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Can Video Game Composers Get Royalties?

June 16, 2019

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Can Video Game Composers Get Royalties?

 

Do Game Composers Get Royalties for Video Game Music

 

A question that comes up rather frequently is:

 

How do I get royalties on music I compose for a video game?

 

The meaning of the word “royalties” is anything but precise. Sometimes “royalties” means a piece of overall game profits (“Back end”). Sometimes, it’s an extra payment for every copy of the game sold.

 

However, when a composer asks “do composers get royalties from game music” they usually mean:

 

“Do composers receive public performance payments from their PRO for music they have composed for a game like they do if they have composed for a film or TV show?”

 

And that’s the question we will consider for this article.

 

The short answer to that question is “no.” 

 

TL;DR Version

  • It’s best to assume that any money you make from a game will be limited to whatever fee you negotiate with the developer, although you may receive some royalties  for PlayStation downloads only to some EU countries

  • Try to make your Work for Hire contract allow you collect PRO payments, should they occur or license your music to the game developer

  • Contact your PRO to ask them the best way to register your music for the game. If you have composed for a game available on Playstation in the EU,You may be entitiled to PRO payments on game downloades to certain EU countries

  • Game music is used occasionally in more traditional media. In that case, you may be eligible for PRO payments from those uses

  • The game industry, copyright laws, PRO’s, platforms and technology companies haven’t properly sorted all this out

 

Long Version

 

The normal act of a user purchasing and playing a video game will not lead to any performance payments for the composer of the music for that game. So you should make sure your up-front fee reflects the full value of your work, effort and the creativity you bring to the project, since that is likely all the money you will receive.

 

How can that be? Aren’t composers entitled to their “writers share” from their Performing Rights Organizations (PRO, such as ASCAP, BMI, PRS, etc.?). Seems pretty straightforward, right? Isn’t that the law?

 

Above, I said that the short answer is ‘no.’ A more precise answer is  “…it’s complicated…”

 

We’ll try to go through some of these complications below.

 

First, a quick refresher on Performing Rights Payments:

 

There are several rights associated with composing and recording music. One of these is called the “performance right.” As the name implies, this is a right to control (i.e. get paid for) when a piece of music is performed publicly. “Performance” means more than concerts, though. The music of a movie is ‘performed’ when the movie is broadcast on HBO or streamed on Netflix as well.

 

When a composer writes a score for a TV or film, they will typically make money in 2 ways.


$$ 1) They are paid by the producer commissioning music for the show/film. That’s a straightforward exchange of music for money.


$$ 2) Whenever the TV show or film is ‘publicly performed,” they can receive additional payments.  This is typically done via a Performing Rights Organization (PRO) such as ASCAP, BMI or SESAC and analogous international organizations such as PRS or GEMA.

 

This additional money comes from the broadcasters (HBO, ABC-TV, Netflix, Marriott, Delta Airlines, Your Local Bar, etc.) and is paid to the PRO, which in turn pays the composers and music publishers 50/50. For many composers, these PRO payments constitute the bulk of the money they receive for their work on a show. In fact, many TV shows and films pay quite small fees ($$1) , on the expectation that the composer will receive the bulk of their income from performance royalties ($$2).


As noted above, when a composer asks about royalties for their music, they are usually referring to $$2).  

 

The business of composing for games is quite different

 

When composing for video games, just like the film/TV composer, the game composer will generally receive a one-time fee ($$1) for their music  from the game producer. That again is a straightforward exchange of music for money. However, for the majority of games, that’s where it ends. You will recieve NO performance royalty payments; you won’t receive any more money for your work on the game.

 

That’s because, in the normal course of someone purchasing and playing a video game, there is no ‘public performance’ occurring. For most games, there is nothing analogous to an HBO broadcast or Netflix stream. Because there is no public performance, no performance royalties are paid out to PROs. Therefore, composers don’t receive performance royalties. So if you compose for an iPhone, PC or Xbox, etc game, your up front fee will probably be all the money your receive for that project.

 

But what about online games or games downloaded from the internet? Isn’t a game being downloaded on the internet and played the same as someone watching a show on Netflix on the internet, which does provide a composer royalty? What gives?

 

Unfortunately, no. That exact issue made it all the way up to the US Court of Appeals in 2010 in US v ASCAP.  ASCAP argued that a download was analogous to streaming, which everyone had previously agreed meets the definition of public performance.

 

ASCAP lost. In that ruling, the judges stated:

 

“…we affirm…that a download of a musical work does not constitute a public performance of that work”

 

With that ruling, video game downloads became ineligible for performance royalty payments (in the US….more on that later..)

 

Purchasing a disk at the store and popping it into your Playstation is not a public performance any more than buying and watching a DVD is. And since the court ruled that a downloading a game isn’t either, there are no PRO payments to be had when a typical consumer plays a typical game on their PC, Xbox, iPhone, Tablet, Android or just about any other game platform

 

So if you don’t get any performance royalties from the game you worked on, it isn’t because game developers are sinister… or cheating you… or keeping performance royalties for themselves. It’s because there were no ‘performances’ -- in the legal sense of the word-- of your music, so there were no performance royalties accrued.

 

However.....

 

Just because music for game usually won’t generate any performance royalties doesn’t mean that game music never generates them. There are many cases where composing game music can lead to public performance royalty payments. The most common cases where game music would generate PRO payments are:

 

  • The game’s music appears in more traditional media.  This can be everything from a TV character playing a video game onscreen to a marching band playing an arrangement of a famous game score at halftime on a TV sports network.

  • The gameplay itself is broadcast via some means such as an esports match broadcast on tv or over a streaming viewing service such as Twitch

  • The game’s soundtrack is played on streaming services such as Spotify or YouTube.

  • The game’s music is covered by another artist

  • The game’s music is played during a concert

 

Although somewhat unusual for most games, these definitely occur, and when they do, they can mean big money for the composer. I've been fortunate enough to have music I've composed for games covered by The Pixies, as well as appearing in motion pictures. So don't discount the possibility! 

 

Except for one wrinkle..

 

The majority of game music is written under a Work for Hire contract. Under a typical WFH contract, the game developer completely owns all rights to the music, including performing rights. That means that even if the game were to appear in a TV broadcast, the composer might not able to collect their Performing Rights royalties, unless is were explicitly stated in the contract that they are allowed to do so.

 

good video game music contract, even though a Work for Hire, will contain a clause that allows the composer to collect performance royalties from their PRO.  Such a clause may look like this:

 

"In addition, and notwithstanding the above provisions, Composer shall also be entitled to receive the one hundred percent (100%) of the writer’s share derived from the exploitation of any and all performance rights that may exist in any scores and/or music, including any and all sums that may be collected from any public performing rights organization, union and/or guild in regard to such rights."

 

If your contract has a clause like the above, and your game’s music ends up in a movie or TV show, or covered and released, then you will be entitled to your share of performance royalty payments.

 

Some game companies are quite savvy about music rights and the music industry and are happy to have such a clause in your contract. Other game companies may outright refuse to do so. One thing to grease the wheel with the game devloper/publisher is to point out that by adding that clause, they will be entitled to receive the publisher's share of performance royalties.

 

An important note: the clause above is important only if you composed the music as a Work for Hire or otherwise transferred your rights. If you instead licensed the music to the game developer, you are fully entitled to any and all performance royalties. (the differences between licensing and work for hire are beyond the scope of this article).

 

Still with me?  Then there’s Playstation EU

 

Remember when I said that a download is not a performance, and therefore not entitled to performance payments. Well, although that’s true in the United States, in many EU countries, things are different. There, laws specifically say that digital downloads (for example the downloading of music that is part of a game) is, in part, a public performance.

 

Largely because of that distinction, a few years ago, Sony entered into an agreement with PRS (UK’s leading Performing Rights Organization). When games are sold on the EU Playstation Network, to certain EU customers, a performance payment is made to PRS. PRS then distributes the money to the composer and music publisher accordingly or to their international counterparts such as ASCAP, etc.. For extremely successful games, those checks can reach 6-figures.

 

However, as of this writing, this is limited to PlayStation games in the EU; no such deal exists for Xbox, iPhone, Android, Nintendo or any other game platforms.

 

But, if you have composed music for a game available on the PlayStation network in the EU, and you have the rights to performance payments for that music, you should register your music with your local PRO (eg ASCAP, BMI), which can get that money for you via a reciprocal arrangement different international PRO’s have with each other.

 

If a game you have composed for is available on the Playstation Network in Europe, contact your PRO to determine how to best register the music with them. This will ensure that you receive any EU Playstation Network PRO payments you are entitled to.

 

Not complicated enough?.... Welcome to game streaming

 

At the top of this article, I said that in the normal course of playing a video game, since there is no public performance occurring, there are no public performance royalties to collect. That is currently the case…. most of the time….

 

In March 2019, Google announced a new game streaming service called Stadia.  With Stadia, and similar technologies such as Playstation Now (formerly Gaikai), and Microsoft’s game streaming service, games are being run in the cloud and their visuals and sound streamed live to players as they play them. Since the games visuals and sound are being rendered in the cloud and streamed live, it would seem that would be considered ‘public performances’, exactly analogous to Spotify or Netflix streaming down audio/visual content.  Some believe this is the future of video gaming—huge cloud-based “game servers” streaming live gameplay to gamers.

 

These services are relatively new, so it remains to be seen how they will impact performance royalties for composers. It could be a complete game-changer.

 

…and YouTube

 

Although beyond the scope of this article, YouTube is clearly a place where music streaming occurs, and we have seen that streaming is considered a public performance, even in the US. Many millions are paid out on hundreds of billioins of views. YouTube is littered with ‘playthroughs’ of video games, often called Let’s play videos, some of which have tens of millions of views. So it would seem that one way to collect royalties game music is to register the music with YouTube (you do this through the “YouTube ContentID System”), and collect from these millions of views


There are two problems with this:


1) As noted above, most video game music is composed under a Work for Hire. You can only register your music with YouTube (using its ContentID system), if you are the owner of the music.
2) Even if you own the music outright, YouTube has an explicit policy on video game soundtracks. You may not register music with YouTube’s ContentID system for a video game soundtrack unless you are the publisher of the video game itself, even if you own the music and the game publisher does not. If this seems bizarre and even outrageous to you, you’re not alone, but that’s the current state of affairs.

 

Here are YouTube's guidelines regarding video game soundtracks:

Further complicating matters is that the last thing the maker of a "lets Play" video wants is to have all the music in the game they are reviewing trigger revenue-sharing of their play-through video. And the game publisher--thrilled to have their game covered by a popular YouTuber-- doesn't want to annoy the YouTuber. So although a composer may be technically within their rights to demand a share of ad revenue for a Lets Play video, doing so may damage the relationship with the game developer, perhaps  irreparably.

 

So it could easily be the case that a composer gets zero royalties for music they own that is part of a "let's play" video that gets tens of millions of views.

 

Because  of the complexity of YouTube, video games and music, many YouTubers create their Lets Play videos with the music turned off.  They just don't want to have to deal with music + video games + YouTube issues.

 

So as I said at the beginning … “…It’s complicated…”  And we're not quite done yet...

 

A coming storm?...

 

Copyright laws, Performing Rights Organizations, tech companies and game companies haven’t all caught up with each other regarding music.PRO's and games. New laws regarding copyright  such as “Article 13” in the EU may have a large impact on music for games. And some of the PRO’s are actively looking at games, including streaming platforms like Stadia, Twitch and other game streaming services.

 

Some of these laws and changes in technology have some game developers/publishers extremely nervous. So much that some are starting to be wary of PROs and have adjusted their business practices.

 

I have first-hand experience in the last 12 months with a European game company refusing to use music created by a US freelance composer who belonged to a PRO. The composer was hired, the music was written and the composer was paid.  But the company, upon discovering the composer belonged to a PRO opted not to use the music in their game.  That company has since implemented a policy that all music for their games would be created by salaried employees of their company, and have switched to hiring on-staff composers as employees to write their music from here on instead of using freelance composers.

 

Summary


The many issues surrounding performance royalties and video game are complex and changing. Game streaming, esports broadcasts and contracts with the EU and Playstation mean that there many be many cases where composing the score for a video game can result in performance royalties of some sort, particularly for more successful games on the major game platforms.

 

The landscape is changing quickly, and there are many issues that simply haven't been worked out. But it is best to ensure that your game music contracts reflect potential changes coming in the industry.

 

However, in the general case of a consumer purchasing a game and playing it, more often than not, no performance royalties are due. You should negotiate your game music composition contracts assuming that the original fee is the only money you will make from the game.

 

 

 

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