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I have heard several songs by different artists or bands which are used in their albums as well as in the movies. So sometimes I don't understand whether these songs are made for the films or they are bought by the producers legally after the artists made it for their albums? Do the producers sometimes sponsor the song on the album?

Example 1: "Love Story" by Taylor Swift used in Letters to Juliet movie.

Example 2: "New Divide" by Linkin Park in the end of one of the Transformers movies. (I cant remember exactly which part the song is used in).

So how does the whole procedure work?

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Far as I know off hand, its a case by case basis. Some songs are commissioned for movies, whereas some just get the licensing they need to make the song the 'official' song of a movie. –  TylerShads Nov 28 '12 at 15:10
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For your specific case, T-Swift released Love Story two years before Letters to Juliet was made, so that was probably bought and just a happy coincidence that the subject matter and demographics went together so well –  vastra360 Mar 3 at 3:34
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up vote 9 down vote accepted

There is no hard and fast rule. Sometimes the production will request a song from an artists specifically for the movie. Examples include Celine Dion's My Heart Will Go On for Titanic, and almost every James Bond theme song. Most of the times the production will just license existing songs.

Creating a song specifically for a movie can get pretty expensive, especially when it's by a big name artist. So you almost only see it being done in big budget movies.

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It would be interesting to see what the pay situation is for films that almost act as concept albums. The classic example is The Graduate, with Simon and Garfunkel, but there are lots of modern examples like Daft Punk and Tron, Arcade Fire and Her. Rihanna is even releasing an album centered around a new Dreamworks movie in the next year. –  vastra360 Mar 3 at 3:38
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