How to Price Commercial Music for Licensing

There is an ocean of new media that needs cleared music for licensing. Cleared music means that it's legally allowed to be used and licensing is basically permission to use your track for X amount of dollars. Sometimes putting a price tag on your music can be hard but a good first step is understanding your market.

The market is really defined by the type of music your produce. If you are a bad ass at creating Heavy Metal music, then think about what visuals play good with that music. Some examples would be Reality TV, Action Films, Video Games, and Horror. This begins to define your market. Next you need to find good music libraries to get your music in.

*A great place to research libraries is the Music Library Report. Basically MLR is place where other producers have rated the music libraries. 

Pond5 has held a high rank at the Music Library Report for a long time and I've personally had a lot of luck with them for commercial music. They also give you the option to do your own pricing. So to get a feel for how to price your music, the best thing to do is search the existing library.

If you are a Heavy Metal producer, then do a search on "Heavy Metal." Sort the results by popularity and get a feel for the average price for the quality of the music. If you are seeing a bunch of $25 results, but your music is better; then price it higher.

There is a common thought if someone sells 100 licenses at $40, then you could just as easily sell 200 licenses at $20. The problem with that logic is music licensing is not a linear math problem. People want the best quality track they can find at the best value. When you try to stimulate sales by being the cheapest, people assume the quality matches the price.

A good rule of thumb for music licensing is music should be around 5-10% of the overall budget. Commercial music or music that is created specifically for licensing is generally priced lower then the entertainment music you release as an artist. Both of which should be available for licensing but they are two separate things.

Keeping 5-10% as a guideline for commercial music, a track listed on Pond5 for $30 with a standard license would fit projects with a budget of $150-300. An enhanced license for $80 fits a budget of $400-800. A premium license for $130 fits a budget of $650-1300.

It's important to realize that music licensing is setup like a pyramid. The big budget Trailers, Film, Game, Advertising, and Television placements are at the top of the pyramid. If your commercial music is as good as it gets you might be able to sign with a library that deals with those type of clients. A better strategy is to shoot for those high budget licenses with the music you create as an artist.

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