Thursday, October 9, 2008

APPLYING THE eBAY MODEL TO MUSIC LICENSING

An Israeli startup hopes to do for music licensing what eBay did for just about everything else. YouLicense is an efficient clearinghouse where artists and copyright holders can license their music to advertisers, videogame developers, filmmakers, photographers, hobbyists and anyone else who wants to pay $20 and up to legally license a song.

"I like to think that we reinvented the model," said YouLicense CEO Maor Ezer. "There's no barrier. I don't tell any indie artist, 'you're not welcome.' Everybody can sign in — that's the big, big, big difference [between us and] all the other companies out there ... on the other side, we have buyers from TV, film, videogames and ads coming in and doing business directly with the content owners."

Since there's no statutory licensing rate for synchronization rights (the use of music with a video), each of these deals must be negotiated individually. That clearly presents challenges on both sides of the licensing equation, so there's plenty of room for YouLicense to increase efficiency in the market the same way eBay did for used goods. And now, a new fee structure threatens to let copyright holders offer far more music for a flat biannual fee.

Artists and other copyright holders can offer their music on YouLicense for free, paying a 9 percent commission fee when their stuff gets licensed. Or, using a new model on the site, they can pay a flat fee of $30 (individuals) or $60 (organizations) to offer an unlimited amount of music through the service in a six-month period, without paying any commissions.

Potential licensees search for suitable music using a number of parameters (above right) or submit requests for specific types of music before it is recorded in the Opportunities section (below right). If they find something that works, they make an offer describing what they want to do with the song and how much they're willing to pay. The owner of the song (sound recording and publishing rights) gets an e-mail alert with a link to the offer and can negotiate, accept or decline directly through the site.

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