This is a guest post by an established independent artist and songwriter, with tens of millions of streams to their name. After researching a number of platforms in the micro-sync (or micro-licensing) space for their own music and career, they contacted Music Ally to share their thoughts on the state of this burgeoning sector. With their approval, we have turned their emails into this guest column.
As a reminder of what micro-sync (or micro-licensing) is: in an extract from his book published on Music Ally last year, Nick Sadler described micro-sync as, “a revenue source derived from platforms such as YouTube […] the mass use of music in User Generated Content creates thousands of micro music syncs.”
This artist’s opinion on the sector is not a wholly positive one; in fact, they are very concerned about what they consider to be the opaque and predatory nature of some of the deals on offer, which, they believe, take advantage of some musicians’ lack of understanding of how licensed music revenue is commonly split. However, they do not think that micro-licensing is, in itself, bad – and in fact signed a deal that they considered to be beneficial. This piece offers guidance for songwriters who can see opportunity in the micro-sync space for their music, as well as some guidelines of what kind of deal would work for them. The author has requested anonymity so as not to harm their music’s chances on micro-licensing platforms.
Micro-sync is a fast-growing industry segment. Maybe close to $100M has been invested into micro-sync companies at this point.
Micro-sync companies are gaining traction in what is potentially a really powerful new growth model for music, but some companies are racing to the bottom, not only in terms of price versus what is given, but also in the platform/creator revenue share split.
On this front, I – as a musician and artist – am concerned. Having spoken to five of the “main” companies in the space, exploring deals for my own music, about half are offering what I consider to be fairly predatory deals. By this I mean the revenue splits: they are offering 30% to the rights holders, and 70% goes to the platform. I believe that they are preying on unsuspecting creators who don’t know better.
In traditional sync, a sync agent (or publisher administrator who moonlights in sync) will usually charge 20-30% on upfront sync fee – maybe 50%, maximum, and all on the front-end.
When I say “creators who don’t know better” – many creators, I think, still don’t fully understand that DSPs pay out 70% of their income. And this new micro-sync revenue model flips the DSP split on its head, by diverting 70% to the platform. These platforms are monetising music for the creator economy at scale, whilst offering an objectively predatory revenue split compared to the wider industry and the traditional sync model.
A lack of transparency
Some of the models I’ve seen are even worse and less transparent, and are not built on a percentage-share of the revenue but on an opaque credit system that essentially caps the upside for the creator. For example: by asking, I found that enterprise-level sync usage pays out the same as a YouTuber with 50k subs.
These kinds of models make me feel like we’re going backwards as an industry, in terms of fairness to rights-holders and artists within this sector.
Even Production Music libraries – which some of these micro-sync platforms are essentially competing with, but for YouTube Content ID as the ‘main funnel’ – traditionally pay out 50% or better to the music creator. I’ve never placed any music with a production music library, but having spoken to friends who have, I have seen library music receiving 50% of the publisher share, and up to 100% of publisher share seems common (with recording rights usually staying with the creator to collect neighbouring rights, distribution to DSPs, etc), and any upfront sync fee split 50/50.
So with this in mind, a small handful of micro-sync companies are actually offering deals within that range, or even a better deal, depending on how you look at it.
What a good deal looks like to me
With these criticisms in mind, I did sign with one established, ‘legacy’ micro-sync company that provides a 50-60% revenue share net profit split and which seems to get good results for their artists. But they are extremely boutique, accepting only 1% of those songwriters who apply so that their royalty pool doesn’t get diluted, and they have a proven model outside of micro-sync – including landing big traditional syncs. They also pay out 80% on ‘regular’ content ID monetization – more akin to and within standard distro deal ranges.
Given how hands-on the Content ID admin has to be for the model to work, I view an approximately 50/50 split to be more like a very hands on “big indie label” net profit split-license deal – which in context of the wider market, is a better deal and the best I was able to find. Generally, I feel really good about the deal.
I’m happy with the deal I signed, but there’s many deals out there that are not favourable. I’m able to recognise that a 30% artist / 70% platform split is very exploitative – especially for sync. So my advice to creators would be: know the common revenue split ranges of various roles and platforms (see the info box below).
All of these companies want “real music” from “real artists” to supply to creators who want high quality music to use in their work. These songwriters and performers should, in my opinion, thus be paid at a premium or fairer rate, compared to the alternative, which is quickly-produced production library music.
Some guidelines for indie artists
Below are my rough guidelines to splits across the industry, to help any indie artists contextualise the deals offered to them:
- I recommend using this record deal simulator to get a general feel for how deals work.
- Indie labels – a 50/50 net profit split is common, but regardless of advance/recoup/terms, 50% or better to artist seems somewhat common.
- Major labels – 15-25% to artist, post recoup*
- Distribution – 5-30% to distributor, if it’s a percentage deal.
- Booking agents – 10 to 15% to agent.
- Management – 10 to 20 % to management.
- Sync agent – 15-30% to agent is common – max 50% to agent, all on the front end. Nothing on the back end if they are not also a publisher.
- PROs – around 7-15% admin fee.
- Publishing administrator – 10-25%.
*Note: Recoupment terms – before reaching a 15-25% rev split – are generally very different from an Indie-label -style net profit split, and, in comparison, generally takes much longer to recoup as there is an extra profit margin for the major label built in.
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