The Hits Just Keep on Paying at MCA’s Growing Licensing Division : * Licensing: Producers of commercials, TV shows and movies are increasingly paying record companies for the right to use existing music.

Two years ago, Doug Frank, vice president of music at Warner Bros. Inc., called Jeff Hart at MCA Records. Frank needed a poignant love song for a scene in the ABC-TV series “Life Goes On,” in which one of the main characters, a teen-ager with Down’s syndrome, begins a romance with a young girl at a masquerade party.

Hart recommended an Elton John song, “Sacrifice,” that was so new radio stations had just begun playing it. “It worked like a charm,” Frank said. “What this song was saying was he knew this girl would never really accept him.”

The day after the episode ran, Frank received calls from people all over the country, including a radio programming director in Florida who loved the song and wanted to add it to his playlist.

Score one for Hart, who together with Tom Rowland manages film and television licensing at MCA Records’ Special Markets and Products, a division of MCA Inc. in Universal City.

Never heard of it?

“We’re a very small, very specialized area,” Rowland said. “A lot of people at this company don’t know who we are or what we do.”

What Hart and Rowland do--along with their counterparts at the other major record companies--is license the rights to existing music to film, TV and commercial producers. It’s an obscure business, but one that’s grown tremendously in the past decade, ever since “Miami Vice” captured the MTV generation by using Top 40 hits to set the show’s mood.

Prior to that, in film, TV and commercials, original scores were used almost exclusively. Producers only occasionally licensed existing songs and, when they did, record companies considered it more a nuisance than a way to generate revenue. A license was granted for a token amount and that was that. But these days, producers license already-recorded songs regularly and, every time they do, a one-time fee of anywhere from $1,000 to $100,000 or more goes into a record company’s pocket.

What’s more, a record company gains important exposure for its artists--new and old--when their songs are featured in filmed entertainment. Disney’s 1987 movie “Good Morning, Vietnam” with Robin Williams resurrected the works of the late classic jazzman Louis Armstrong after his “What a Wonderful World” was featured in the film.

And last year’s blockbuster “Terminator 2: Judgment Day” gave a boost to the already soaring career of Guns N’ Roses. The film was followed by a “Terminator”-themed music video featuring the rock band’s hit single from the movie.

The Louis Armstrong and Guns N’ Roses songs were among the thousands of recordings MCA has granted licenses for since December, 1985, when Hart, a paralegal, was assigned to handle the licensing on a full-time basis.

Hart and Rowland, who one year ago moved to MCA from Time Warner Inc.’s Warner Special Products, won’t discuss their licensing division’s revenues or the fees they’ve charged for specific recordings. They acknowledged that the unit still generates only a tiny fraction of the record company’s total revenues.

But in its six years, the licensing division’s revenues have increased tenfold, and “not only did we expand, every other record company did too,” Hart said.

MCA has one of the largest record catalogues in the business, with thousands of artists under dozens of different labels. The artists range from popular contemporary performers such as Tom Petty, Cher and Sonic Youth to old classic acts such as Buddy Holly, Patsy Cline, Chuck Berry and Bing Crosby.

Hart and Rowland generally fill orders in one of two ways. Either a production company calls with a request for a specific song that the producer or director has in mind for a scene, or Hart and Rowland will be asked to suggest music that fits a certain theme or time period. Hart and Rowland also send copies of new releases and compilations of older recordings to frequent customers as a way to familiarize them with MCA’s music.

The fees they charge vary widely, depending upon how prominently a song will be featured, the artist’s willingness to approve the deal, how badly the producer or director wants a particular song and how many songs are requested.

Licensing fees generally have risen over the years, partly because the demand has grown but also because film, TV and commercial producers now ask for much more in the way of rights.

Several years ago, for example, a producer might have asked for five-year rights for one type of use only--such as free TV or theatrical release. But with the growth of cable, videocassettes, syndication and foreign distribution, producers now almost always want rights for all the many markets where their productions might appear over the years.

Warner Bros.’ Frank said he’s done “hundreds of thousands of dollars of business” with Hart and Rowland. Frank licenses music for Warner Bros.-produced TV shows such as “China Beach” and “Murphy Brown,” but he believes that some uses of existing songs might be petering out. Because of cost pressures, producers may be less apt to use well-known songs when the music is only in the background and isn’t considered an essential element of a scene.

But for the most part, Frank and others say, existing music in film and TV is more popular than ever and is increasingly seen as an integral part of storytelling. In “Murphy Brown,” for instance, a key aspect of the personality of the title character, played by Candice Bergen, is her love of old Aretha Franklin records, which are licensed by Arista Records, one of MCA Records’ rivals.

“It establishes a side to a character that otherwise might be difficult to put into words,” Frank said.

For TV shows like “Quantum Leap,” in which the main character is a time traveler, music from MCA and other record companies also helps identify the era, said Derek Platt, director of music for Universal Television, the show’s producer.

And contemporary music is a good way to rope in young viewers, said Celest Ray, an independent music coordinator who licenses music for Fox’s “Beverly Hills 90210.” That show’s teen-aged characters “have realistic issues in their lives and they’re also listening to what’s on the radio at this time,” Ray said.

Moreover, in the case of motion pictures, the use of existing songs has boomed in part because of the trend of putting out movie soundtracks, Ray said. When another record company assembles a soundtrack album that includes MCA songs, MCA negotiates another licensing fee. “It’s just additional revenue for everybody,” Hart said.

Meanwhile, the use of old records in commercials--virtually nonexistent until about three years ago--is also gaining speed, Hart said. This past Christmas, MCA had five songs in nationally televised commercials, including Steppenwolf’s “Born to Be Wild” in a Playskool ad and Bing Crosby’s “I’ll Be Home for Christmas” in a Miller beer commercial.

Commercials are proving to be the most lucrative market for record licensing so far, Hart and Rowland said. Because commercials are brief and the song is likely to be very prominent, licensers are able to charge more. Also, advertisers generally ask for exclusive rights in their area of business, which jacks up the price further.

Despite the rapid growth in record licensing, Hart said he still worries that it might be just a fad that will quickly evaporate. “As efficient and well-liked as we might be, who’s to say there won’t be a shift in the trend of using music in movies and TV shows?” he said.

But most industry insiders appear convinced that it’s now an established business that won’t soon disappear.

As Mark Leviton, senior vice president at Warner Special Products, put it: “If you believe that rock ‘n’ roll is here to stay, then the use of it in films is probably here to stay too.”