Issues surrounding the treatment of music are new to the games industry. Until recently, hardware did not have the horsepower to support much more than an abbreviated audio component.

As systems have become more powerful, game producers and publishers have discovered what motion picture producers have known for nearly 100 years—artful use of music can deeply enrich the entertainment experience of the final product.

Unlike computer code, graphics, or game play, games music can have an extended afterlife. By adopting the strategy discussed below, or through similar methods, game music can become a stand-alone revenue producer to be shared by publishers and music creators.

Music in games, as in motion pictures, consists of two components. These are licensed incidental soundtrack music, and underscore composed specifically for the project.

Licensed incidental music is master recordings owned primarily by record companies or music producers that finds its way into a game or movie. Using contemporary hit artists and songs can give the game or movie street credibility with its intended audience. Carefully selected "oldies" can call to mind the time and place when they were hits and quickly get an audience into the proper frame of reference. Games, like movies, now use a music supervisor whose job is to identify and source music that will be added to the soundtrack of each game.

Rights to use such music must be licensed from the record company that controls the master recording (performance), and from the music publisher that controls the copyright (music publishing rights) for each composition.

Licensing rights for motion picture use can be a major budget item. Up to now, video game publishers have paid less to secure rights.

Underscore is primarily instrumental or choral music composed specifically for the game. Underscore is music composed to order, on a custom basis, in close consultation with game producers, to fit into the game at pre-determined locations and intervals, designed to elevate and enhance the experience.

Composers typically contract to compose underscore on a work-for-hire basis with the game producer acquiring all rights to the musical copyright and performances embodied in the underscore. This business model borrows heavily from the motion picture industry. Game publishers, like motion picture producers, feel a need to control this asset. The producer of the game (or motion picture) does not want the underscore, music that may come to be closely identified with the project, to show up unexpectedly, for example, in a "Bud Lite" ad.

In controlling all these rights, game publishers treat underscore the same as they treat software code, animation, sound effects, or other game elements. However, in many ways, music is different and deserves special consideration.

Underscore may embody three or more elements or interests delivered by the composer or musical contractor. Using generally prevailing standards for treatment of music in other entertainment industry segments, each can be subject to ongoing compensation for certain uses apart from the game.

These elements are: (1) the underlying musical compositions; (2) the musical performance of the compositions; and (3) the producer of the master recordings that constitute the underscore.

1. the underlying copyrights in musical compositions. Using music publishing business models, composers still sign publishing agreements that assign their copyrights and provided for payment of the "writer's share"— roughly fifty percent of income generated through exploitation of their songs.

Contrast this with business practice in the motion picture industry. When a composer of underscore signs an agreement to deliver music to a movie producer, he or she is customarily paid a fee and assigns (transfers) the copyrights. Movie producers pay for these custom composition services and expect to control the copyrights. However, a movie contract may provide for writer's share in the case of ancillary, non-motion picture-related uses of the music.

When a game music composer assigns the copyright to the game publisher, he or she, in effect, is signing a music publishing contract that contains no "writer's share." Like the movie producer, game publishers justify this by observing that they are "paying for the work and expect to own it." However, game industry contracts typically make no differentiation between the primary use in the game and ancillary uses of music, and deprive the composer of the "writer's share" for ancillary uses.

In the most extreme examples, game companies may also attempt to prevent the composer from receiving the composer's share of public performance royalties that would otherwise be calculated and paid directly to the composer through ASCAP, BMI, or another controlling performing rights society. ASCAP, under no circumstances, will pay the composer's share of public performance income to the music publisher (in this case, the game company).

These days, it is true that public performance income generated from game underscore is miniscule. Most performances of game music take place in the home—where they are private, not public performances! But as games continue to infiltrate mainstream consciousness, performances could increase and income opportunities will increase with them.

2. the musical performance of the compositions embodied on the mp3 or other music files delivered by the composer. In many cases, composers utilize their own recording studios to deliver master recordings that can be integrated into the game. The cost of studio time is included in the "all-in" contract price for the score. In the event that the composer is also the performer, or conductor if an ensemble, orchestra, or chorus is used, the composer should also be recognized (and credited) for his or her artistic work.

If the score or elements of the score were to be licensed for use apart from the game (for example, for release as an audio cd, in commercials, on television, in a motion picture, etc.), the composer as artist should be credited as the performer and receive a competitive royalty. This is based on the model of the recording industry and is carried over in many motion picture underscore agreements.

Great music from games deserves to be heard. It would not sell on its own if it did not stand on its own. The underscore cds from "Halo," "Final Fantasy" and other games have been successful. The performers of that music deserve to be credited, recognized as artists, and paid accordingly.

3. the production of the master recordings. As used in the record industry, the "producer" of a master recording is the person who oversees the production, makes artistic contributions, and takes responsibility for delivering on time and on budget. Using this analysis, the composer may also be the producer of the game underscore.

Record producers typically receive a royalty for sales of audio cds and other use of the masters. The producer of the game score should also receive a producer credit on the game package, and in all further uses of the music.

Fair treatment of composers, performers, and producers is an important step in attracting and retaining the top level talent needed for games music

With only a few exceptions, game publishers have been slow to recognize the economic potential of underscore. By investing the time to develop and exploit this property, publishers could see revenue today, and build a song and master recording catalog that could become an important and valuable asset in the future.

The first step would be to develop a survey of all the original music from all the games owned by the publisher. Each composition could be cataloged by title, composer, and the game in which it appears.

The copyright of each musical composition and master recording could be registered in the office of the Register of Copyrights in the Library of Congress.

The game publisher should affiliate with ASCAP and BMI. In order to do so, it must show it owns musical compositions that are being performed. Use of compositions on an audio cd, or in television advertising for the game, should be sufficient.

Once affiliation has been completed, the games publisher will find itself in the position of a music publisher with a catalog of compositions.

As a music publisher, the agreements it enters into with composers should follow the generally accepted form of "song" agreement or "writer" agreement used by publishers when they acquire a composition or engage a staff writer. Under each such form of agreement, ownership and control of the copyright is transferred to the music publisher— subject to an obligation to pay royalties to the composer under certain circumstances.

Contracts of a sort commonly used today in the games industry, where all rights are transferred by the composer (often as "work for hire") on a flat fee basis, with no ongoing interest, are viewed in the music industry as extremely unfair and associated with the most exploitive or shady operators (as in the character Hesh Rabkin on the Sopranos—see http://www.hbo.com/sopranos/cast/character/hesh_rabkin.shtml).

If the game publisher decides it does not have the interest, means, or staff to manage its catalog of musical copyrights, there are resources available to take on the responsibility.

The Harry Fox Agency, a division of the National Music Publishers Association (www.harryfox.com), can issue mechanical licenses.

Larger music publishers, whose primary business is exploiting copyrights, can make co-publishing or administration deals to manage all phases of exploitation of games music catalogs. Terms of any such deal are subject to negotiation, but frequently include an advance on income to be generated by the catalog.

As games develop recognizable, even popular theme music (think Halo for example), there is no reason that music can't be edited or repurposed into linear tracks and offered for download on iTunes, Napster, or any of the other pay-to-download services that are making strong headway as music's new electronic storefront. Square Enix has already pursued this opportunity, announcing in May 2005 that it would offer up to 16 tracks from Final Fantasy I through XI, Music from Dear Friends, and two Black Mages albums on a dedicated Final Fantasy iTunes page.

At 99 cents per download, and these selections not generally available on commercially distributed audio cd's, game music downloads could prove to be low risk strong earners for game publishers.

And since game publishers already maintain strong internet presence, by creating their own download centers, that 99 cent download does not have to be shared with anyone except (hopefully and, in my opinion anyway, honorably) the composers and artists who created the music!

As the games industry grows, as games are advertised more and more on television, as game properties are licensed to become movies, and as exposure of games increases through electronic media, music and exploitation of music from games can begin to generate meaningful revenue. I believe that any revenue generated from use of music apart from placement in the game for which it was composed, should be shared with the composers and performers.

Jim Charne practices law in Santa Monica, CA ( www.charnelaw.com) where he represents games industry clients. Jim can be reached by email at charne@usa.net.

This article is intended for general educational and entertainment purposes and is not legal advice. Every situation and circumstance is unique. Anyone entering into a contractual relationship should have an experienced lawyer who can provide counsel throughout the process.

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