Members of the spot music community have expressed skepticism over findings of the recently released 1999 Television Production Cost Survey conducted by the American Association of Advertising Agencies (4A’s), which indicates that music production costs have risen significantly.
As a follow-up to its coverage of the overall 4A’s report (12/1, p. 1), SHOOT delved into the music category, seeking feedback from a sampling of professionals in the business. According to the 4A’s survey, 1,080 of the 1,232 national :30s in the 1999 advertisers’ database used music of some type, five percent less than in ’98. The 4A’s report listed the average total music cost for national :30s as $35,000 per job in ’99, a nearly 35 percent increase over the ’98 figure of $26,000.
In the ’99 4A’s advertiser database, 770 spots used original compositions: 103 jingles and 667 underscores. The average cost was $47,000 per jingle, an astounding 80 percent higher than the ’98 average. An underscore averaged $33,000 in ’99, up 10 percent from ’98. Seventy-six jobs in the ’99 database of :30s used stock music. The average stock music rights were $5,600 per song, 27 percent above the ’98 figure.
The numbers represent a dramatic turnaround from the previous year’s 4A’s report, which compared ’98 to ’97. That survey found a four percent decrease in music production costs for the "average" national :30.
Commenting in his capacity as executive VP/head of production at Saatchi & Saatchi, New York—not as chairman of the 4A’s broadcast production committee, which, he said, doesn’t interpret study findings—David Perry conjectured about possible factors behind increased music costs in ’99. He noted that expenses incurred by agencies in researching music for a project and in soliciting competitive demos from various houses could figure prominently in the bottom line.
"My experience is that fees aren’t going up that much, so it might come down to, maybe, agencies doing more demos," speculated Perry. "That wouldn’t be reflected in a music company’s budget for a project. But before the company won that job, the agency might have done $7,000 to $8,000 in demos."
Composer/producer Ira Antelis—a music production house veteran who recently shuttered his Chicago-based shop, Antelis Music, to head Music Aid, a new division of Leo Burnett Co., Chicago (SHOOT, 11/24, p. 1)—noted that $35,000 for a :30 simply "doesn’t ring true. … That figure is too large. That’s not what it’s going for. I talk to many music houses, and I don’t know of anyone who’s charging $35,000 and getting away with it. Maybe if an agency is paying $6,000 to $10,000 in demo costs, then the bottom-line figure makes a little more sense. But even then, it seems high."
When he heard about the 4A’s findings, Dain Blair, creative director/owner of Los Angeles-based Groove Addicts, initially thought the profoundly higher costs were largely generated by licensing fees for hit songs. But when informed that those mega-licensing fees were not computed into the 4A’s research, Blair said he found the study "hard to believe. God bless whoever is getting that much money for a spot—but that certainly hasn’t been my experience, unless the jingle [reported at a 4A’s average of $47,000] requires the Mormon Tabernacle Choir."
Blair, who also serves as president of the Association of Music Producers (AMP) West Coast chapter, assessed that Perry’s theory of demos figuring into the bottom line offers at least some partial explanation. "For example, the underscore rate is probably $7,000 to $8,000 less than what I would consider to be the average—that difference could be due to the cost of demos [being figured into the 4A’s survey]," observed Blair.
However, he noted that it’s difficult to reconcile an average of $5,600 for stock music. Blair keeps track of stock music rates, in that he also has holdings in that arena, including the Los Angeles-based Who Did That Music? Library, as well as its hard-edged alternative music and contemporary Latin stock labels—Gravity and Revoluçion, respectively. "We study the rates of all the competitors," related Blair, who is also involved in distribution for the U.K. library Unity. "We don’t get anywhere near $5,600 for a laser drop for a national or regional commercial. It’s more like hundreds of dollars. I have no idea what the [4A’s] survey is talking about."
AMP national president Lyle Greenfield, who is also president/creative director of New York-headquartered Bang music +sound design, observed: "The experience of most of the music houses I’m acquainted with would not reflect the findings of the [4A’s] jury, so to speak. I even mentioned the findings to a couple of agency producer friends of mine, including a head of music, and their conclusion was that these numbers don’t reflect their experience either, except on the rare account.
"In all fairness, I need to know more about the methodology," continued Greenfield. "What are the 20 agencies [in the survey] actually reporting? What elements are being factored into the equation? It would be nice to say that the information in this study is helpful. But the reality is that we’re not looking at a breakdown that’s easy to comment on. … Clearly, the idea of a 35 percent increase is a little out there."
Though those music folk that SHOOT informally surveyed generally found the 4A’s reported rise in music production costs—including the 80 percent hike in the going rate for the "average" jingle—to be out of touch with marketplace reality, several contended that recompense should be increased.
Speaking under the condition of anonymity, a number of music shop executives said that original music for commercials is an undervalued commodity, especially in light of what some advertisers have paid for the licensing of hit songs. "An ad agency business manager told me recently that the tail is wagging the dog—with a commercial being produced for hundreds of thousands of dollars, and seven figures being paid for the licensing of a popular song for that commercial," related a music house veteran. "Meanwhile, original music costs have been getting squeezed … I see no evidence of the increased costs reported in the 4A’s survey."
