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