If you need some information pertaining to licensing music in ring tones and ring back tones; then refer to this guide. This may not be applicable in all countries but at least it will illustrate the general process. First, this guide is only applicable to the use of master sound recording in mobile phones otherwise known as “master tones”, “true tones” or “real tones”. Master Tone is using the true audio recording of a music in mp3 format (may use another format depends on the telecommunication carrier) as opposed to the old polyphonic ringing tones. This has grown so much in popularity over the years and is actually a $6.8 billion business last year in 2010 (Source: USA Today).
The one that will surely benefit from this is the owner of the master recording. In majority of cases, this is the major label or an independent recording label. Or if you are independent artist that creates your own recording (such as bedroom/home music producer), you can as well take this opportunity.
Mobile phone cellular ring tone
So how this licensing works?
First, telecommunication carriers are very selective with the music that they choose to sell as tones to their customers. And you need a contact with these companies to help you land a successful deal.
This is where establishing connections can be important; and once someone is interested in licensing your music for ring tones or ring back tones. Its time they will look seriously in your catalogue. Common questions will be asked are as follows. Make sure you are prepared on how to answer the following questions as accurately as possible:
1.) How many songs in your master recording catalogue? – These are the number of music that have commercially released master recording and that you also own the master recording copyrights.
The bigger the number of songs in your catalogue, the better the opportunity since it will translate to bigger royalties, better advance payment and lots of choices for your client.
2.) What are the best songs in your catalogue? – Your client is primarily interested for “potential hits”. Make sure you provide a list of great songs by order of importance so that they will prioritize these songs during the song audition process.
3.) Do you allow your catalogue to be licensed exclusively? – Some clients may want to license your catalog exclusively. But most of the time the deal will be non-exclusive.
The purpose of #1, #2 and #3 is for your client to get to know your catalog, genre, style, etc whether it will fit their business model and other potential clients. Finally if the negotiation of #1 to #3 goes very well, your client will tell you that they will be interested in continuing with the licensing application and will provide what songs they would like to license. In some cases, these might be subsets of your catalog (e.g. only those hits) or they might be interested in licensing your entire catalog.
This is the time when both of you will be negotiating for the licensing fee. This is critical because the fee must sound reasonable in both parties. There will be two royalty payments that will be provided to you as the sound recording copyright owner.
a.) Advance payment – your client will pay an advance sum of royalties to you. This payment will be recoup from your monthly royalty statement. Both of you should agree to a specific advance payment. This will be provided after the agreement becomes effective and signed. There are no specific guidelines as to how much advance payment that you should be receiving. It should be agreed for both parties.
b.) Monthly royalty statement – again you and your client should agree to a percent share of royalties that should be provided for each sale of ring tone or ring back tone downloads. There is no rule as to what percent as long as it sounds reasonable to both parties.
Note: Exclusive agreements command a higher advance payment as well as higher percentage of monthly royalty statement as compared to non-exclusive deal.
Now that the royalty payments have been agreed; it’s time that both you should talk and agree with the rest of the terms that should be included in the music licensing agreement.
What to do after negotiation?
It’s time to put everything in writing. You or your client may contact an entertainment attorney to finalize everything that has been agreed. Finally once this agreement has been put into writing, both of you will happily sign the agreement.
What happens next? You will provide your client with the complete master recording of your tracks. This can either in MP3 or WAV format. You can send via online methods as there are lots of feasible solutions such as YouSendIt, etc. Provide the highest resolution copy of your recording.
For example, if your client wants only MP3, then send 320Kbps CBR encoded MP3. Or if it’s WAV, send the 16-bit/44.1KHz CD audio format. You can also burn the copies to a CD and send to your client via courier. Your client will then start earning sales from downloads and you as well will be receiving advance payments and monthly royalties.
What to do after delivery of your recordings?
1.) It’s important that you should know how to track each sale in your catalogue. You can ask your client if online reporting of downloads are available so that you can monitor the progress of your sales.
Ring back tone sales
2.) Sometimes if your client is also an agency of the telecommunication company that is licensing songs for ring tones; they do not have immediate access to these financial reports. In this case, the telecommunication company would be providing report to the agency. The agency would then provide the report to the music publisher.
Content last updated on July 29, 2012