisher and the actual human composer have to join a Performing Rights Organization.  After that, each composition needs to be named and registered—this is so the PRO can know who wrote what and what belongs to whom.  And of course, where they should send the royalty check in the event the composition is performed or broadcast.   The cost of joining a PRO ranges from nothing to a couple hundred dollars.

There is one very important note about PROs.  Usually a performing rights organization such as ASCAP requires that the performance payment be split 50/50 between the music publisher and the actual human composer.   And they won’t send a check to either unless they send it to both.  For this reason, half the performance royalty is sometimes called the “composer’s share” (sometimes called ‘writer’s share’) and the other half the “publishers share.”  This means you need to make sure the contract you have with your composer actually allows the composer to receive their portion of the performance payment from their PRO, because if they don’t get a check, you don’t get a check.

Sometimes there are seemingly innocent clauses in a standard software industry work for hire agreement that can preclude the composer from receiving the composer’s share of the performance royalty.  And if they don’t get a payment, the developer/publisher doesn’t get a payment.  A good way to ensure that doesn’t happen is to insert a clause similar to this into the contract:

“Composer shall be entitled to collect the ‘writers share’ of public performance royalties (as that term is commonly used in the music industry) directly from a public performance society that makes a separate distribution of said royalties to composers and publishers.”

All that does is let the PRO pay the composer for their performance royalties.  Since a game developer or publisher can’t receive a check from a PRO for the composer’s share, including a clause like this doesn’t take any money out of the developer’s pocket or cost them anything.  It’s also important to note that as a game developer, you can’t have the composer “sign over” the composer’s share.  The PRO will only send the composer’s share to the actual human composer.

Remember!  The phrase “performance royalty” is the money both you and your composer receive from the PRO as payment for the public performance of the music. Often a composer will try to insert that clause into their game contract and the game company’s lawyer will see the word “royalty” and freak out, usually thinking the composer is asking for some sort of “per game sold” payment.  (“Often” as in “it happened to me”)  They are not.  They are trying to ensure that they (and probably you, too) can receive performance payments from their PRO.

All this is very interesting, but I don’t see how it applies to video games.  After all, the only use for the music is in the game—a game isn’t like a movie, which might be broadcast on TV.

It is true that a lot of video game music is never performed or broadcast.  But consider the sell out concerts of video game music such as Video Games Live.  In addition to dozens of live concerts per year, last year Video Games Live was taped and  made into a PBS television special and broadcast nationwide.   Not only that, but arrangements of popular video game theme are performed in concerts, at football games (as in the Ohio State game) and other venues.  Not to mention specific game-related TV shows such as the VGA, etc.  And there’s the unexpected.  I had the good fortune of composing the music for the arcade video game, NARC.  That arcade game—and its music, were in movies such as T2, TMNT as well as (the very forgettable) “The Boyfriend School.”  And of course, we are all familiar with the South Park WoW episode.  With games so entrenched in popular culture, it is increasingly common for games to be shown—and the games’ music heard—throughout other media such as tv shows, movies and concerts.   (just 3 days after posting, the Ohio State video has over 4 Million views!) And with each, performance payments are collected by the PROs for distribution to the music publishers and composers.

How much are these performance payments?  They can run from virtually nothing to tens of thousands of dollars based on many factors, including ‘reach’ (how many people can hear the performance).  So a jazz quartet playing a game cover live in a small club won’t generate much in the way of performance payments.  That same song, arranged for marching band on a nationally televised broadcast… somewhat more.  And an episode of South Park that is shown over and over and over… quite a bit more, still.

So if you’re a game developer or publisher, don’t wince when your composers ask about including “Performance Royalties” clauses in their contracts.  They may be helping you make additional money without your having to do much of anything.

P.S.  Astute readers will realize that performance payments isn’t the only money game developers made from their music via the Ohio State Marching Band.  In later posts, we’ll discuss other ways of monetizing your game’s music.  Very astute readers will notice we’ve simplified things a tad and didn’t discuss what specifically constitutes a “performance” as well as the implication for streaming and the internet or Sound Exchange.  We’ll cover that later as well.  Music rights are a bit long for a single article!

Brian Schmidt is a 25-year game audio veteran and an independent Game Audio Consultant, Composer and Sound Designer at Brian Schmidt Studios, LLC.  He is also the founder and Executive Director of GameSoundCon.  Brian sits on the GDC Advisory Board and is President of the Game Audio Network Guild.

Source: Gamasutra