Music Business Lessons (Courtesy
Berklee Press)
Rules of Compulsory Licenses
By George Howard
Here's how it works. You may record someone else's song on your own record
if:
-
It has already been commercially released
on a record.
-
You pay the song's copyright holder (the
writer and/or publisher) a fee -- a mechanical royalty based on the
"statutory rate." That rate is currently 8.5˘ for songs under five
minutes long. It increases periodically.
-
You pay this fee for every recording you
manufacture on a fixed medium (such as CD, cassette, or vinyl), whether
you sell the recordings or give them away for promotion, etc.
-
You pay 8.5˘ per song. So, if you use
four songs by the same writer, you must pay 34˘ per CD made.
-
You pay the copyright holder of this song
every month.
If these rules sound a bit harsh, put the
shoe on the other foot. When someone uses one of your songs on their album,
think of how it benefits you to have them held to the above standards.
The only way around these compulsory license laws is to negotiate a "rate"
with the copyright holder to change some of the above terms. Should the
copyright holder not want to negotiate with you, you must adhere to the
rules. Record labels almost always negotiate a rate with publishers and/or
songwriters to avoid paying the full 8.5˘ per song, as well as some of the
other more odious requirements, such as paying the publisher/songwriter
every month. (Typically, labels pay only 75 percent of this compulsory
statutory rate. Usually, they account twice a year.)
Though the compulsory license law is rarely followed to the letter, it still
sets the critical guidelines that keep the system flowing. Additionally,
just because it is rarely used doesn't mean that it can't be. If you really,
really want to record a version of someone else's song, and they won't
negotiate a rate with you, you can still record it. You just have to adhere
to the rules of the compulsory license law. The law is intended to keep
songwriters and publishers from monopolizing their songs.
As a songwriter, you must understand how mechanical and compulsory licenses
work. They will affect you every time you have a song on a record, whether
you perform the song or someone else covers one of your songs. Either way,
you are entitled to money from the label that releases the record. It is
often the only money that songwriters ever see.
Excerpt from Music Publishing 101
©2004
Berklee Press Used by Permission
Back to
Berklee Music Business Lessons |
