Strike won? The implications of the US strikes in the business
The Writers Guild Of America strike of 2023 (running from early May to late September) and the almost-concurrent SAG-AFTRA (Screen Actors Guild and the American Federation Of Television & Radio Artists) strike had enormous knock-on effects for the sync business.
Because a multitude of shows were postponed or even cancelled, a significant part of the sync business found itself powerlessly watching on, hoping for a swift resolution so business could get back to normal. With so many shows and films not being made, sync income for the year was dramatically down. This all came as the dust was only starting to settle after the Covid-caused shutdown, meaning the prognosis for the business was starting to look grim.
John Sepetys, SVP of A&R at North Star Media, suggests business is starting to get back to normal in the US, but not necessarily with the immediacy that the industry might have expected or hoped for.
“Since the strikes ended we’ve experienced more of a slow build in deal flow as opposed to the floodgates opening,” he says. “But now, thankfully, it feels close to ‘normal’ again. April has been particularly busy and we’re hoping to ride that wave all the way into fall TV season.”
Joe Betts, vice president of sync licensing at BMG in the UK, says other markets were not hit quite as hard as the US was by the strikes (even if many of the global shows on streaming services were coming out of the US).
“We were obviously somewhat insulated in the UK and because projects engage with music at various points in the process – sometimes at script stage, sometimes at the last minute – we didn’t see a dramatic, cliff edge impact,” he proposes.
Even though the Writers Guild Of America and SAG-AFTRA strikes are now over in the US, things are not back to normal in the way some in the sync business had hoped.
“While last year’s writer and SAG strikes have ended, there’s a noticeable downturn in new productions, leaving many large studios idle and uncertain about future projects.”
– Ryan Fitch, Mutiny Recordings.
“While last year’s writer and SAG strikes have ended, there’s a noticeable downturn in new productions, leaving many large studios idle and uncertain about future projects,” says Ryan Fitch, the sync licensing director and music supervisor at US-based Mutiny Recordings.
Betts concurs, but adds that as one style of TV is being downsized or deprioritised, other forms of TV are being pushed forward. As one hand takes away, the other hand gives. To an extent.
“There has been quite a dramatic downturn in commissioning of scripted drama and pressure on budgets, which is a concern, but it feels like a reset rather than something we would expect long term,” he argues. “There is a lot of focus on non-scripted entertainment, including from the streamers, so that’s a great opportunity for music to be heard. I’m excited to see streamers get more into appointment-to-view and live-type events and the potential for music placements in that area.”
“There is a lot of focus on non-scripted entertainment, including from the streamers, so that’s a great opportunity for music to be heard. I’m excited to see streamers get more into appointment-to-view and live-type events and the potential for music placements in that area.”
– Joe Betts, BMG
Pamela Lewis-Rudden, VP of Plutonic Group Syncs, says the sector was able to spring back into action following Covid and managed to do the same after the 2023 strikes.
“The post-strike landscape has been full-on, to put it mildly [and] the sheer amount of TV and film projects in production is beyond astounding and a bit overwhelming,” she says. “The vast majority of placement opportunities in Q1 were primarily centred around US TV productions, with film trailers coming a very close second. Advertising has remained steady throughout all of the ups and downs these past few years. They were quick to adjust and pivot during lockdown and have been able to maintain a solid and consistent output of outstanding spots ever since.”
There is, however, mounting concern that a looming IATSE (International Alliance of Theatrical Stage Employees) strike around “wages, residuals, working conditions and the use of artificial intelligence in production” could hit the pause button again on many films and TV shows.
The strikes might have been about writer and actor terms, but the heavyweight broadcasters and streaming platforms were partly able to turn some of this to their own advantage and recalibrate their budgets and reign in their spending.
This over-spending was in a large part driven by a desperate attempt to grab as much market share as they could without being so focused on profitability – effectively the TV version of the Jeff Bezos strategy for growth at Amazon for many years. (i.e. long-term growth being prioritised over short-term profits).
“The booming era of streaming television over the last three-to-four years has hit a reset button, prompting studios and production services to reassess profitability and streamline operations,” argues Fitch.
Sepetys suggests that wider budget cuts around music are starting to see library music becoming more of a first-option choice for some clients than commercially released music.
“Nothing that’s hit our bottom line yet, but I’ve noticed a trend that could be an indicator of where we’re headed,” he says. “While spot-checking TV cue sheets, I’ve noted more library tracks listed than in previous seasons. So while our indie artist fees haven’t changed, perhaps we’ll have fewer opportunities in the future if music budgets are being stretched by using more production music. With fewer song slots available for real artists, this would make an already hyper-competitive sync landscape even more challenging. But we’ll cross that bridge if and when.”
The AI conundrum. Threat? Opportunity? Both? Neither?
One of the issues underpinning the possible IATSE strike (see above) is around AI (and how they “want some of the spoils of artificial intelligence”) and those in the music creation and music licensing spaces are also worried about the impact AI-generated music could have on what they do and how they make money from sync.
Fitch says that many AI music generation tools are “thankfully still amateurish” at the moment, but they could pose a long-term threat for the business by allowing clients to get music for little or no money, thereby taking critical revenues away from traditional licensing partners.
“This development threatens to render licensing of non-famous music obsolete,” he warns. “Why pay to license a lesser-known song when AI can generate custom, royalty-free music within a few minutes for free? It’s too early to tell if AI is just overhyped or will be a huge game changer, but I think we are already seeing its potential to put a large part of the music industry out of work.”
George Hyde, founder and director of Music Affairs, feels that generative AI music will hit different parts of the sync business in characteristically different ways.
He makes a distinction between what we might term “known music” and “functional music”. The former is music that has been commercially released and already connected with the public; the latter would generally fall under the category of production (or library) music.
“For rightsholders of commercial repertoire, I can’t see the impact [of AI] being too significant. The power and potency of using pre-existing commercial music in media productions is in large part down to its recognisability and broader commercial appeal.”
– George Hyde, Music Affairs
“For rightsholders of commercial repertoire, I can’t see the impact being too significant,” he says of the first category. “The power and potency of using pre-existing commercial music in media productions is in large part down to its recognisability and broader commercial appeal. Unless lawmakers throw rightsholders to the wolves and rip up centuries of established legal precedent, it seems unlikely that AI-generated knockoffs will ever be available for use commercially without consequence.”
His health check on the second category is less optimistic. “By design, production music doesn’t need to be known to achieve impactful storytelling,” he says. “The value of production music comes from its eclecticism, ‘clearability’ – master and publishing rights are typically controlled by a single source – and cost effectiveness. Unfortunately for production music libraries, these are also qualities of generative AI.”
He says a year ago, AI-generated music could be airily dismissed as an obviously inferior product, but the software underpinning many AI services has evolved at light speed since then and there has been a remarkable jump in the quality of AI music.
“My gut instinct is that the commercial landscape won’t change for production music libraries in the short-to-medium term,” he proposes. “The legal framework for governing generative AI continues to percolate. And with such legal uncertainty comes a significant level of risk. It’s unlikely that producers of media content will elect to adopt such a degree of risk when equally affordable, varied and cost-effective alternatives exist with limited legal risk. However, in the longer term, as legal risks are ironed out, confidence grows, and the quality of output continues to improve, I expect generative AI to have a significant impact on the sector.”
As such, he suggests, those in the production music world have some breathing space, but they should use that to refine and improve their offerings so that they are ready when AI-generated music starts to try and steal their lunch. “My advice is to do all they can to modernise their commercial strategies to compete with AI tech when the time comes,” he says.
It is not all AI-powered pessimism, however, as far as Hyde sees it. AI tools can help the sync business enormously and significantly streamline processes. “Traditional music search and discovery platforms are being enhanced with AI and catalogue owners should consider integrating them into their existing tech,” he argues. “For instance, the AI-powered music search system created by AIMS, integrates into existing platforms and provides a more intuitive search and discovery process.”
For Lewis-Rudden, the solution for the industry lies in adapting to these technological shifts rather than trying to will (or litigate) them out of existence. They will be part of the reality of sync licensing and need to be proactively worked with rather than reflexively worked against.
“AI is as similar a threat to industry as was the introduction of the CD and LimeWire,” she argues. “It’s something we’re all going to have to acknowledge and eventually incorporate into our daily lives. How we work along with AI will determine if it truly threatens our industry.”
Sepetys holds a similar view – namely that AI is here and the industry needs to adapt to it and the changes it is bringing. “If there’s anything to be learned from the past – Napster comes to mind – it’s that we’ll be better off embracing AI from the jump, rather than trying to stonewall it,” he argues. “The future waits for no one. We either climb aboard the AI Train, or we get run over by it.”
“The future waits for no one. We either climb aboard the AI Train, or we get run over by it.”
– John Sepetys, North Star Media
The more cynical and satirical might say a different form of AI (certainly artificial, but in some cases seriously lacking intelligence) is also going to impact the sync business in the US, with the presidential election set for 5 November. Fitch suggests “political ad spending will further intensify competition for airtime” and that this could see many commercial ad campaigns from smaller clients (many of which will involve music usage) be put on hold until after the election.
Gaming gains
On the more positive side (or, at least, on the less uncertain side), video games becoming TV series and films (from Tomb Raider and Mortal Kombat in the 1990s, through Sonic The Hedgehog, Angry Birds, Super Mario Bros and more) is a trend that continues to grow and evolve.
Fallout is the latest series to capture the viewing public’s imagination (and their time). Because video games have a long history of licensing music, the doors of opportunity are opening if they make the transition to TV or the cinema.
“Sync opportunities here can be limited or expansive depending on the game property’s history with licensed music,” says Mat Ombler, head of gaming and music partnerships at Laced. “In the case of Fallout, the video games have in-game radio stations which feature a variety of music mainly from the 1940s and 1950s. Many of the artists that are synonymous with the video games such as The Ink Spots and The Andrew Sisters also appear in Amazon’s TV adaptation.”
He says there is a demonstrable and measurable impact of a sync in such a series with rising streams of the artists or tracks in question. “I recently analysed the growth in monthly Spotify listeners for artists that featured in the Fallout TV series soundtrack and video games, and the results were pretty mind-blowing,” he says. “Some artists managed to double their monthly listeners in one week. I did another check at figures today and some have grown their monthly listeners by 500%.”
Crisis? What crisis? This crisis?
Against the sync-powered boom for certain acts and catalogues, an existential crisis appears to be brewing in the industry, with two pieces recently in the music business trade press asking hard questions about the future of the business and how it needs to evolve.
“Is the Music Business Out of Synch With Game Developers?” asked Billboard in March. The premise – or one of them, at least – was that the games business is several times bigger than the music business in revenue terms and, as such, “gaming does not need more labels’ music to thrive”.
The piece quoted those in the gaming sector heavily criticising the music business – or more specifically the music business’s onerous and (unnecessarily) complex licensing models.
Ben Sumner, managing director at Feel for Music, drew from bitter experience when he said, “Every time I speak to a games publisher, they’ve always got at least one horror story about trying to navigate music rights.”
Vickie Nauman of CrossBorderWorks put hard numbers on this, saying that, in order to clear rights for 20 songs, she had to get 143 agreements in place.
In addition to this, hefty advances demanded by rightsowners were criticised as driving games companies away from traditional licensing. “Incorporating music is often an experiment for games, and they don’t want to pay millions of dollars for an experiment,” argued Alex Tarrand, the co-founder/COO of STYNGR (which delivers pre-cleared music into games).
An op-ed on Music Business Worldwide from Tom Stingemore, founder of sync data platform Alloy, went in even harder. “The music industry’s sync licensing process is no longer fit for purpose,” is how he opened and went on to explain where it was broken.
Part of the problem, he argued, stems from the fact that the “process of sync licensing has not evolved to any great extent for over 50 years” and such archaic practices and processes are holding everyone here back.
He bemoaned “the notoriously complex, unwieldy and time-consuming manual clearance process that prospective users of their songs are currently required to undergo” and argued “the ever-increasing volume of manual sync approval paperwork has become increasingly unsustainable” for those working in gaming, TV, film and advertising who had to grapple with it all.
Sepetys offers a counter view to this. While he says AI can help streamline and expedite processes here (in both catalogue search terms and licensing terms), automating everything is not necessarily without its problems.
“Playing devil’s advocate, I would argue a ‘slow, manual process’ is a good thing as it most often yields the highest quality results,” he suggests. “It’s the difference between a barista handing you a steaming mug of freshly ground coffee versus pushing a button on a Keurig machine. Faster doesn’t always mean better.”
The quantitative leap in sync requests is, Stingemore proposed in his op-ed, coming at a serious cost for the business as it is facing a prioritisation problem.
“Record labels & music publishing licensing executives are now drowning in a sea of smaller, lower-value sync requests leaving them with less time and resources to focus on the bigger, higher profile (and higher value) opportunities – the ones that can really move the dial for an artist or song,” he said.
The solution, as he sees it, lies in an overhaul of the system the business has run on for decades. But rightsowners and those seeking to license those rights need to collectively fix the logjam.
“We must work towards a solution that brings this hugely important sector in line with the innovations and advances being made in other areas of our industry,” he proposed. “The sync industry WILL be modernized, it’s inevitable, and it’s now time for us to decide – as an industry – if we want to be the ones to do it … and on our terms.”
The year, the changes and the challenges ahead
It has been a turbulent, uncertain, exciting and terrifying four years for the sync business. Perhaps the most turbulent, uncertain, exciting and terrifying in its existence.
A pandemic closed huge parts of the sync industry down and then, as it was recovering, a series of strikes saw things being put on hold again. Now it is grappling with the complexities of AI – software that can streamline the business while creating “free” music that TV and film companies, keen to slash their overheads, could be increasingly drawn to.
Library music could start to overtake commercially released music on the shopping lists of TV/film productions; but it is also library music that could be erased most by AI-powered music.
Pining for the “old days” helps no one here. Rights and revenues associated with music need to be protected and valued properly; but the sync industry must also move with the times. The need for the sector to evolve has always been there, it is just the speed at which it needs to evolve that is changing.
