The Breakdown: Our next interview in the SXSW Q&A series is with Annie Lin, Director of Licensing for The Rights Workshop, a music supervision and clearance company. Annie tells us about her panel ‘Music Licensing for Emerging Media: Apps, Widgets, Viral Videos‘ shedding light on the challenges and opportunities that are facing content creators and those companies that want to license content. Read on for insight into how it’s all playing out in the rapidly changing music business.

S/G: Can you tell us about your SXSW panel entitled “Music Licensing for Emerging Media: Apps, Widgets, Viral Videos” and what you’ll be discussing?

Annie: The panel focuses on some of the really new and innovative ways music is being used in emerging technologies — from iPhone games to viral videos. I will be discussing the challenges faced by content creators who wish to license music for use in new media – particularly commercial music controlled by major labels and publishers.

S/G: What does someone who wants to integrate music into their web or interactive media project need to keep in mind?

Annie: It is important to consider the cost of licensing music in advance of cutting the music to the project, as well as the amount of time that the licensing process can take. When you are using major label and publisher-controlled copyrights in an interactive media project, you are asking for usage rights that, depending on the use, may or may not be familiar to the copyright holders.

Under U.S. copyright law, there are no statutory music rates for most types of interactive licensing, which means that the fee is a matter of negotiation. One of the major negotiating points is the nature of the use, and in determining this, a copyright holder might ask questions like where is the music file hosted; how much of the song are you using; how many people can or will be likely to hear the music; is it streaming or downloadable; and so forth.

Some uses are straightforward, like Internet streaming in a video tethered to a single site. But when the project is more complex — for example, if it has a viral component or if it’s a mobile app that also talks to a widget on the web — then you need to have some conversations with the copyright holders to ensure that they understand the use and that the price doesn’t go through the roof merely because you are doing something new. These conversations take time, and in a best case scenario, you will have factored this into the product development schedule for your project.

S/G: In this rapidly changing music industry, how can content creators ensure that their work is not only protected but that it is positioned for licensing opportunities?

Annie: People complain that the Internet has created too much noise and interference and that it difficult to be heard in an environment where everyone, from the mediocre to the talented, has a voice. But I do strongly believe that talent has a way of finding its audience and that the most successful artists will use the Internet to bypass gatekeepers and create opportunities for themselves.

The music business has always been a business of relationships and connections. Traditionally, it was necessary to wait for someone to open the door for you because there was no other way to get into the door. But with social networking tools like Twitter and LinkedIn, and the abundance of business information online, it is possible for someone savvy and motivated to become a player — and for bands to get their music in front of the right people. Why wait for a record deal to get your music in front of an ad agency or a production company? Why wait for an agency to deem you worthy? If you do the research, end up in the right person’s inbox and craft the right pitch, you will be exactly where you want to be.

The Internet has made it possible for other earnest content creators to also follow this route, and that means that the space can be crowded. But I do think that politeness, persistence and business-savvy pay off. We’ve really come a long way from the era of demo tapes and CDs hand-mailed to P.O. boxes, of “don’t call us, we’ll call you”, and of mythical suits that work in the far-off distant “industry”.

As for protection of work, I don’t think it’s as much of a concern when it comes to music licensing and clearance. Realistically, the companies that really have a budget to license music will secure permission to use the music because they don’t want to be liable for copyright infringement. Occasionally, you do hear about things like the recent White Stripes/Superbowl controversy, which may or may not have been a mere oversight. However, for the most part, companies do make a good faith effort to license the music used in their projects.

S/G: In this age where record companies are shrinking, music stores are becoming extinct and we see a shift towards the independent musician, how does this play out within music licensing business?

Annie: I think that these trends may ultimately lower the cost of licensing music. As a rule, it costs more to license music from major publishers and labels because they control the copyrights to “name” content, and have traditionally had a monopoly on mass marketing and promotion channels. However, the Internet has made it possible for unsigned independent musicians and musicians on a smaller label to promote themselves creatively and make a name for themselves. These artists are generally been happy to undercut the price of major label content if it means that they can get their song into a TV show or advertisement or film. At some point in the future, this may mean that the majors will need to find a way to compete by their lowering prices as well. Perhaps then the cycle will repeat itself. I think that the end result will be that the cost of music goes down.

S/G: What are you looking forward to seeing at SXSW?

Annie: Aside from great films, amazing bands and old friends, I’m looking forward to seeing what’s groundbreaking and next at SXSW Interactive — the next Twitter, the next Foursquare, the next Tapulous, the next Shazam. And a few years later, when the app is firmly entrenched on everyone’s mobile phone or iPad, I’ll get to look back and say I remember when that was just a product demo at SXSW.

Explore the rest of the SXSW 2010 Q&A Series

Image credits, from left to right:

Austin – by tantek

Badge – by adactio

4sq iPhone app – by dpstyles(tm) [dennis crowley]

Microphone – by hiddedevries

Nexus One – by pittaya