Music Publishing and Licensing Blog

License pricing research

This article provides an introduction to some of the research that LicenseQuote has done to establish reference points for our standard (default) license pricing values. The first step was to find a number of active music licensing libraries competing in the same general marketplace.

Selecting a sampling of independent music libraries
As early as 2006/2007 we found a cross section of small, medium and large independent libraries which were all online and could be easily and freely accessed. In each case the companies provided an instant pricing mechanism based on various selections of typical license usage properties.

How many and which libraries where used?
About 10, but at least 7 for one important “leg” of the pricing comparison research. Though no direct pricing correlation will be shown (for privacy protection) we can list the most common ones used in our sample pool. Though these companies have changed in the last few years most are still functioning. While some have been sold or revamped dramatically since our research began they included: Audiosparx, BeatPick, DayForNight, LicenseMusic, Magnatune, Rumblefish and TVMusic among others.

Setting a common denominator
What makes this kind of price comparison challenging is that each library has a different set of license types and usage properties. Therefore, some common denominators had to be determined to make useful comparisons from which to derive typical values and averages among libraries with similar license types.

Most common license types
The most common license types offered in our sample group of libraries were:
TV Advertising, Radio Advertising, Internet (Web site), Motion Picture (aka Film), TV Show, CDROM/Video/DVD, and Video Games. Each of these license categories has their usage options optimized for their market, so it was best to first determine the most common license usage parameters used. The calculation parameters were matched with the closest possible properties and usage details across the same license types from different competing libraries.

The parameters table used:
TV Advertising – U.S. National, 1 Year, 60 secs.+ up to full length,
Radio Advertising – U.S. National, 1 Year, 60 secs. + up to full length
Internet (Web Site) – Theme, full song, looped, business, max. views or budget, 1 year
Motion Picture – U.S., full length, feature, closing credits, trailor use, mid budget
TV Show – U.S., entire song, 5 years, theme, all TV rights, no foreign or home rights
CDROM/Video/DVD – Public, entire song, not theme, unlimited views and/or budget
Video Games – Full length, theme song, trailer ad included, unlimited views, 1 platform

As you can see from chart above, a common theme of licensing parameters (usage options) include things like: territory (local, regional, U.S. or other countries), duration of license usage (weeks, months or years), length of song (up to “x” seconds or minutes), project budget (when available), theme song or not, various rights included (foreign or home, etc.), private, public or business use, number of views and platform of usage, etc.

Using the parameters chart
When quoting prices from the different libraries, this chart was used to approximate as, close as possible, the most relevant price comparisons among the same License types. The pricing result was still surprisingly “wide” (from low to high), so three columns were set up to compare the most typical price points as follows: Lowest Quotes, Medium Quotes, Highest Quotes

Not surprisingly, most companies offered license types running the range from lowest to highest price points, so there was little middle ground pointing to a most common average from only a few libraries, but would become more evident when comparing across the board from among a larger sampling.

Setting up the pricing table
To organize this, a pricing table was set up which placed the companies, license types and quotes in columns to compare lowest, medium and highest price quotes among the whole sample set. Though useful to spot price ranges for unique license types among the different vendors, this data needed to be charted in a more useful way to see median price point (low, medium and high) ranges among the same license types. This results in the compiled averages table.

When viewing this table, you’ll see the list of License Types in the first column (on the left), followed by the Lowest, Medium and Highest averages for each license types among the whole set of sampled libraries. The last column (on the far right) calculates the Overall Averages for each unique license type.

The results were as follows:
License Type - Overall Averages
TV Advertising$7,258.28
Radio Advertising$2,042.00
Internet (Web Site)$5,800.67
Motion Picture$8,643.83
TV Show$1,640.50
CDROM/Video/DVD$8,308.33
Video Games$26,385.00

What these averages mean
Again, these numbers don’t mean much unless you compare them with the parameters table displayed above. Of course prices may vary greatly from these compiled averages based on a number of usage parameters which can vary greatly and are often negotiable, especially for inquiries which request custom usage price quotes. 

Other things which will effect pricing are the relative demand or popularity of a song, the band that recorded it or the composer that scored it, etc. Then there’s production music (generic, usually non-exclusive) cues which are used in the background, so these kinds of tracks typically license on the lower end of the price range, etc.

Conclusion
The pricing from this research study is historic, about 3 – 4 years old. Some things have changed, but the overall averages are still relevant to this day. They give historical perspective which can be used to compare with today’s current pricing and usage parameters for the most common kinds of commercial licensing. Regardless of recent economic and industry changes, there will always be a fair value for music needed in commercial licensing projects and venues. Though historical data can serve as a guideline, it is the living, dynamic marketplace which ultimately determines today’s negotiations and pricing deals.

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