The Licensors - Industry Overview

Brandweek, Oct 26, 1998 by Don Jeffrey

Who's Who On The Sound Front

The licensing and packaging of songs for use in compilation albums, branded-premium recordings, television, films and commercials is a business estimated at between $750 million and $1 billion annually. The biggest players are the special-products divisions of the major record companies. Listed below is a profile on each division, with some information on their activities in these areas.

BMG Special Products

This unit handles the licensing and branding projects for all 8MG-owned and affiliated labels except Arista Records, which does its own programs. Some of the labels whose masters it has access to are RCA and Windham Hill, and some of its artists are Elvis Presley, the Chieftains and the Dave Mathews Band.

BMG has done branded premiums for such clients as Starbucks, Coca Cola, Shell Oil, Kellogg's, Toyota and Tru Value. For the latter company, BMG manufactured a Christmas CD, which the retailer gave away with a purchase.

BMG also operates the BMG Marketing Group, which represents all of the company's musical assets and packages them in cooperative marketing programs with companies like Visa USA and AT&T The unit is headed by Kevin Conroy, senior VP, marketing, BMG Entertainment Worldwide, and also includes Bill Wilson, VP of marketing, and Scott Richman, senior director. The minimum order for BMG licensing is generally 25,000 units. Mail-order sales, for clients such as Reader's Digest and Time-Life, are a substantial part of the business.

There are 33 people in the New York-based special-products unit, headed by Gary Newman, senior VP/GM. Working with Newman are Mike Mjehovich, VP of sales; Derek Ferguson, VP of finance; Felicia Gearhart, VP of business affairs; and Ed Osborne, executive producer.

EMI-Capitol Music Special Markets

This Los Angeles-based unit of EMI Music represents the catalogs of labels such as Capitol, Virgin, Blue Note, Narada, Priority, Real World, EMI Classics, Angel and Capitol Nashville. Artists on those labels include the Beatles, the Beach Boys, Janet Jackson and Garth Brooks.

The special-markets unit assembles premiums for consumer companies; reissues for labels like Razor & Tie and Collectors' Choice; budget releases on its own imprint, The Right Stuff; direct sales by mail order; and synchronization for TV, film and commercials.

This unit released 730 recordings last year and expects to put out nearly 800 this year.

It has done premiums for Planet Hollywood's gift shops and for Coca Cola's new Surge cola (mailings were done to 600,000 college students), as well as the Pottery 8am. For the latter, EMI created a compilation called "Dinner At Eight" (music to dine by), which features jazz vocalists and sold more than 130,000 units in the retailer's stores.

Initial minimum orders are usually 25,000. Fees depend upon the number of units and tracks and the artists involved.

Eli Okun (pictured) is president of the unit, which employs about 65 people. Oilier executives include Roy Gattinella, VP of sales and marketing; Adam Varon, VP of business affairs; Eddie Lambert, director of synch licensing; and Bob Hyde director of A&R

PolyMedia

This unit of PolyGram comprises catalog development special markets and a TV-compilations business.

PolyMedia has done promotions for such clients as Banana Republic, Mercedes-Benz and Kellogg's. For the latter, it manufactured four different compilations--$4.99 eight-track samplers--which are promoted on cereal boxes and advertised on TV.

PolyGram TV, the newest unit, has sold 3.6 million units of 14 titles--including the "Pure Disco" series--at full retail price in a little over a year

PolyMedia has access to the catalogs of such labels as Mercury, Mercury Nashville, Island, A&M, Motown, Def Jam, Verve, London, Philips, Deutsche Grammophon and Polydor--which cumulatively control masters by such acts as U2, Sheryl Crow, Hanson and Bon Jovi.

John Esposito (pictured) heads the 39person group as senior VP Also in the unit are Mitchell Imber, VP of special markets; Bob Mercer, VP of PolyGram TV; and Bill Levenson, senior VP of A&R and catalog development

Synch licensing and soundtracks are handled by other units. Robin Kaye, VP of PolyGram Film and TV Music, is in charge of licensing masters, while Joan Schulman is VP of administration and licensing, film, TV, commercials and sampling for PolyGram Publishing.

Sony Music Special Products

The unit, based in New York, handles licensing and premiums for Sony-owned labels like Columbia, Epic, 550 Music, Sony Classics and The Work Group.

About 50 people work under the direction of Harold Fein (pictured), executive VP/GM.

The division has done premiums for such companies as Blockbuster, Taco Bell, Shell Oil and Ocean Spray.

Special Products handles branded premiums, budget releases sold to nontraditional outlets (like drugstores and truck stops), sales to catalog houses (like Reader's Digest) and TV marketers like Time-Life, and the educational markets.

The top executives include Richard Chechilo, senior VP of sales; Linda Novak, VP of business affairs; Dan Rivard, senior director of A&R; and Dean Broadhead, VP of finance and strategic planning. Synch licensing is handled by other departments at Sony. Kathe Malta is VP/creative executive of advertising and new-media music licensing, and Paula Erickson is VP of film and TV licensing.