Recording - December 2013 - 52

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the front row with that print shirt meets a guy at a bar
who's a music supervisor and hands him something,
it's cool to do that even though he's in your catalog?
Tanvi: That's right.
OK. Adam, give us a definition of what an exclusive
deal is.
Adam: And like Tanvi said, there are variations in
it. It usually comes down to the terms of the contract. The general thing is that you're giving up
your copyright and that there are limitations on
what you can do with your music outside of that.
OK. So, why would a music supervisor then, Adam,
not want to use a non-exclusive song or track?
Adam: For one, as you said before, there are certain networks that are not making those kinds of
deals anymore. They don't want to deal with
non-exclusive.
Why? What are the dangers?
Adam: I don't know if it's dangerous. My perspective is that part of it is ...
Your personal perspective? Or your perspective as
the role you're playing?
Adam: As the role I'm playing, and the thing is
that they don't want to make blanket deals with
the same music over and over and over again.
Tell the audience what a "blanket deal" is.
Tanvi: That's a very valid financial point.
Adam: So, the point is if your music is in 10
libraries and I'm a network, why would I want to
pay for each one of those 10 libraries if they have
a lot of crossover... the same songs or tracks
showing up in several of those catalogs. It's kind
of like when I was a kid and I'd buy packs of baseball cards and each pack would have the exact
same guys in it, and maybe there'd be a few different ones. You're spending money on it, but
you're kind of getting the same thing in a different order. So, the networks are looking at it like,
"So, why are we paying all this money for the
same stuff?" So, a few of them are not making
those deals anymore.
Tell them what a blanket deal is. Just because there
may be people in the room who aren't really clear on
that.
Adam: Well, it's generally when a library will sign
52

a deal with a network or a production company
to use all the music or certain parts of their catalog and it kind of covers as many uses and all
uses. It depends again on the particulars of the
contract, but it kind of covers them ... they'll
deliver a hard drive to the editor and the editor is
free to use whatever he or she wants to use.
So, there could be 10,000 pieces of music in that catalog and on that hard drive and let's just use the
example of the History Channel. So, a production company that does a lot of stuff for the History Channel
could then use anything that's on that hard drive and
then the catalog owner, let's say gets paid $50,000 for
that all-year-long usage. That's called a blanket deal.
So, then they track the stuff via cue sheets and at the
end of the year they take that $50,000 and they're
supposed to divvy it up proportionately to the musicians who got used from the catalog. Did I explain that
appropriately enough, guys?
Tanvi: Yeah.
OK, so Adam's point is that if that production company
does a lot of stuff for the History Channel, let's say, just
giving an example. If they are one of three libraries,
then because you guys might have non-exclusive
music in library A, B, and C. Hypothetically, there could
be a 30% overlap in those three catalogs, which does
devalue those catalogs, right? And, Tanvi actually
asked me right before we went live today if I was
going to talk about the whole devaluation thing. That
is probably the most hot-button issue within this
whole issue. So, let's talk about it, from that perspective. I guess I'll have Adam do it because he's playing
the role of the exclusive guy. What would the exclusive
person's view be of how non-exclusive devalues music?
And then, I'll have Tanvi counter that.

that the networks, who are the buyers, are the ones
who are setting the pricing. And the truth is, there
is a musician born every minute and there are millions of songs, and the value to the production
company that is creating the budget, music is the
last thing that they put a budget in for. I mean, as a
music person, you would want them to say, "Hey,
we're going to spend $50,000 on an episode or on
a film" and that sets the values. So, whether you're
an exclusive company or a non-exclusive company,
you have no say on what the final price is going to
be for that spot. And if we're talking about the proponents of the exclusive catalogs, the majority of
the proponents are production libraries and the
production libraries are notorious at leaving the
rates pretty low. So, you know, a lot of the nonexclusive companies are independent artists
catalogs and most of the time we are able to get
more dollars for the spot because it isn't a real
independent artist. But we're also up against,
"Well, you know, this library will give not necessarily the same track but another song for this spot I
can get for $800. Will you match this price?" So,
you know, it's really, at the end of the day, the
value is set by the client; it's not set by the supplier.
So, it's just basic market supply and demand
economics. I really don't think it has a whole lot to
do with the exclusive vs. non-exclusive, but people
would counter that.
Adam: There's just one Mona Lisa. It's priceless,
right? What if there were 30 Mona Lisas? How
much would it be worth then?
Yeah. So OK, so be the exclusive guy and make the
argument for exclusive vs. non-exclusive.
Adam: But that's my point!

Adam: Yeah. Where should I start? Let's say that I
want to buy a pair of gloves online, so I'm gonna
look and see where I can buy it online. So if there
are 10 people selling it online, I'm going to buy it
from wherever it is the cheapest. That's what
you're gonna do, right? So if the same thing's
available in multiple places, I'm gonna buy it
from wherever I can get it the cheapest. Versus if I
want to buy a pair of gloves that only the Gap
makes, I have to just go to the Gap and I'm gonna
buy it for whatever price they sell it. And it's simple. It comes down to economics. You know, if
you keep spreading it out there, people are going
to drive the price down. On the other hand, there
is another financial concern, which is-and this
comes back to the issue of the networks-there's
an argument to made that there could be higher
sync fees and higher royalties for syncs that are
on network shows and that could also affect how
much money you're going to get.
OK, so Tanvi, how would you counter that?
Tanvi: I agree that it's the total marketplace that
sets a value on a product. The fact of the matter is

But you're just talking about supply and demand.
Adam: Right, but if you can get the same thing
from 20 different places, one guy's going to
undercut the next guy. One guy may even do it
gratis [free]. I'll give you a great example. I
licensed a song as the main title for a TV show.
Unbeknownst to me, it was being pitched by a
non-exclusive library that undercut what I got the
artist and got the deal because of a clearance
mishap. So, this guy basically halved what the
artist would have gotten because they undercut ...
Tanvi: Well, you're never going to know that as a
supplier. The supervisor's not gonna come to you
and say, "I can get this track from somebody else
and pay less." They're not going to tell you that.
So, there's no way of knowing.
Adam: But, like I said with my Gap analogy, if
you're the single seller, you can name whatever
price you want and that's the price of it. But ...

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Recording - December 2013

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