The Song Remains The Same

What can John Lewis’ Christmas campaign teach us about Procurement?

The well-orchestrated PR ‘rumours’ were confirmed when John Lewis’ Christmas campaign was launched, sound-tracked by a cover of a classic song – “Half The World Away”, written by Noel Gallagher of Oasis.

On cue, industry pundits considered if the brand’s longstanding music strategy still works, or if consumers will tire of slow, breathy female-vocal renditions of songs whose original versions had more bite. Retail analysts will no doubt pore over John Lewis’ Christmas trading figures in the New Year; this may provide an answer.

The Cost of Music

For the Procurious community, the key issue here is ROI. Will investment in the campaign, of which music is a key part, deliver a quantifiable uplift in profits? It’s a question I’ve asked marketing directors when considering the cost of music recommended by their agencies.

In advance, it’s almost impossible to know – and in hindsight, few brands carry out the post mortem. If you’re in marketing procurement with a remit to support your marketing colleagues, where do you begin?

At a presentation to ISBA members earlier in the year, it was clear that many marketing procurement executives didn’t feel confident to challenge their agencies on music costs. A common concern was:

“I just don’t know which questions to ask”.

Typically agencies present a single figure for music in production estimates with no breakdown or explanation of how the deal was negotiated. Without an understanding of the fragmented nature of music rights, marketing procurement teams are in the dark. So, here’s some light on the issue:

Separate copyright exists in

• The song aka “publishing rights”, and
• The sound recording aka “master rights”.

These are usually controlled by respectively by music publishers and record labels. Brands, or their agencies, are solely responsible for securing approvals and negotiating sync licence fees before any usage takes place in a campaign.

Jargon Alert!

‘Sync’ (short for synchronisation) is the act of dubbing music to moving images.

The sync licence approval chain often leads back to the same people when the songwriter and artist is the same person. Had John Lewis wanted to use the original Oasis recording of “Half The World Away”, the sync licence requests would have been as follows:

1. Song/Publishing Rights via music publisher: SonyATV Music Publishing > Artist Management > Noel Gallagher (songwriter)
2. Sound Recording/Master Rights via record label: Sony Music > Artist Management > Noel & Liam Gallagher (artist: Oasis)

In this instance, Noel Gallagher would receive the sync requests via two avenues, his music publisher and record label.

Value Versus Price

Here’s where value and price come in. Would Noel Gallagher place a greater value on his song or his recording?

In practice, the music industry prices them at parity using Most Favoured Nations (“MFN”) – an upwards-only price equalisation device. “Half The World Away” reached number 3 in the UK single charts in 1994 and became the theme song for BBC sitcom “The Royle Family”. Mr Gallagher would therefore place a very high value on both song and recording.

However, the new John Lewis campaign doesn’t use the original Oasis version. Instead, it follows the established strategy of using an emerging artist to record a new cover version of the song. In this instance it’s a Norwegian singer called Aurora, signed to Universal Music imprint Decca Records. So how does the approval chain look now? The song remains the same, but the recording is different.

1. Song/Publishing Rights via music publisher: SonyATV Music Publishing > Artist Management > Noel Gallagher (songwriter)
2. Sound Recording/Master Rights via record label: Universal Music > Artist Management > Aurora Aksnes (artist name: Aurora)

What does this mean for Procurement?

As we’ve discussed, Noel Gallagher will place significant value on this song. His managers will dictate that his music publisher demands a premium price for the sync licence. Remember that Mr Gallagher didn’t write his song to be used in a commercial, and he doesn’t need the money or profile.

In contrast, the artist Aurora will greatly benefit from the exposure in the John Lewis campaign. For the artist, her manager, and her record label, the value is in the promotional opportunity, not the sound recording. This will be reflected in a much lower-priced sync licence, provided that the record label waives any MFN provision.

Key Learnings

If your agency presents you with a single budget figure for a licensed music track, don’t just accept it, ask these questions:

1. Is it an original artist recording or a cover?
2. If it’s an original artist recording, is the artist also the songwriter?
3. Is the artist proven to be famous?
4. Is the song or songwriter proven to be famous?
5. Which music publisher controls the song? (It can be more than one)
6. If the recording is a cover, is the cover artist famous?
7. How will the cover artist benefit from awareness through the campaign?
8. Can promotional value be traded against sync licence price?
9. Will the record company who controls the cover recording waive MFN?

Whilst these issues are a whole world away from the schmaltzy, perfect Christmas conveyed in the new John Lewis campaign, smart marketing procurement executives can take control of price by better understanding value and the complex music rights landscape.

Although the song remains the same, alternative cover versions can offer cost efficiencies if you know the right questions to ask.

Richard Kirstein is a Founding Partner at Resilient Music, which aims to shed light on the complex landscape of music procurement, and delivers a smarter way for brands and agencies to buy music talent and rights.