The Game Audio Budget
The first question that needs to be asked is, "What is the audio budget?" The audio budget is typically created as a percentage of the total development budget. This percentage is based on several factors, the biggest being how important the audio will be to the success of the game. That number is then divided into music, sound design and voiceover categories.
While these are rough numbers, there is now a target to shoot for in the bidding process. Changes in one category will affect the other two, so monitoring all three of these numbers helps to keep the overall audio budget under control.
In most cases, the publisher cuts the checks for audio contractors, but the developer (who is responsible for creating the game) retains creative control over the audio.
Trailers and other marketing materials usually have a separate budget from in-game audio. The publisher is usually responsible for those costs. While it's possible to pull some or all of the audio assets for these projects from the game, there are still production costs involved. When a game has a large budget, high profile composers and sound designers may be brought in to add to the marketing hype and momentum. The style and tone of the audio for marketing projects should match that of the game, however, no matter who creates it.
Owning the copyright to a piece of music or audio means that you have the legal right to use and exploit it anywhere in the world (or beyond, believe it or not!) The "default" definition of a copyright for music or audio is that once it is finished being created, the copyright automatically goes to the person who created it. But there are several ways that music or audio can be created (or purchased) for use in a game. In every case, copyright law is a factor.
Buyout. This is the most common way for a developer to have an original music score composed for their game and is also common in the film and TV industries. In a buyout, the composer is hired to create an original music score on a "work for hire" basis. The contract specifically states that the composer will receive a flat fee for the work and the copyright to the music will belong to the developer. The developer is then free to use the music in whatever way they see fit, including exploiting the material in other ways such as soundtrack albums or game sequels.
The contract will define exactly how much music is to be delivered for the game. This definition is typically defined in total minutes of music, although we have seen variations to this when there are a large number of separate cues involved.
If a music cue is created but, for whatever reason, does not work in the game, the cue can either be reworked or an entirely new cue can be created to take its place. If a new cue is created, the copyright to the original cue reverts back to the composer who may exploit it in other ways.
In every case, the composer is entitled to the "composer" portion of public performance royalties. These royalties are independently collected and paid by Performance Rights Organizations (PRO) such as ASCAP or BMI. If there are ever any royalties generated through public performance, the composer is paid directly from the PRO. It is against the law for anyone but the original composer(s) to be paid this royalty, so the developer/publisher is not losing anything. In fact, if they have registered the music with the PRO as the music publisher, they will receive the publisher portion of royalties for the music.
Even in a buyout, there are a couple of deal points that could be negotiable and need to be addressed in the contract.
The developer needs to be aware that while these deal points may help to keep the initial budget lower, the cost and responsibility of tracking and paying these fees in the long term must be considered. Paying more for a complete buyout ensures there are no loose ends or additional fees.
Music Licensing. Production music is composed and produced for a wide variety of purposes, as opposed to one specific project. It is made available for use in various media through production music libraries or directly from the music publisher. The music is licensed to a client for a specific purpose and scope, and provides legal clearance for its use. The copyright is owned by the composer or in some cases a music publisher. Production music is available in almost every style imaginable and can be an instrumental or music with vocals (a "song").
While this can be a cost-effective way to acquire music for a project, it's unlikely that a lot of separate pieces of music from separate composers will support the story as well, or be as immersive as an original soundtrack. Songs can work well for certain places in the world, however, such as elevators, clubs, restaurants, radios, etc. Remember, though, the more popular the song, the more expensive the license. Original music scores combined with song licenses are fairly common in some genres.
Custom Score License. As a result of tightening budgets, some developers have been making the tough decision that owning the copyright to the music is not absolutely necessary. They want a custom music score that will make the game come alive, but don't have the budget for a buyout. In this scenario, the composer is hired to create an original music score, but he/she retains the copyright and is free to exploit the music in other ways to make up the difference in creative fees and studio costs.
This is a great way to cut production costs in the short term, but may have consequences further down the road. Since the composer owns the copyright and is trying to make up the revenue that was lost, the music may show up in places that would negatively affect the game IP in the long term. Imagine hearing the main music theme of a game playing in a TV commercial for detergent. Also, if the game becomes a runaway success and there is a sequel, any music from the original must be licensed again from the composer in order to be used in the new game. The contract also needs to be very specific about who owns which rights if control of the IP changes hands.
Adaptive/Interactive Music Scores. Adaptive/interactive music in games is sometimes used and the copyright could go either to the developer or the composer. Even when the music is digitally generated to be non-repeating, the underlying material has a copyright so the same issues with assigning copyright still exist.
The technology to seamlessly change musical backgrounds in a non-linear environment allows for great story support and player immersion. The "score" could be layers of ambient sound design with percussive cues appearing when the action picks up, or a score that is randomly generated inside the audio engine. Or it could be a fully rendered score that uses synced audio layers to change the mood. Any way you look at it, the time and cost of developing and implementing the technology to deliver this type of music score will add cost to the music budget.