MFN Case Study: Another good question from a reader.

So a few days back a music supervisor wrote in with a good question: last year he'd worked on an independently produced documentary for which he negotiated festival rights. Now the filmmakers want to produce a DVD.

He has five songs to re-license and lucky for him, one of the big uber-mega publishers gave him the "crazy low" rate of 2k for an "All Media/Perpetuity/World’ buy-out license. He went to two other publishers with this and they fell in line with the deal. The remaining two songs are well known, and the publishers quoted a price that the filmmakers couldn't afford. As an alternative, the publishers offered a royalty option (a percentage of the profits) instead, and the filmmakers thought the rate was fair.

Only thing is, all the different parties involved want MFN status, but the filmmaker wonders, "How do I grant this when there are two different types of deals in play?"

It's not an issue. The 3 of the 5 publishers that fell in line with the flat fee buy-out rate are in their own MFN category, and the two royalty basis songs are in another. There's no real way to harmonize the two different approaches. For this film, there will be two different MFN categories—one flat fee, one royalty.

Comments

[Dan-O]

Thank you for the education, you actually prompted me to Google MFN and I learned something new! Now your post makes sense, very interesting.

Dan-O
http://www.danosongs.com