Word on the street in Fitzrovia is that the American Federation of Musicians is mad at some UK ad agencies. Their beef is over UK airings of ads with soundtracks on which their members played. Tom Harding asks what could be the problem and what agencies should be doing to ensure they are bomb proof.
Who: The American Federation of Musicians
When: October 2010
Law stated as at: 1 November 2010
Marketinglaw understands that the American Federation of Musicians has recently been sending letters to London advertising agencies requesting royalty payments in respect of the use of tracks in previously broadcast television adverts. We have yet to see a copy of the letters, so cannot comment on the basis or validity of the claims, but assume that the AFM considers it has a valid right of action.
In general terms, an agency will approach the relevant record label and publisher in order to obtain the requisite synch rights to include commercial music in an advert. Where a US recording artist is concerned, in the case of a major this will typically be the UK sister label that will have itself been granted the rights from the affiliated US label.
The AFM's claim may perhaps then be based on the fact that its members had an agreement in place with the US label for US exploitation, but it was silent on non-US exploitation. The subsequent grant of rights to the UK label could therefore have been subject to the payment of any relevant performer royalties due (if any), and this (potential) liability may have therefore been passed down to the licensee agency by the UK label. Ultimately however, this seems to be a contractual issue as any default right for US perfomers to receive royalties from music included in UK adverts seems unclear. Until the letters and claims have been analysed however, Marketinglaw can only speculate here.
In any event, to protect against any potential risk going forward, agencies should always ensure they are granted synch licences free from any additional payment obligations.
Why this matters:
Advertising agencies (and/or their clients) may potentially be liable, or at least the subject of claims, for additional royalty payments in relation to campaigns for which they believed to have fully cleared the rights. As the letters seem to refer to previously broadcast adverts, it is possible that such claims could extend to any campaign broadcast in the last six years.
There is also a view that the AFM may be minded to seek to bring a claim against, or reach settlement with, at least one agency in order to validate its position and highlight the issue to the industry.
Whether this will come to pass remains to be seen but in the meantime agencies in receipt of letters from US music rights organisations will clearly be well advised to take these seriously and consult music law experts.