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Another example : Let’s say three separate bands record the song “Yes-
terday.” We still have only two properties : three of one kind : the “sound
recordings,” and one of the other kind : the “composition.” To sum up, we
have the “composition” and we have the “sound recording” of the “compo-
sition.” Two separate properties.
intellectual property
These kinds of property are called “intellectual property.” Other kinds
of intellectual property are books, movies, paintings and so on. And, as
mentioned earlier, these properties come with rights. The particular right
you have to your “sound recording” and the particular right the Beatles
have to the “composition” is called a COPYRIGHT. A copyright is the right
to reproduce or make copies. This right is granted by the United States
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Copyright Law and similar laws in other countries. If you would like to
learn more about the United States Copyright Law, please go to:
http://www.copyright.gov/circs/circ1.html#wci
Only the owner of the song has the right to reproduce or make copies of
his or her song. The owner also has the right to grant permission to others
to reproduce or make copies of his or her song. So, before you can record
and make copies of someone else’s song, you need to get permission from
the owner. You get that permission by getting a license, just like you get
permission to drive by obtaining a driver’s license.
publishing companies
A word about music publishing companies and the ownership of songs
- The songwriter is the owner of the song. But most songwriters do not
look after the rights to their songs. Issuing licenses for the use of a song,
collecting the royalties, accounting, etc. is a lot of work. This kind of work
is called administration. In most cases, songwriters have music publish-
ing companies do this administration for them. But in many cases, the
songwriter sells the song to the music publisher. In this case, of course,
the music publisher is the owner of the song and the rights that go with it.
But whether the music publishing company owns the song or administers
the rights to the song on behalf of the songwriter, the music publishing
company will issue the mechanical license.
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who gets paid
For every copy sold, the songwriter or publisher must
be paid. The amount required to be paid for the sale
of each copy of a “composition” is called the mechani-
cal royalty. The royalty rate is established by the
Copyright Royalty Board of the Library Of Congress;
a government agency empowered by Congress to de-
termine the royalty rate. The royalty rate set by the
Copyright Royalty Board is called the “statutory rate.”
Statutory is a fancy legal word meaning required by law. So, the rate set
by the Copyright Royalty Board is the statutory mechanical royalty rate.
The current statutory mechanical royalty rate that must be paid to the
song owner or publisher is 9.1 cents ($.091) per copy. When you record
a cover song, every time that recording sells, you owe the songwriter or
publisher 9.1 cents. All mechanical licenses will specify this rate. Some-
times the rate is specified in pennies; otherwise the license will specify the
“statutory rate.” In some cases, you can negotiate with the songwriter or
publisher for a lower rate, but unless you can demonstrate that you will
have enormous sales, the likelihood of getting a lower rate is slim. Finally,
the rate does not remain static or permanent. In fact, as I write this in
February 2008, the Copyright Royalty Board is considering a change in the
statutory rate.
compulsory licenses
A word about the “Compulsory License.” You may have heard of some-
thing called a “compulsory license.” The U. S. Copyright Law allows you to
get a “compulsory license” in lieu of getting a mechanical license directly
from the publisher or songwriter. But this method is a lot more work. Us-
ing this method entails specific requirements for notifying the song owner
and stringent requirements for accounting. And you will still pay the full
statutory mechanical royalty rate. It is not recommended that you try this
method. The best and easiest way to get a mechanical license is from the
songwriter or the publisher directly.
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synchronization licenses
We hope that’s clear, but we’re not quite
done. Now, let’s say you want to make a vid-
eo of your recording of “Yesterday.” You’ll
need another license. This license is called
a “synchronization license.” This “synch li-
cense” gives you the right to synchronize the
“composition” (song) with visual images. The
synch license also contains the same right
as a mechanical license; the right to make copies. But the synch license is
not a substitute for a mechanical license. The only reproductions or cop-
ies you can make with a synch license are copies of your video containing
the “composition.” And, depending on how you want to use the video,
you may be restricted as to how many copies you can make. For instance,
if you want only to have your video broadcast on TV, the internet,
cell phones, etc., you may be restricted to making copies for just that
purpose. But if you also want to sell your video over iTunes or anywhere
else, you must have that right specified in the license. A synchronization
license is a lot more fluid and flexible than a mechanical license, so when
you get one, be sure you know what you want to do with the video and
make sure you ask for those rights to be included in the license.
You get a synch license the same way you get a mechanical license. You
must contact the publisher or songwriter. There is no set royalty rate for
a synch license. It is all negotiable between you and the songwriter or
publisher. You can negotiate to pay a one time up-front fee or pay a roy-
alty. The royalty rate will be the amount agreed upon between you and
the publisher for the sale of each copy. In some cases, you may have to
pay both an up-front fee and a royalty, or an advance against future royal-
ties and subsequent royalties once the advance is paid off. It all depends
on your negotiations with the publisher.
The mechanical right, the synchronization right; these, along with others,
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like the reprinting of lyrics, are called publishing rights. This is music
publishing.
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