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Any time a filmmaker, showrunner, advertiser, video game designer, or any other user wants to incorporate a sound recording into their work, they first need consent from the song’s rightholder, usually given in accordance with the terms of a license negotiated by the parties. With the current climate wherein anyone can produce creative content, these ‘sync’ license deals are becoming a steadier, more viable revenue stream for music industry rightsholders.
Industry-wide data tends to support this assumption. Year-end reports for 2022 demonstrated that synchronization royalties generated $382.5 million in revenue for the music industry, up 24.8% from 2021. In fact, income brought in from sync deals was one of only two non-streaming categories to post positive growth (the other being vinyl, up 17.2% from 2021). Further, adjusted for inflation, sync generated almost $50 million more in 2022 than it has in any other year with recorded data. To provide some perspective, it is worth comparing sync royalties with the digital single download. Since 2021, sync revenues have outpaced the digital single download, which once made up nearly one-fourth of all industry income. This progress indicates that sync licensing has “the potential to keep growing at a healthy pace for a while.”
Unlike compulsory licensing mechanisms that can be found elsewhere in the music copyright landscape, each synchronization license must be individually negotiated between the rightsholder and licensee. Natural bargaining power dynamics develop in accordance with such negotiation. Let’s consider a Netflix television show that is looking for a song to play during an episode end credits sequence.
Scenario 1: The studio may reach out to an artist (or, more practically, their label) with a specific song in mind to fill their need. The artist could be very well-known, but also might be very particular about licensing their music for use in other media. The studio may have already intended on naming the episode the same title as the song they wish to license, and there may be some dialogue in the episode related to the song or artist. In such a scenario, the artist holds a great deal of bargaining power, and the studio will likely have to agree to pay as much as hundreds of thousands of dollars in exchange for the synchronization license.
Scenario 2: An undiscovered local artist may be looking for an additional revenue stream, as their music has not been getting enough play to make a living off of. The artist may reach out to the studio (or a sync placement intermediary), offering up any and all recorded works. In such a scenario, the studio holds all of the bargaining power, and the artist may only be offered a few hundred dollars in exchange for the synchronization rights.
In this way, bargaining power plays a crucial role in developing the terms of a sync license.
The publishing side receives an additional benefit from sync licenses. On top of the initial payout negotiated up front, those who own publishing rights earn public performance royalties for each play of the audiovisual work. Through this mechanism, a rightsholder on the publishing side can expect continued revenue streams from a sync license for audiovisual projects like commercials or reruns of television shows.
Practically, deals are not always brokered directly between a studio and an artist. Sync libraries exist as an industry middleman, allowing artists to upload their music to readily license to those seeking music to add to their creative projects. Essentially, this creates a marketplace for licensees to shop for and purchase licenses for the musical works that best suit their projects. Other companies post listings for film and television sync pitching opportunities.
Why would the artist from Scenario 2 above relinquish some creative control over their music for merely a few hundred dollars? For many artists, their main motivation for permitting uses of their songs in movies, television shows, commercials, and video games is often not primarily financial. Instead, just like in the days where AM / FM radio airplay brought exposure to artists in return for little-to-no (or even negative) compensation, so too does sync licensing placements provide opportunity to reach larger and untapped audiences.
For an extreme example, singer Kate Bush experienced a resurgence to the charts with her single Running Up That Hill (A Deal With God) after she agreed to place the song in popular Netflix series Stranger Things. Bush’s sync deal paid off big time: Spotify streams for the 37-year-old song increased 9900%, and her overall catalog received a 439.3% lift as a result of this placement. Bush owns the masters to many of her songs, so much of these streaming royalties goes directly to her. The Stranger Things sync placement led to boosts in revenue from another sync deal in place with TikTok; Running Up That Hill has been attached to over two million TikTok videos, many of which with substantial view count. And TikTok pays out for such sync uses on a per video basis, so Bush doubtless has benefited substantially from consenting to use of her song in Stranger Things.
More generally, this trend holds true. In a joint study published by Netflix and Spotify analyzing stream results from sync placements with Netflix, the companies reported that “artist discoveries jump between +50% and +6,000%” in the wake of appearances in series on the streaming platform. Sync placements lead to engagements beyond streaming as well; “Harry Nilsson's 1971 song ‘Gotta Get Up’ was added to 7,613% more playlists in the days right after it appeared in 2019's Russian Doll, compared with the days right before.”
While movie, television, advertising, and video game synchronization opportunities have been around for decades, social media sync opportunities have quickly become an important channel for emerging artists. TikTok specifically has played a critical role in launching many artists to stardom including Lil Nas X, Lizzo, and Jack Harlow.
By the structure of the platform, TikTok offers a social mechanism through which a catchy or trendy song can be synced by hundreds of thousands of users and viewed, reshared, and commented on millions of times. For example, Tai Verdes was working at a Verizon store in Los Angeles when he put out Stuck in the Middle on TikTok; the song quickly made him a viral sensation, and he has since signed a record deal, amassed over 7 million monthly listeners on Spotify, and accumulated over a billion global streams. For undiscovered artists, Verdes posits that TikTok “is like buying lottery tickets,” and that exposure can come for artists who make use of the platform at every opportunity.
TikTok exposure pays dividends for established artists as well. For example, Fleetwood Mac’s Rumours returned to the Billboard Top 10 album chart for the first time in forty years after a TikTok video of a cran-raspberry-sipping skateboarder singing along to Dreams went viral. Let’s Groove by Earth, Wind & Fire “saw its Spotify streams rise by 24.7% 60 days after its peak on TikTok charts” as a result of a viral dance trend. Another TikTok dance caused Spotify streams for Sandy Marton’s 1985 release Camel by Camel to jump from 45,000 to 5.8 million. Surely, the platform allows for artists of all types to reach wider audiences and indirectly grow their streaming revenue.
Returning to a general discussion of sync, exposure increases from sync licensing translate to real money. Let’s take a moment to appreciate how these increases in streaming royalties translate to dollars and cents. For example, reports indicate that in the month immediately following the airing of the Stranger Things episode bearing Bush’s song, Bush earned $2.3 million in streaming royalties. Elsewhere, a study of 100 viral TikTok songs demonstrated a combined earnings of over $100 million.
Synchronization licensing is a low-risk, high-reward revenue source for artists and songwriters who can take advantage of the sync market and invest in themselves. The importance of this market within the music industry has experienced a steady uptick in recent years and projects to hold steady as a major contributor to formulating how music is created, curated, and consumed. Rightsholders in musical works should understand the up-front and long-term, direct and indirect benefits of sync deals. Such knowledge and foresight involving sync licensing can play a crucial role in launching a career, skyrocketing streaming numbers, and earning serious money.
One final point: the Hollywood Strikes—in which writers and actors are both advocating for fair pay and responsible use of A.I. practices, among other bargaining points—will obviously lead to less sync opportunities for film and television in the near future. But this temporary diminution in the sync market will not last indefinitely, and artists should be optimistic that a return to the Hollywood status quo (once a labor deal is struck) will bring with it an influx of new demand for sound recording synchronization placements.
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