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Jared Gutstadt used to be a struggling musician. Not any more.

DAMON CASAREZ/The Globe and Mail

"We live in a world where music's free."

Jared Gutstadt is matter-of-fact about the state of the album-selling business, showing none of  the angst you'd expect to hear from someone who makes a chunk of his living writing and playing music. As the CEO of Jingle Punks, Gutstadt has to be pragmatic, even if he's committing what some view as a cardinal sin: creating and licensing music for film, TV and commercials.

A Toronto native who moved to New York in 2009 for grad school, Gutstadt had been playing in struggling bands by night and working as a video editor at MTV by day, choosing tracks from "production music" libraries to soundtrack the action in the likes of Chappelle's Show.

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The music industry boasts dozens of libraries, the largest of which are affiliated with the major record labels, and millions of songs are available for licensing, from no-name tracks to cover songs to huge, prohibitively expensive hits. The Rolling Stones famously charged Microsoft a reported $3-million (U.S.) to license Start Me Up for an ad campaign for Windows 95.

Ready-made production music normally costs a fraction of that figure. The filmmaker or TV company licenses the publishing rights (the lyrics and structure of a song, as opposed to the actual recording), paying what's known as a "synchronization" fee. In 2013, according to the IFPI, synchronization fees worldwide totalled $337-million. In addition, whenever the TV show or movie featuring the track is broadcast or reproduced on DVDs, the owner of the recording itself is usually entitled to another sum, producing a revenue stream that can be small, but potentially steady.

Gutstadt and a partner saw an opportunity to be the suppliers of the music for the shows he and his MTV co-workers were editing, and Jingle Punks was born. The opportunity to become more than a niche player emerged not long after.

"There wasn't enough production music that was easily accessible for the tidal wave of content that was going to occur," Gutstadt says on the phone from his office in Los Angeles. That wave was unscripted reality shows.

Jingle Punks' technical innovation, spearheaded by co-founder and software developer Dan Demole, was to offer a curated selection of license-able songs organized by what Gutstadt describes as a "relational search algorithm." Users can search for music using non-musical terms such as the names of movies, and select and pay for the use of those songs, all through the company's website.

The editors Gutstadt worked with at MTV went on to do shows such as Pawn Stars, Honey Boo Boo and Duck Dynasty, which rank among the highest-rated series of the past decade. All of them have featured music drawn from Jingle Punks' searchable online database of original, reasonably priced material. The company has also worked on advertising for major brands such as Meow Mix and Jack Daniels.

In the bad old days, licensing music for commercials or TV either meant paying mega-fees for snippets of the hits, giving an up-and-coming band enough dough to overcome their fear of "selling out," or drawing from a low-cost production music library. The problem was, most library music was terrible.

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In addition to the music made by Gutstadt and company staffers, outside artists submit their songs to the database through an online portal. From day one, Gutstadt says, the music they accepted "had to be cool, it had to be good, whatever genre it is. Whether it's country or rock or indie rock or EDM, we don't take schlock."

Being well-positioned to meet the surge in demand for production music was a lucky break, but the 60-odd musicians, marketers and other creative types working in the company's offices in New York, Los Angeles, Australia, London and Toronto are poised to make the most of the opportunity. Jingle Punks' search algorithm is patented, and a major investment by global talent agency William Morris Endeavor has helped Gutstadt & Co. expand into relationships with Universal Music, as well as with artists they plan to develop in their own right.

To some people's ears, music used expressly for commercial purposes will always be schlock. Their anthem might be Neil Young's This Note's for You ("Ain't singin' for Pepsi/Ain't singin' for Coke/I don't sing for nobody/Makes me look like a joke.") Young didn't foresee a post-Napster world, however, where all but the biggest artists struggle with cratering record sales and minuscule streaming fees.

Jingle Punks has had its songs recorded by artists such as Lynyrd Skynyrd and Dierks Bentley, and Gutstadt is working on making further inroads in Nashville. He wants to launch new artists into the country market—including a white rapper who weighs as much as 450 pounds and goes by the name of Jelly Roll.

Gutstadt's voice perks up when he talks about Jelly Roll, and about his secret weapon in the music production game: CanCon hits like the David Wilcox song Bad Apple, which appears as a sample on one of Jelly Roll's new songs.

"I always joke that Canada is my south—if hip-hop sampled soul music, I'm going to sample Canada. I'm, like, those songs are mine."

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