In music synchronization deals, the term Most Favoured Nations (MFN) is a way of ensuring fairness in the payment terms between all the parties involved.
What it means:
When an MFN clause is included in a sync deal, it guarantees that no one party—whether it’s a music publisher, songwriter, or master recording owner—gets paid more than the others for granting the rights to their portion of the music. MAIA Universe streamlines this process, offering pre-cleared licenses that already account for MFN considerations.
How it works:
Suppose a production company (for a movie, ad, or TV show) wants to use a song. They need to secure rights from:
The publisher (who owns the composition/songwriting).
The record label (who owns the recording of the song).
With an MFN clause, if the publisher negotiates a higher fee, the record label will automatically have their fee adjusted to match it—or vice versa.
Why it’s used:
MFN clauses ensure all rights holders are treated equally and prevent any party from being underpaid for the same usage of the song. By offering pre-cleared sync licenses, MAIA Universe eliminates delays and simplifies compliance with MFN terms.
Example in Practice:
A movie studio uses the MAIA Universe platform to license a song. They offer:
$50,000 to the publisher for the composition rights.
$40,000 to the record label for the recording rights.
With an MFN clause in place, MAIA Universe's system automatically adjusts the record label’s fee to $50,000, ensuring equal treatment of the two parties.
By incorporating MFN terms into our sync licenses, MAIA Universe creates a level playing field for all rights holders, ensuring equal payment and a seamless licensing experience for companies and creators alike.