Music Business 101 - Licensing

Desire Inspires

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Mechanical Licensing

Link: The Music Bridge :: Compulsory Mechanical License Information

Copyright law states in effect, that, as long as a song hasbeen commercially recorded and released by a music publisher(s), other parties/artistscan record and commercially release their own "audio-only" version ofthe song, as long as you account for payments of each copy to the publisher(s)at time of initial manufacture, plus every quarter thereafter for additionalunits. Because you can do this yourself in most cases, here is some freeinformation to get you going.


1. You need to obtaina mechanical (aka compulsory) license to record and release your cover of asong. Mechanical licenses can be obtained from the Harry Fox Agency for mostsongs.

2. Go to songfile dotcom and follow their instructions. The Harry Fox Agency (HFA) maintains thissite, which is specifically set up for indie projects and now has a newlylowered initial 25 unit minimum (announced 1-15-08 and reduced from 500 units)and a2500 unit maximum. This is for audio only CD's as well as DPD's (digital downloads).You can always revisit the site and pay for more units/cd's later as youmanufacture them. They accept credit cards as well as a new electronic checkpayment option.

Simply visit the site, create an account, search HFA'scatalog of almost 1.9 million songs and complete their mechanical licensingtransaction easily and quickly. Royalties are calculated at the statutorymechanical rate, which is currently 9.1 cents per copy for songs 5 minutes orless. There is also a small processing fee on each song licensed. If a userjust wants to conduct research, there is a separate Song file public searchtool on the Web site free of charge.

3. If the song youare looking fordoes not show up on the Harry Fox website, or shows up with somepercentage less than 100% (which means that not all publishers arerepresented), then search the databases at ASCAP, BMI, and SESAC and contactthose publishers directly.

4. If you still are unable to find the information you need,please feel free to give us a call at The Music Bridge, and we can then discussproviding clearance services for you for those hard to find copyrights that youcannot complete mechanical licensing on yourself.
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1. "Mechanical license" is not the same thing as "compulsory license". A "mechanical license" is a "compulsory license" because the copyright owner is "compelled" by law to allow you to cover their song. But it does not only apply to mechanical licenses.

The "compulsory license" requires the copyright owner to allow the recording of the cover version in return for paument of a "statutory rate" which is determined by law... this amount changes periodically... it is around $0.09 per copy of the song now... meaning that if you make 100 copies of your cover version, you must pay the copyright owner $9.00.

A "mechanical license" refers to recording your cover version and making physical copies of it (which includes digital copies that aren't technically "physical")... It refers to the "mechanical reproduction of the recording"-- the "mechanical license".

You can obtain a "mechanical license" without using a "compulsory license"... you can negotiate directly with the copyright owner and agree to pay a "half rate" or "3/4 rate", etc, or negotiate to report royalties to him annually, etc, etc... when you do this, you are not using the "compulsory license"... if the copyright owner refuses to negotiate with you, they can't stop you from recording the cover version of the song. This is when you use the "compulsory license"... you just pay the full statutory rate.

2. The "compulsory license" does NOT apply to "sampling"... if you sample any part of the song (or any song), you must get permission from the copyright owners ("owners" with an "s" because with sampling, there are two rights involved: the "sound recording" and the "composition" recorded in that sound recording)...

You must get permission and the copyright owners can legally prevent you from using the sample and they can charge you whatever price they want... they can charge you $1million dollars and say they want 100% of the ownership of your song... there are no limits.

3. For a "compulsory license", you can't change the song. You can't change the general melody, lyrics or the essence of the song... you can do your own arrangement and artistic interpretation of the song, though... but it still must be "that song".

For example, you don't have a "compulsory license" to take the hook of someone else's song and drop it into your new song.

And you can't take someone else's song and just take their melody and change all the lyrics, or vise versa.
As far as licensing when it comes to beats. I mean, what i'm really wondering is CAN A PRODUCER make up his own rules as far as leasing/selling a beat to a guy. I mean, i was thinking that if you have it so the artist who want to purchase the beat can choose what he gonna use his beat for.. you know with a, Single - Mixtape - Album or Promo "License". That way you can control prices and make sure you don't loose money if some bigshot rapper pick something up..

Lets say you set it up like this :
- Single: Sell Up to 5000 copies on streaming & cd's, (everything after that, 50% goes in producers pocket) Performing song: 15% off artists performance paycheck, if he perform the song you produced.
- Album: Sell up to 5000 copies on streaming & cd's. After that, 50% of the one track produced. (1%of12tracks.)
- Mixtape: Unlimited copies, beat is not tracked out, nor is it exclusive which means it will continue to get sold.
- Promo: Same as Mixtape but just no sales allowed, and the beat doesn't continues to get sold.

I don't know.. i'm just thinking out loud... is it possible to change the rules of how many copies sold and so on? and how do the producer get to that information so nobody breaks the contract made.


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Yes, as a producer you have the right to write and have the artist sign any contract you want, as long as it is agreed upon.


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Good! Very good article!

But I'm still have a question: For example, i sell beats using instant delivery store. Singer/rapper has bought my beat. My non-exclusive includes distribution in 2000 copies, but this singer or rapper has sold more copies than 2000.
What i should do?


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nice info bro! thanks! i have a question about nonesclusive leasing. It's a limited license that the artist will be allowed to distribute his record for a time. well, when this time got over! how do i will know this, and how do i can check it? thanks