Creating a Successful Licensing Business as an Independent Musician: Interview with Japanese Composer/Musician Tatsuya Oe

Tatsuya Oe (オオエタツヤ) is a world renowned Japanese composer, recording artist, music producer and DJ, best known under the stage name Captain Funk. A graduate of the prestigious Tokyo University, before entering the music business, he did a stint at one of Japan’s largest advertising firms.  In short, he’s a modern Renaissance man.

He has collaborated with or remixed numerous artists/bands that includeJames Brown, Diana Ross, Chic, Simon LeBon, Ron Sexsmith and Serge Gainsbourg. In addition to his commercial releases, under the recording artist monikers of Captain Funk,(Tatsuya) OE, and Dark Model, he has composed for and been featured in TV, film, video games, animation projects as well as corporate branding campaigns in the US, Europe, and Asia, and is known for his diversity and mastery of composition and music production in electronic, dance, rock, pop, and dramatic scores.

In July 2012 his composed piece (as Dark Model), was included on the first footage reel of the 2013 movie Elysium (starring: Matt Damon, Jodie Foster. dir: Neill Blomkamp), which played at Comic-Con, San Diego. And Tatsuya participated in Panasonic’s global branding movie Experience Color which won The Finalist Award in New York Festivals, as well asSilver Prize for the Tokyo Interactive Ad Awards. Captain Funk’s album, Songs of the Siren, was selected by Billboard for their feature story “Year in Music 2001/Critic’s Choice”,and his song Twist & Shout was featured as a theme song in SABU‘s movieMonday.

Norman Cook (Fatboy Slim) described his music as “F***ing insane!” and Tatsuya’s one of the smartest independent artists I’ve had the pleasure to meet with and discuss licensing, recording and the state of the music industry:

Thanks for taking the time to speak to me today, now let’s jump right in and talk about licensing – what is your general view of the marketplace as an independent artist and producer?

Well, I think we’re doing business in a very exciting time. There’s a great deal of market evolution in terms of business models and the scale of the market that are creating both challenges and opportunities for artists.

And speaking of evolution, how has the sync licensing market changed since you started in the music business?

Speaking subjectively, if I look at all the potential opportunities in the music business, I would say the future doesn’t really look so bad.  And what I mean is that if, like me, you’re an independent songwriter, and you have an entrepreneurial  positive attitude, the evolution from a physical to digital market gives musicians more opportunities globally and locally. Specific to music licensing, or B2B in the music business on a general level, it’s become easier for songwriters like me to connect directly with licensors (music supervisors, clients, etc.), and licensing companies who facilitate, find and close deals – and this is definitely a positive development.

And what digitally-based tools do you use to connect with potential licensors of your music?

There are a lot of licensing services, music library services and knowledge based resources available through the Internet – and this is a good starting point for networking and connecting to buyers. With that said, it is necessary for artists to carefully vet potential buyers to make sure they’re credible, professional and can work with your way of developing music and preferred way of doing business.

Offline, there are the usual resources – conferences, festivals, seminars – that are a great way to connect with potential buyers. Whatever resource you use, and you should use every one at your disposal, it pays to do research and planning beforehand, including work on your production skills and educating yourself on how the music licensing and copyright business work. Ultimately, the more you educate yourself, do research and network, the more potential there is for positive results.

So let’s speak about the issues in the current market – what do you think is wrong with it?

Well, I wouldn’t say anything is wrong per se. What I do think is that there needs to be more transparency in terms of of royalty collection for rights holders, especially in terms of international operations (regardless of media type) and streaming services. While we could say the former is a traditional issue and the latter more current, both issues are too complicated to be solved easily. When it comes to international royalty collection, it often occurs that foreign societies such as PROs (performance rights organizations) or MROs (mechanical rights organizations) cannot identify who owns what, and as a result the rightful owners do not get paid their fair share.

And why do you think there is so much confusion in confirming ownership?

Several reasons, including incorrect registration by copyright owners, a lack of licensors submitting cue sheets and human error. Also, foreign societies are often too busy to pay attention to international operations. In any case, the best thing is to be as conscious as possible about tracking the use of your music and build a good relationship with your licensors, PRO/MRO, and main and sub publishers in order to have the best possible idea of what is happening. No matter how technology evolves (such as digital fingerprinting), that’s still crucial.

So how does this effect they way you do business?

Well, even though uses and services have evolved, the basic rules of copyright haven’t kept up with innovation, especially some streaming services. In a fast moving market, sometimes the players can change the rules of the game before you have a chance to react.

Now, let’s talk about your career in particular – how important is licensing and placement to you in terms of exposure and revenue?

In general it is an important part of my overall business. It is a stable, growing part of my total revenues for more than a decade and accounts for over half of my total revenue if you include performance royalties  As my local (Japanese) market is quite different in terms of licensing (which is handled mainly through our performance rights organization JASRAC), the majority of my opportunities are international, and this is where I am focusing the majority of my efforts.

And what about exposure and audience building? How has licensing your music allowed you to build and retain your audience and get exposure for your music?

Personally, I have never looked at placement in a commercial or film as a primary way to build my fan base, but the fact is many placements have helped me get to new audiences and solidify my existing relationships with fans – especially placements with artist credits (list of name, track, etc. on ad, film, etc.).

For example, in the US, my latest project, Dark Model’s Oath (Dubstep Remix), was licensed and featured with its art work in a 2013 Verizon Wireless (NYSE:VZ) TV commercial. Together with this, its ringtone version has been exclusively released on the Verizon Store. From what I have seen, placement and exposure have helped me greatly to generate recognition and interest from a totally new audience, especially those who are crazy about edgy Hybrid (Trailer) music and EDM (Electronic Dance Music) such as Dubstep or Glitch Electronica.

Also Forever 21′s campaign video featuring Captain Funk’s Piece of You (feat. Meri Neeser) helped me to not only to get exposure to audiences in the US, but also to add a fresh image to my music through its association with the Forever 21 brand.

An earlier example would be the film Monday (Director: SABU) featuring tracks from Captain Funk. This gave me an opportunity to connect with fans of the movie and get recognition of my name and music at an early stage of my career. And as this movie was distributed in several countries in Europe, the exposure was global. Also, several placements in TV advertising campaigns with Sony Mobile Communication that featuring Captain Funk’s Boogie Electricland helped me to promote my album releases more effectively.

Has the licensing of your music led to your getting more licensing deals based on someone hearing your track? 

Yes. This has been a knock-on effect from B2C exposure. Even without a mainstream hit, the music placed in media in one area can provide you with the credibility to connect with other opportunities, even if you serve a niche market. People hear your music in one placement and (possibly) want to contract your music for their purposes.

 And, as the Internet makes it easier for people to find the work you have done, I often get inquiries and offers from third parties looking for new music based on seeing/hearing previous works – and it’s up to me to make sure I keep up-to-date on new opportunities.

 So tell us – what is the average deal like in Japan versus the US?

Honestly, business practices here are too different from the US to compare the sync licensing rates and deal points. In the Japanese market, there are that many occasions where publishers do license negotiations/deals directly with licensees (apart from “master license deals” which record labels are usually in charge of). This is mainly because JASRAC (the major PRO in Japan) often handles synchronization rights in addition to performance and mechanical rights. If you want to get into details about how the Japanese licensing market works, I’ve posted a detailed rundown on my blog.

And what was the most interesting/successful licensing deal you’ve done?

It wasn’t a licensing deal, more an overall “sponsorship” campaign that included a co-branded music with a major global cosmetic brand – and it got me massive attention.

I was involved in every part of the campaign with the client and ad agency from its early stage, including marketing, event planning, performance, media planning, making a movie for TV spot, and, of course, licensing my music as its theme song.

It was very significant to me that they gave me a chance to have a more comprehensive relationship with the brand and allowed me to better see the potential of music combined with mass marketing, then execute a successful campaign joining the two. This experience helped me to think of the music business in a broader way, i.e. looking at the where, when, what, who and how we’re using the music and how it can be monetized.

So what are the most popular types of music that are licensed from your library – both locally and internationally?

In Japan, I’ve had a lot of success with recent Captain Funk tracks (Electro Rock, Dance Pop type) in advertising campaigns, while the early ones (Big Beat, Break Beat type) are very frequently played on broadcast TV programs. Some music directors told me my Captain Funk music has been one of the most used and played on broadcast TV for over a decade, including theme and background usage.

Apart from general popularity as a commercial music genre here in Japan, electronic dance music, such as fun and hooky Big Beat/House or light Electronica (as opposed to Dubstep/Drum’n'Bass) seems to be preferred in Japanese TV programs, especially in entertainment, comedy, and reality show programs.

However, when it comes to TV commercials in Japan, my situation is pretty different. To begin with, there are not many “sync license” deals for pre-existing music in Japan. This is mainly because there are big differences in copyright laws and models, but aside from that, licensors don’t really go after trends, preferring to stick more to a total (marketing) concept for campaigns. And, while I have done a lot of compositions for TV commercials, I’ve rarely been asked to consider specific music styles or refer to others’ music by my co-workers (creative directors, producers, etc). Perhaps, this is because they see me more as a part of the “creative team” rather than a composer just bringing or licensing music to a music supervisor, which doesn’t really exist in Japan. As far as Japanese commercials go, it works much better to think of music concepts and produce music from scratch than to embed my pre-exiting music.

What about In the rest of the world?

Generally speaking in the US and the rest of the world, there are obviously some trends and fixtures in licensed music, such as energetic and anthemic Indie Rock, dreamy Pop Electronica, quirky Acoustic Pop, epic Trailer music, Dubstep and Glitch Electronica, minimalistic Modern Classical, etc. Diversity works a lot here as well, but there is a huge difference in how it actually works. Unlike Japan, in the US and Europe stocking a wide range of “pre-existing” & “pre-cleared” music tracks means a lot. Music supervisors and licensing companies are always seeking tracks, which can be cleared “right now” and are ready for use. Frequently they even ask for stems or just one shot of the track. And you never know who will want what kind of music from my catalouge of pre-existing music tracks. I think this is a very exciting situation.

When it comes to my own music placements, my latest sub-brand Dark Model’s music focusing on Edgy Hybrid/Orchestral Electronica seems to be in great demand. Since Dark Model was launched, its music has been licensed and used on Hollywood movie promos such as “Elysium (2013)”, “The Paperboy (2012)” as well as advertising campaigns in the US as diverse as Verizon, Lexus and Oakley to name just a few.

What about In the rest of the world?

Generally speaking in the US and the rest of the world, there are obviously some trends and fixtures in licensed music, such as energetic and anthemic Indie Rock, dreamy Pop Electronica, quirky Acoustic Pop, epic Trailer music, Dubstep and Glitch Electronica, minimalistic Modern Classical, etc. Diversity works a lot here as well, but there is a huge difference in how it actually works. Unlike Japan, in the US and Europe stocking a wide range of “pre-existing” & “pre-cleared” music tracks means a lot. Music supervisors and licensing companies are always seeking tracks, which can be cleared “right now” and are ready for use. Frequently they even ask for stems or just one shot of the track. And you never know who will want what kind of music from my catalouge of pre-existing music tracks. I think this is a very exciting situation.

When it comes to my own music placements, my latest sub-brand Dark Model’s (http://www.facebook.com/DarkModelMusic) music focusing on Edgy Hybrid/Orchestral Electronica seems to be in great demand. Since Dark Model was launched, its music has been licensed and used on Hollywood movie promos such as “Elysium (2013)”, “The Paperboy (2012)” as well as advertising campaigns in the US as diverse as Verizon, Lexus and Oakley to name just a few.

Now, let’s change tracks, how do you, as a rights creator and owner, typically go through the licensing process?

There are several approaches I take to get my music licensed:

1. Direct deal with licensors who want to use my music for their project (in domestic and international licensing).
2. Via licensing companies and services (in international licensing).
3. Via the copyright society (in domestic licensing, which would be very specific in Japan).

Regarding Approach 1, I often deal with friends and acquaintances that I have worked with before. Additionally, as I have my own library organizing my pre-existing and pre-cleared music both on my artist website (http://www.tatsuyaoe.com/music) and my company website (http://www.model-electronic.com/), licensors such as music supervisors, creative directors, film directors, etc. are able to reach me and complete one-stop licensing deal on a global basis.

As to Approach 2, several licensing companies, mainly in the US, facilitate pitching my music and negotiate with licensors on my behalf. This kind of service has emerged over the past decade and some companies are doing a great job for me. Building a strong relationship with them allows you to leverage the potential of your music, but of course, you have to do your homework beforehand.

As to Approach 3, in most cases, licensors in Japan only have to negotiate with and pay licensing fees to JASRAC (Japanese Society for Rights of Authors, Composers and Publishers) on the basis of their statutory rates because they can administrate all copyrights such as performance, mechanical, and even synchronization rights on behalf of us unless you ask JASRAC to exclude some of them. This is limited to domestic operations and is very different from the US where neither PROs nor MROs handle synchronization rights.

What do you think can be done to make the music licensing process and business more fair to better work on behalf of artists, rights holders and producers?

Well, I don’t really think the business is innately ‘fair’. The music business has always been competitive, full of ups-and-downs and politics. However, you can protect yourself by assessing what you can create or control and then focus on that – your own opportunities, business resources, relationship, communication skills, and of course, quality and quantity of your music. That’s a much more productive way to look at business.

This means organizing your music tracks with necessary tags (composer, publisher, master owner, genre, atmosphere, BPM, sound likes, etc), making your own library/portfolio so that media professionals can audition/evaluate your music immediately, checking with licensing companies, organizing your contact list, packaging your show reels, updating your news about music placements, etc. After that it’s all about networking and building a good relationship to increase the opportunities of getting your music licensed.

When it comes to sync licensing, we can get music licensed and used only after some buyer/customer/client really wants to use it for their project. Unless you already have a successful catalog of hit songs or rare opportunities such as tie-in promotions, your stature as an artist and popularity in the music market actually has little to do with your success in placing music. Music supervisors and directors see how your music will match or enhance their project including its concept, target, scene, marketing issues, etc., and unlike label A&R, they don’t care if you’re a great artist with an awesome photo or bio.

We sellers have to figure out what will make buyers use your music in order to close a decent deal. That’s a marketing issue, but I believe that ultimately it’s an issue of building  relationships and credibility.

And this is actually what licensing companies or production/library music companies do for their client. So if you are an artist or rights holder who wants to get your music licensed, just learn from what they do. It’s not smart for an artist, especially an independent one, to think ‘that’s their job, not mine’. You should have a ‘dealer/merchant’ mindset. And, studying the media and how your music could be used is essential. If you’re interested in sync-licensing your music to trendy TV programs, watch them to learn what songs are used in them. If you’re interested in music placements in automobile ad campaigns, research what clients use what type of music toward whom (target).

Let’s talk about technology – do you think it can help artists improve the way they do business?  

Definitely. Especially if you’re an indie artist. It could help you leverage your network and the potential of your music, but it could also work the other way around. Like I said before, regardless of whether it is a direct deal with clients/buyers or a deal via licensing companies, you would need very different skills and knowledge from garnering ‘Likes’ or plays/listens on general social network websites.

I would hope that technology can accelerate the democratization and openness of the music licensing business, but it should be limited to small or mid-scale projects for web/TV/films/ads on a non-exclusive-basis. But, I don’t think when it comes to music licensing to broadcast TV, big budget commercials, or Hollywood (box-office) movie trailers, we can let the whole process become ‘automated’. No matter how technology evolves, the bigger the budget or placement is, the more dependent on individual skills and exclusive the deal becomes.

And what about technology improving the way music supervisors and other right buyers do business?

Generally, it should. But when it comes to finalizing the deals, it would not apply to all buyers. Top-notch music supervisors and directors in the know have already had strong business connections and a clue to find the music they want and finalize the deal in time. They also might use Soundcloud, Youtube, Spotify, and database services such as AllMusic to search music or bands, but that doesn’t necessarily mean they bother to take time reaching out to their favorite but unacquainted composers or publishers directly. Having said that, for buyers such as those who are seeking music at a modest price, web-based matching services for non-exclusive licensing deals would help a lot. 

How would you like to see the rights market evolve? What would a better rights market look like?  

Honestly I don’t see the market from the futuristic or macro point of view because music licensing business and copyright operations differ so greatly depending on territory.

Regarding sync licensing, some markets such as Japan are specific with a low liquidity while the US and UK rights markets are flexibly moving forward to open competition and seeking the next possibilities for monetizing music. Personally I think this “liquidity” is the key for the next era of music licensing.

This may be particularity limited to Japan market, but some copyright authorities still seem to confuse rights business with culture, or even something more academic or metaphysical. While they claim their possessory rights or exercise their rights to claim when abused, some of them abhor the tendency of music being regarded as financial, cashable/exchangeable asset. Perhaps they haven’t been able to shift out from their old comfort zone. Or, the silver platter environment where you don’t need to negotiate with licensors directly might have allowed them to live with such an illusional way of thinking.

By the way, in our traditional accounting standards, or at least in Japan, calculating music copyrights as potential cash value or financial asset hasn’t been accepted except in cases of M&A or buyout. So, not only banks and investors but also publishers and copyright organizations (unless they’re subsidiaries or branches of global mega publishers) haven’t gotten into the habit of considering music rights in terms of cash value. That lack of asset management mindset, or rigidity, could affect the potential of developing their portfolio globally in the future.

While we still have a long way to go, I hope each rights market will grow to be more mutually complementary, flexible/fluid, deal-friendly and transparent – not to say it should become like a stock or real-estate market. All we have to do now is to learn the differences and find the opportunities of each market, and make the most of them.