Using the example of a song written by Diane Warren called "Unbreak my Heart" which was licensed for use in a Citibank commercial, Bernstein explains that the continued availability of the commercial on YouTube after its scheduled TV run harms the market for further licensing of that song:
Okay, so why should anybody care if this is on YouTube. It seems pretty harmless. Somebody was a fan of the spot, they found it funny, which should make Citibank happy since that was the point, and they decided to put it on their YouTube page.(I would point out that if Warren (whom I believe is the copyright owner) believes her song is being performed on YouTube without a proper license, she can always send a takedown notice. And then another when it gets re-posted. And another....)
The reason is this, music supervisors do their homework. If you are hired to find and license an appropriate recording for a client’s commercial you begin by executing your creative search. Trying to find music that is appropriate for the creative vision of the commercial. Part of that search is to check into the previous uses of each song that may be a viable option. Yes, clients will license songs for use in advertising even if they have been used by other clients at other times. That being said, if the commercial is still drifting around in cyberspace the chances of that song being re-licensed, especially in the same product category, can be greatly diminished. If you are doing a creative search for Bank of America and you punch Citibank and “Unbreak My Heart” into Google, this video comes up at the top of the list. This would probably not enhance Diane Warren’s chances of re-licensing this composition to Bank of America.
Sure, the odds may be against another financial services company ever wanting to license “Unbreak My Heart”, whether or not it was used by Citibank. But what if there is a chance, and what if you do not have a Diane Warren back catalog bringing in constant revenue. Would you want to potentially miss that opportunity because the spot is viewable on YouTube after the publishing license has expired. Probably not.
And while he's on the topic of how songwriters and publishers earn revenue, Bernstein also reminds us that the frequent admonitions to the record labels and their artists that they should stop trying to charge for music itself and instead focus on making money from scarce goods such as concert tickets often ignores the songwriters and composers (and publishers) altogether:
There is a lot of talk these days about giving away music for free. Using it as a loss leader to generate email lists, create tribes and to help enhance other revenue streams such as merch and concert tickets. All of those are perfectly reasonable ideas. But they do no nothing to help the songwriter. If the composer is not the performer, they do not get a piece of ticket sales or concert t-shirts or the fragrance or shoe line.By the way, I highly recommend The Licensing Plate as a valuable source of news and blog posts about IP licensing issues. The site is very comprehensive, frequently updated, and well-designed.