Heart of Steel: Interviews

Industry Profile - The Licensing Partnership’s Rick Daniels: Partner Explains the Licensing Business

Interview by Keith McDonald

I really didn’t know much about back catalogs or licensing until I started working for a independent hard rock and heavy metal label back in the mid 90’s. I started off doing international licensing for acts that we were signing to our ever-growing label. I learned as I went and did I see a lot of money to be made. When I came across The Licensing Partnerships (TLP) website I figured it would be a good idea to interview these guys. When an artist signs with a label, it is usually for a worldwide deal. The bigger labels, like Sony, Warner and Atlantic have label affiliates around the world that will release the album in their specific territory (Europe, Japan, etc.). Now with the smaller labels like a Spitfire, CMC and Century Media, they will usually license out their product to other labels around the globe. Now TLP is a company that can do exactly that. What they do is use their vast contacts around the world to make sure albums are out there available to the general public. I had the opportunity to speak with Rick Daniels who gave me some insight into the world of musical licensing. You can check out their website at www.licensingpartnership.com.


How did you get started in the music business?

While playing guitar in a number of London-based Rock bands in the ’80s, I held a day-job at a large audio/video duplicator. I learned a lot about production and manufacturing and eventually, recognizing that my performing career had gone about as far as it was likely to do, accepted a full-time Production position at (then) PolyGram UK. Very quickly my responsibilities were expanded to include licensing-in repertoire for PolyGram’s premium compilations area. I particularly enjoyed the “doing the deal” side of licensing and was fortunate to have established an extensive network of contacts which ultimately resulted in twelve years’ UK and US major record company experience in licensing before joining TLP in 2001.


How did TLP start?

TLP was created in February, 2000 by Paul Hatcher, whose (then) nine years’ international licensing experience had made him keenly aware of the ever-increasing number of licensing opportunities being missed by many, many independent labels around the world. Drawing on Paul’s vast network of contacts, TLP quickly became established as a business-to-business entity that very effectively brought together those looking for music to exploit with those owning the rights to license the music for commercial exploitation.


What exactly does licensing mean?

It is the formal permission of a copyright owner granting a third party certain rights. In the music industry, it is absolutely essential that third parties obtain the necessary licenses from both the repertoire owner (usually a record company) and music publisher for including a track on a compilation, in a film, TV program, commercial, etc. Even in its simplest form, any license should confirm the details of how the music will be used, by whom, the fee, the territory involved, the term for which the license applies and other specific information that clearly states the rights and responsibilities of the Licensor and the Licensee.


How does the licensing procedure go about?

Once we’ve established what the prospective Licensee is seeking to license, we confirm the Licensor’s rights and obtain their approval of the deal. We then confirm these in writing to the Licensee and, after receiving their counter-signature, provide them with masters and label copy. An invoice for the Advance is then sent to the Licensee and a formal Agreement is issued. We at TLP monitor the subsequent royalty accounting throughout the term of the Agreement.


Who are some of your clients? Who is your most successful?

Our clients include Concord Records, DRG Records, Peak Records, Philly Groove, Snapper Music, Unidisc Music and more. As regards the most successful,… that remains to be seen!


How important is it for a label to license their product?

As a means for recouping investment and providing additional opportunities to promote an artist, licensing is extremely important to labels of all sizes. The income derived, for example, from licensing a track to multi-artist compilations can often mean the difference between a profit or a loss on having signed an artist. Moreover, by having a track appear on such compilations, this often gives an artist exposure to a consumer whom otherwise might not be aware of the artist or, for that matter, a whole genre of a label’s music. Synchronisation licenses provide another potentially huge opportunity to promote an artist as well as generate very significant income. One of the best examples was the phenomenal, renewed interest in the recordings of the Righteous Brothers following the inclusion of “Unchained Melody” in the movie, “Ghost.”


How important is a back catalogue? How well do some of them sell?

This was succinctly expressed some years ago by former Director of Catalogue Marketing for Warner UK, Phil Knox-Roberts, “If A&R is the lifeblood of a record company, then Catalogue is its backbone.” A rich catalogue allows opportunities to re-release existing archive material and, in some cases, make available to the consumer previously unreleased recordings. These catalogue activities can generate very substantial income that may then be used to fund a company’s other activities, such as signing new artists, and indeed may serve to strengthen a company’s financial position during periods when its front-line sales are in the doldrums.  Nowadays, a major record company would expect turnover resulting from their catalogue activities world-wide to yield well into the $100Millions annually.


How vast of a catalogue does TLP handle?

We presently represent eleven independent catalogues for licensing activities. In total, these amount to more than 20,000 individual recordings.


How extensive of contacts do you have around the world?

TLP’s database of contacts contains details of more than 1,600 people world-wide and, I’m pleased to say, continues to grow at a gratifying rate!


Which are the major territories? What are some smaller ones that are harder to sell product?

The US is obviously a huge territory and its film/TV industry provides a wealth of licensing opportunities for those in the business of licensing music. The UK, Germany and Japan are major territories as well, albeit with considerably smaller film/TV industries. Many of the smaller territories have distribution and other agreements with the regional offices of much larger companies; thereby ensuring that bona fide product is made available to the local marketplace while at the same time added measures are taken in the fight against piracy. Regrettably, however, piracy remains prevalent across much of Africa and Asia and certainly caution is urged when considering new business opportunities with companies lacking a proven history of sound business practices.


What genres of music do you handle? Which are the more popular?

We represent labels ranging from Rock to Disco, Latin to Classical, Jazz to Nostalgia as well as a small, but growing number of independent Dance tracks. The popularity of each genre varies from one territory to the next. Rock does well in the US, Germany, Japan, Brazil, Spain and Australia while Dance music remains the clear favourite in the UK, Italy, Holland and many other European countries.


Is there a fee? Does your company receive royalties?

We charge our clients a commission based on a percentage of the license we negotiate on their behalf. Some clients prefer that we take a higher commission upfront with no “back end” royalties while others prefer a lower initial fee with royalties to follow on a quarterly or half-yearly basis.


Do you handle only music or other aspects of the entertainment field?

As it currently stands, the bulk of our business is music related, however, we do handle the licensing activities of several clients in the software design industry.


What's the future for TLP?

We will continue seeking new partners with whom we can further develop our existing business, while exploring fresh licensing opportunities that arise from new technologies and industries outside Entertainment.

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