The Sync Offer With Strings: Perpetuity, Holds and an MFN Clause
An independent artist self-releases a song, is the sole writer and publisher, and is registered with a performing rights organisation as writer and publisher. A music supervisor offers a sync licence for an independent feature: a $1,500 flat fee, perpetual, worldwide, all media now known or hereafter devised, plus a twelve-month hold preventing the song from being licensed anywhere else, and a most-favoured-nations clause referring to 'other artists on the soundtrack.' The supervisor also asks the artist to sign a direct licence covering 'all performance rights through-to-the-audience' so the production 'doesn't have to pay PRO fees.' The film's budget is undisclosed, and the soundtrack includes two label-signed artists. The artist's manager calls $1,500 standard for indie and wants to sign within 48 hours to hit a festival deadline.
1. Identify the three clauses that carry the most risk and explain what each one actually costs the artist.
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1. Perpetual, worldwide, all media. The fee is paid once, but the grant never expires and covers media that do not yet exist. A $1,500 payment for a perpetual grant is only reasonable if the use is limited - background, low visibility, small territory. If the song ends up in a trailer, a streaming cut-down or a sequel, the artist has already been paid and cannot renegotiate. Cost: the entire future licensing value of the composition.
2. The twelve-month hold. A hold costs money even though no money changes hands: for a year the song cannot be placed in advertising, games or other films, and the artist cannot accept a better offer. If the film is never distributed, the artist has lost a year of placements for $1,500. Cost: opportunity cost plus loss of negotiating position.
3. The direct 'through-to-the-audience' performance licence. This is the most serious. The sync fee buys the right to synchronise the music with picture; it does not buy the performance royalties that broadcasters, cinemas and streaming services pay through the PRO. The supervisor is asking the artist to waive those royalties so the production avoids its own licensing costs. Cost: the writer's and publisher's performance income, potentially far exceeding the sync fee over the life of the film.
The MFN clause is a secondary issue and is discussed separately.
2. Draft the counter-terms you would propose, and explain the reasoning behind each change.
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Fee and term. Ask for a higher fee or a limited term - for example ten years, or life of the film's distribution - with the grant restricted to the film and its direct marketing, excluding trailers, sequels, soundtrack albums and merchandise unless separately negotiated. Reasoning: the price should match the scope; a shorter term restores the artist's ability to relicense.
Hold. Reduce the hold to 30–90 days, limited to the film's own use, with an automatic release if the production does not confirm by a stated date. Reasoning: the hold exists to protect the production's decision window, not to remove the song from the market for a year.
Performance rights. Refuse the through-to-the-audience grant outright, or limit it strictly to the film's theatrical exhibition, leaving broadcast and streaming performance licensing to the PRO. Reasoning: the sync fee and performance royalties are separate revenue streams, and PRO blanket licences are how writers are paid for broadcast and streaming.
MFN. Accept it only if it is drafted as 'no less favourable than any other soundtrack artist' and is verifiable, or delete it. Reasoning: an MFN clause benchmarked against an undisclosed pool cannot be checked, and a vague version can be used to justify the lowest deal on the soundtrack rather than to improve the artist's.
Credit and reporting. Require a screen credit and a statement of the film's budget and release plan before signature.
3. The manager argues that $1,500 is standard for an indie film and that the festival deadline makes speed more valuable than negotiation. How do you evaluate that argument, and what information do you need before advising the artist?
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The argument confuses a common outcome with a fair one. Indie sync fees do often sit in the low thousands, but the fee is only one term in the deal, and the clauses attached here - perpetuity, a year-long hold and a performance-rights waiver - are not standard at any price. A deadline is real leverage for the supervisor, not for the artist; once the song is licensed perpetually, the artist cannot recover the lost value by renegotiating later.
Information needed before advising:
- The film's total budget and the music budget line - 'indie' covers everything from $50,000 to $5 million, and the supervisor knows which.
- How the song is used: featured vocal, background source, title sequence, trailer. A featured use is worth several times a background use.
- The distribution plan: festival-only, streaming, theatrical, international. Perpetual worldwide rights are worth little if the film never leaves the festival circuit and a great deal if it is picked up by a streamer.
- What the two label artists are being paid - relevant both to the MFN clause and to the true market rate.
- Whether the artist's PRO registration is complete, so performance royalties will actually be collected.
Practical advice: ask for 48 hours to review, which is almost always granted; return a redline that keeps the fee close to the offer but fixes the term, the hold and the performance carve-out. If the supervisor will not move on any of those, the deadline is being used to buy rights the artist should not sell.