With recent blockbuster syncs highlighting the power of a great placement and the continued proliferation of content platforms seeking music, Eamonn Forde explores how sync fees and budgets are evolving.

The sync success story of 2022 is, unquestionably, Kate Bush and Stranger Things. The use of ‘Running Up That Hill (A Deal With God)’ became a huge TV moment, but there was also its phenomenal chart impact, giving Bush her first number 1 in the UK in 44 years and scoring a number 1 on the Billboard Global 200 chart. For a deep catalog track, one that was 37 years old, to achieve this out of seemingly nowhere became a huge talking point for people outside of the traditional sync business. 

There were estimates that Bush, who controls her recorded music and publishing rights, made £2.3 million from streaming royalties from the song in the weeks after it became a phenomenon. That is on top of the sync fee, which has obviously not been disclosed. The economics of the sync became as debated as the creative behind the sync. 

Against mounting worries about the digital monies flowing, or trickling, through to songwriters – as discussed in length in Synchtank’s recent four-part Music Publishing in the Age of the Songwriter report – this was seen as a financial triumph and sync started to be discussed as marking a new post-streaming gold rush. 

Yet as a blockbuster moment, it was the exception rather than the rule. Jonathan Palmer of BMG told The Guardian that it was “a bit of a unicorn”, adding that “most of my colleagues would admit that’s a once-in-a-decade thing”. 

But what does this new focus on sync all mean for anyone who isn’t Kate Bush?

The contracting and expanding dynamics of sync budgets

The sync market grew sharply in 2021, with the Hollywood Reporter stating that sync royalties for use in TV shows and movies reached $302.9 million last year, up 14% from 2020. (It did not, however, mention just how badly hit the 2020 numbers were because of the pandemic putting a multitude of productions on hold.)

At the top end, there can be phenomenal sums to be made from syncs which can then have a profound impact on streaming income. Yet there are concerns that, further down the pecking order, sync fees are being frozen or reduced, with the deal terms simultaneously being extended so that syncs are working through longer terms and across more platforms for the same (or even less) money. 

There is, according to Susan Schwartz, founder of music supervision and licensing company Get Music, a growing bifurcation in the sync market as huge hits command incrementally higher fees and lesser-known songs see rates slip. This is largely down to major catalogs being acquired for enormous multiples and, thus, worked harder – as well as the TikTok-powered viral impact of streaming TV. 

“Recognizable catalog tracks are definitely more expensive than they were even a few years ago,” she says. “Indies and up-and-coming artists are usually still very flexible with their pricing.”

What that means is that budgets at TV and film companies are generally getting squeezed, apart from a handful of blockbuster songs. Schwartz, who specializes in advertising, notes that the same can be said across the agency landscape.

“Clients want more bang for their buck across the board, which affects not just the music they can afford but also everything creative that goes along with a campaign,” she says, adding that agencies typically have smaller production budgets to work with as advertising moves onto digital platforms. 

“But their clients expect the same quality of work that they’ve got from the agencies in the past,” she adds. 

“With the increasing amount of people accessing content digitally, a heavier sync value has been placed on digital advertising in recent years, although conversely budgets have not necessarily grown due to the varying costs for digital ad placements.”

– Megan Goldstein, BMG

Megan Goldstein, BMG’s VP of sync licensing, adds, “Across most media, there’s still an appetite for big budget songs when the use is right. With the increasing amount of people accessing content digitally, a heavier sync value has been placed on digital advertising in recent years, although conversely budgets have not necessarily grown due to the varying costs for digital ad placements.”

Sync fees for certain golden oldies rise, but sync fees for branded social media content are falling (while use of library music is becoming more commonplace)

When deals are being done for catalogs that run into the hundreds of millions of dollars, the acquiring companies will be keen to get those catalogs working and earning. Sync licensing is where they can look to get large sums of money rolling in quickly. 

This is, however, heavily skewing the market rates that are being offered (and being demanded). 

“If you look at the various companies who are purchasing iconic catalogs, they’re buying them at such inflated multiples that we’re seeing these songs priced at a premium,” argues Schwartz. “In most cases it will take years for them to recoup their investment and pay off their investors, so I wouldn’t expect to see much of a break in their fees.”

“If you look at the various companies who are purchasing iconic catalogs, they’re buying them at such inflated multiples that we’re seeing these songs priced at a premium.”

– Susan Schwartz, Get Music

She does add, however, that the fees paid for music use in branded social media content on platforms like TikTok and Instagram are reducing. “[They] have been coming down across the board as rightsholders become more comfortable with them and are seeing that most of them have a limited shelf life even if the branded videos are posted in perpetuity,” she says. 

US-based music lawyer Erin M. Jacobson says the long-established parts of the sync business remain steadfastly the same but in the newer parts is where the interesting shifts are happening.

“Sync has always been largely determined by the music being used, the parameters of the use, who is using it, what it is being used for, audience reach, budget et cetera,” she says. “That part hasn’t changed. What has evolved is that many companies are including non-traditional sync uses, like podcasts, as part of the sync licensing department – even if the podcasts are audio-only – and there is more activity in limited, internet and/or social media licensing. Because many online platforms are not licensed, many licenses also contain more restrictions regarding use with certain platforms. In addition, some companies are trying to make additional money in the micro-licensing world.”

As production budgets for music get squeezed in some instances, TV studios, film studios and brands are increasingly reaching for library music. This can allow them to plug some of the sonic gaps that their budget would not necessarily cover if they were negotiating with traditional labels and publishers.

“What has evolved is that many companies are including non-traditional sync uses, like podcasts, as part of the sync licensing department – even if the podcasts are audio-only – and there is more activity in limited, internet and/or social media licensing.”

– Erin M. Jacobson, US music lawyer

A recent report, commissioned by the Production Music Association (PMA), claimed that “more than 46% of all music played on top broadcast and cable television networks is production music”. 

Of course, a body representing production music companies is not going to publish research that makes it look like the importance and influence of production music is waning. Even so, discussions with music supervisors suggest the rise in quality here in recent years means production music is no longer seen as “inferior” to commercially released music. 

“The report, which looked at 47 high-rating TV channels identified by the Production Music Association over the period of February 11 – March 14, 2022, showed that production music was used 6.5 times more than commercial music on those networks during this period,” says the PMA. “It notes that production music gets its highest usage on lifestyle, documentary and reality TV channels, which may not have the same kinds of budgets as bigger media outlets and the heavyweights of the streaming world.”

When a request for a particular, often heavyweight, song risks breaking the budget, music supervisors can push for second-tier songs that fit the creative brief but which come with much smaller fees.

At times, certain songs are pricing themselves out of the market as they play brinkmanship in negotiations; but this is creating a whole new side opportunity for other, less obvious, songs. 

Connie Farr, founder of music supervision company ThinkSync, told The Guardian earlier this year that Rocks, the film she was music supervisor for, had originally wanted ‘God’s Plan’ by Drake but could not afford it. She was able to successfully pitch ‘Picture Perfect’ by Little Simz as an alternative. 

“They’ll often go with the hidden gem because it’s unique,” she said. “I’m always trying to look for those catalogs, the ones that aren’t going to be astronomical.”

Streamers are increasingly seen as the ones with the deepest pockets

Off the record conversations with film production companies suggest they are massively de-prioritizing “traditional” broadcasters and instead pitching their shows to the streaming giants. 

“We’d rarely take a show to the BBC as they never have big budgets,” said one such producer who makes music documentaries and films that rely heavily on music. “We take them straight to the streamers as they have the budgets to clear most of the music we need.” 

Farr made a similar point when speaking to The Guardian, discussing the fees that rightsholders have in mind here when approached to license their music. 

“The likes of Amazon and Netflix made a lot of money during the pandemic and I feel like the dynamic has changed a little bit, with the rightsholders going, ‘Right, you can afford to pay a proper fee for this,’” she said. “Even if the show has not been picked up by Netflix yet, the rights holders are still quoting with that in mind.”

Jacobson believes that budgets are generally staying consistent with industry expectations, with big names and big platforms working with the biggest budgets, but still plenty of activity beyond this top 1%.

“Larger productions or networks have larger budgets and more to spend on music, whereas there are still smaller budgets for independent documentaries, and YouTube and social media uses,” she says, “Serious licensees understand they will pay five-to-six figures for a famous work, but there are still many per-song budgets in the four-figure range.”

Dogmatism has to give way to the pragmatism of collaboration 

The point Farr makes may just be a temporary effect of the pandemic, especially given that many productions were put on hold in 2020 as film sets were closed for long periods of time depending on the lockdown rules in different countries. Rightsholders were obviously keen to make up for lost money during this time but things may stabilize soon.

Schwartz says that a more pragmatic approach and attitude has entered the industry in recent years as wariness and caution around extending sync use to new platforms has started to subside and rightsholders get to grips about multi-platform usage of their music. 

“When I was at a major publisher, we’d usually enter new media deals cautiously,” she states. “Initially we’d try to limit the use to a certain time period so we could observe the new media’s growth, reach et cetera – and if we needed to adjust fees over time to encourage uses, we did.”

“When new media uses do arise, it’s important for rightsholders not to be dogmatic in their approach, which could scare away brands and producers, and instead work in true partnership in order to help successfully grow a new revenue stream.”

– Susan Schwartz, Get Music 

She adds, “When new media uses do arise, it’s important for rightsholders not to be dogmatic in their approach, which could scare away brands and producers, and instead work in true partnership in order to help successfully grow a new revenue stream.”

Artists have the power to boost as much as they have to veto

Some writers and musicians will never let their music be used in a sync for a commercial project. This could be for ethical reasons or over fears that having their music used in an ad could reflect badly on them. Like Coldplay or Michael Stipe, they might make exceptions for a charity, but such syncs are used sparingly.

It is never a matter of money for these acts, although sometimes a company will offer fees so huge that even hold-out acts like The Beatles capitulate. 

Some songwriters and musicians have policies to never let their music be used to sell cars or meat because of their own personal principles while others, like the Miles Davis estate, will not allow their music to be used in scenes depicting violence or drug use. 

Waving checks around will not change their mind so it all becomes hypothetical about what fees they could command and what impact their involvement might have. 

On the flip of this, however, is the direct involvement of the artist which can affect not just the fee but also the wider impact of the sync. 

“Whether or not the artist is involved with the production, has a relationship with someone who is, or is just a huge fan of the show can affect pricing,” suggests Goldstein. “If the proposed use relates in a significant way to the song, that also makes a difference.”

The demand cycle shifts 

Sync teams at labels and publishers can lobby to shine a new light on forgotten songs, genres and eras. Equally, however, these songs, genres and eras can fall in and out of fashion. Something that was in demand a decade ago (and commanding high prices as a result) might be sniffed at today and attract a mere fraction of the fees it used to.

This can be down to wider cultural trends or it can be a sign of a new generation taking over in the film and TV world where they have very different frames of reference and musical preference to the generation above them. 

“There are timeless and quintessential songs that maintain their value over many decades, but there are also trends in repertoire that rotate in and out of popularity in the sync world,” says Goldstein. “There are cycles where certain sounds and genres can become very trendy.”

This is something Farr raised in The Guardian, noting that whole decades will go in and out of fashion – and fees will fall and rise in accordance.

“A lot of the scripts I get now are looking for music from the 1980s, reflecting the age of the directors,” she said. “I know it’s going to be so expensive to clear.”

Value and worth in the sync world, as in wider culture, comes in waves. 

New platforms, new rules 

As mentioned above, a platform like TikTok can be a hugely powerful factor that gives a sync genuine viral propulsion, not so much fanning the flames of interest as acting as an accelerant. 

“There are a number of factors that can affect how songs are negotiated,” says Goldstein. “A song trending on TikTok could suddenly find its way into a number of sync placements or a song can become ubiquitous with the right creative use and placement.”

Social media use of music in a campaign is something that is negotiated in terms of clauses, where extra fees are added if the brand wants to use it in their social media marketing. 

UGC use, however, is the real wildcard here and can propel an existing use even further (this was absolutely critical in the Kate Bush/Stranger Things example). As such, it is impossible to predict or control. At best, it can only be slipstreamed. 

Social media and UGC are, for the most part, becoming normalized in this world, but the next leap(s) forward are less certain. There is huge interest in new areas of exploitation, from the metaverse to Web3, but there is still some uncertainty about how to license for sync here and what sort of fees can be expected. 

“The metaverse is a space that will probably have a lot of music involved,” says Schwartz. “For now, though, most brands are still trying to figure out how to utilize the environment because Gen Z doesn’t understand it and isn’t really engaging at this point yet.”

Goldstein lays out the tension between the opportunities here and the (for now, at least) licensing uncertainties.

“We are constantly adapting to new technology and requests we receive for new media. There is a need for a lot more information about the potential media and understanding the role that music plays within that media in order to negotiate effectively.”

– Megan Goldstein, BMG

“We are constantly adapting to new technology and requests we receive for new media,” she says. “There is a need for a lot more information about the potential media and understanding the role that music plays within that media in order to negotiate effectively. In recent years, we’ve been faced with new licensing challenges including NFTs, influencer campaigns, and the metaverse (among many others). Each comes with a completely new approach on how a song can be synched compared to more traditional usages.”

She adds, “It is a collaborative effort among different departments to learn the mechanisms of each so that we can properly license the use as well as understand the value that music can have in these instances. In-depth research and comparative analysis help ensure quoting is fair and precise for our artists and writers.”

Jacobson, however, says there is still hesitancy – or cynicism – around things like NFTs within the rightsholder community, making this still feel like a market of “if” rather than “when” for sync.

“NFTs still are too new of a use to provide industry-wide trends,” she says. “They may be lucrative for some rightsowners, but not for many as of yet. NFTs also can only be released by or with permission from the rightsowners, and there are a lot of parameters and pitfalls that must be anticipated when licensing for an NFT use. In regard to some of those considerations, many rightsowners are still choosing not to release NFTs.”