A question that a lot of people have is this. What are the best uses for royalty free music (RFM)? You would be surprised at all the things that RFM is used for. But where do you get the best bang for the buck? After all, in most cases you’re paying a fee that is slightly higher than if you were to pay a royalty for each use per use itself.

For example, if you only need to use a piece of music five times and only have to pay $20 for each use, that’s still cheaper than buying a piece outright that’s going to cost you $1,000. In this case, you’ve spent $900 more than you had to. Now, if you need to use that piece of music 10,000 times then yes, you’re better off paying the one time license fee for RFM and be done with it.

So to answer the question of what the best uses are, one has to look at the various uses for RFM to see where you are likely to make out better with an outright purchase than having to pay per use.

One of the best uses for RFM is when you’re creating a product that is going to be sold or distributed in bulk.

For example, I myself am planning on putting together a CD with a collection of original songs targeted to a certain sub niche of the dieting niche. If this CD sells a lot of copies and this music was not original but licensed with the requirement to pay a royalty fee for each song on the CD and for each sale of that CD, imagine how the costs would add up if the CD contained 10 songs at $1 royalty for each song. That’s $10 per CD. If you’re selling your CD for $19.95 that means for each sale you’re losing more than half your profit to royalty fees.

Imagine you sell 1 million copies. That comes out to $19,950,000 in sales and $10,000,000 in royalty payments.

Now imagine you purchased royalty free music and each song cost you (I’ll go crazy on this one) $10,000. That comes out to a total cost of $100,000 for the 10 songs. So instead of your net profit being $9,950,000, it’s $19,850,000 because you opted for a one time license purchase rather than pay a royalty for each song.

Sure, you’re not going to pay $100,000 for 10 songs unless you are pretty darn sure that you’re going to make your investment back. Naturally, if you are unsure then maybe paying the royalties is the way to go even if it means a lower net profit at the end of the day. The upside is, if the CD is a loser you don’t really lose any money on the purchase costs of the music. If you sell no CDs you pay no fee.

This is why it is critical that before you even decide on what music to purchase and how to do so, you have a pretty darn good idea of what you expect your CD to do in the marketplace. Naturally, your best bet is to write and produce your own music. But if this isn’t an option then licensing music is your only other alternative.

Another great use for royalty free music is if you’re doing some kind of theatrical production. If you know anything about the theater you know that it’s very unpredictable. A show could be a huge hit or close after one night. If, however, you know how long your show is going to run, you can calculate how much you can spend on royalty free music in order to make a profit.

Let’s say you’re producing a musical and there are going to be 12 tunes in the show. Each tune, if bought outright will only cost you $20. That comes out to a total cost of $240. Now, if the show closes in one night and you only sold 10 tickets, yeah, you’ve taken a bit of a loss on this.

But what if you know that you’re show is going to run for a year. It’s an iron clad contract with the theater. Do you really want to be spending even $1 per song for each performance? After a year, that $1 per song ($12 per night) is going to come out to over $400 if you’re doing one performance per night.

And what happens if you decide to make a CD out of one of the performances and sell that? With royalty free music there is no additional cost over the $240. With music you have to pay a royalty for you are now paying an additional $12 for each CD sold.

Again, volume is going to be a big deciding factor on which direction you’re going to go in.

What if you’re making a movie and you need a title theme? Let’s say the main title theme is 3 minutes. In most cases, this is going to cost you $300. That might seem like a lot of money compared to that same 3 minute tune that you might have to only pay $1 for each time the movie is shown.

But what if this movie ends up as a huge hit and is shown all over the world? Hey, it can happen. Dream big. Would you rather pay a one time $300 cost or pay $1 for each movie theater that show the film, for each TV broadcast, for each DVD sold, for each…well, I think you get the picture.

And therein lies the key word…picture. Or should I say, big picture. You need to look at the big picture. You need to always ask yourself. Where will I be spending more money if this venture is as successful as it can be? Can I afford to go the royalty free route if the project is a bust?

The more sure you are that your project is going to succeed, or success or failure isn’t part of the equation, the more it makes sense to purchase royalty free music IF the number of uses of that music would total more money spent IF you payed a royalty for each use. And all you need to figure that out is a calculator.

For The Love Of Music,

Steven “Wags” Wagenheim

I’m going to cover quite a bit in this article so pour yourself a cup of java (or whatever brew gets you going) and pull up a seat.

Let’s start with what royalty free music is because a lot of people have some pretty wild misconceptions about its definition.

In spite of what a lot of people think, royalty free music is not free. It’s royalty free and that’s a big difference. So I guess what we have to do is start off with defining exactly what a royalty is.

A royalty is a sum of money that is paid to the creator of some piece of work (could be just about anything) for each use of that piece of work.

So for example, let’s say Jim Smith wrote a poem and had it copyrighted and Sally Jane Ayres wanted to use that poem as an opening for a play that she had written. Sally would have to pay Jim whatever fee was agreed on EACH time that play was performed and each time that poem was read.

Let’s assume this play was on Broadway and was performed daily 365 days a year. And let’s assume that each time the poem was read (once per performance) Sally had to pay Jim $10. Over the course of the entire year, that would come up to $3,650 in royalty fees.

That’s a nice little sum a money.

Now, what it Jim made his poem royalty free? Does that mean that he gives Sally the poem for free? No, of course not. What it means is that he licenses the poem to Sally for a one time fee, say $25. After Sally pays the one time fee, she can then read that poem as often as she likes without having to pay any additional monies to Jim.

That is essentially what royalty free is. It’s a one time charge to allow someone unlimited use of a piece of work for no additional fees.

So royalty free music is music that is written for the express purpose of charging a one time fee to whoever purchases a license for it. In return, that person can use this music as often as they like for whatever project they need it for.

Now, it’s important that you understand that because this music is licensed, that essentially means that the creator of the music can license it to as many people as he likes.

Turn on the TV sometime and you might notice music that you hear on more than one show. Now more likely than not, especially if it’s well known music, this music is not royalty free. A fee is paid for each use. I mean you really don’t think “Eye Of The Tiger” comes with royalty free rights. I picked that song because I think it’s appeared in more movies and TV shows than just about anything else I can think of.

But the principle is the same. More than one person can purchase rights to use a piece of music, royalty free or not. My point is, your purchase of a royalty free piece of music doesn’t mean that you’re the only person who can use it. Don’t confuse a royalty free license with an exclusive license. They are not one and the same.

Take this site for example. There are currently over 5,000 tracks on it available for license for a one time fee (between 99 cents and $2,99). As many people as I allow (I may take a track down if it’s being licensed too much) can purchase these tracks and use for their projects. That is essentially how a royalty free music creator earns their living, through volume, since the licensing fee is usually so small in comparison to a non royalty fee. And again, this will depend on how often the piece of music is going to be used.

So let’s do some math. Let’s say you wanted to license “Eye Of The Tiger” for a one time use and the royalty payment for that one time use is $20. That’s not too bad. But what if you needed to use that song 100 times throughout the course of the year? Now you’re running into a bit of money depending on your budget. I don’t know about you but I don’t have 2 grand laying around to hear that song 100 times. This is why royalty free music is so valuable to so many people.

Okay, so why DO you need it? After all, you have other options available to you. You can license music with royalties or you can hire a composer to create a piece of music just for you.

In some cases, especially if the music is for a one time use, paying the royalty can be cheaper than getting royalty free music. Seldom, however, will having someone compose a custom score for you be less expensive. My custom scores essentially go for about $100 per minute of music. That’s not exactly chump change.

So I guess the question comes down to this. How can you tell if royalty free music is your best option?

To answer this, you need to do a bit of math but not much.

Take the project that you’re working on and analyze it. How much music do you need for it in minutes? How often will this music be performed, broadcast, distributed, sold, and so on?

After you’ve done that, you need to look at how much it’s going to cost to license music where you need to pay a royalty for each use. The base cost may be lower than the cost for royalty free music but if how often you’ll be performing this music is considerable, you will probably end up paying more money for the track that has a lower base cost.

Example:

The song “This Is My Royalty Pay Song” costs just 10 cents to license for each use or distribution.

The song “This Is My Royalty Free Song” costs $1,000 to license.

On the surface, it would appear that “This Is My Royalty Pay Song” is the better deal. After all, it only costs 10 cents to license. But that’s 10 cents for each use.

What is this was something you were going to distribute in a workout CD set and that CD sold 1 million copies? You would have to pay that 10 cents for each copy sold. That comes out to a royalty fee of (hold onto your cookies) $100,000.

Now imagine you purchased my custom royalty free track for $1,000 and used it for that same workout CD.

You just saved yourself $99,000.

Too many people look at the base cost of a song’s license fee and base their decision on that. They then end up spending more money because of the use factor.

Yes, those pennies add up.

This is why, if you do an Internet search, royalty free music is in such demand. Those who understand how this system works realize how cheap royalty free music is in the long run. Again, this will depend on how much you intend to use it.

After reading this, you might decide that royalty free music is not something that you need. But at least you’re now informed and understand the difference between royalty and royalty free.

Knowing the difference can make a HUGE difference in YOUR bottom line.

For The Love Of Music,

Steven “Wags” Wagenheim