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  • Part Two. How Your Songwriting Generates Income.

    In this Part Two of a blog series on songwriting revenue, I discuss mechanical licenses.

    Mechanical Licenses

    A mechanical license gives a record company or other party the right to reproduce your song onto a record. You might negotiate this license directly with the person who wants to record your song. Alternatively, the person who wants to record your song may obtain a compulsory mechanical license.

    The compulsory mechanical license is a creation of the United States Copyright Act. Here's how it works. Once a song has been commercially released, anyone may make another recording of that song and sell copies of his recorded version as long as he pays the song's copyright owner the license fees set by copyright law. In order for a compulsory mechanical license to be valid, the copyright owner must have authorized the commercial release of the song, and the song must be non-dramatic.

    The Copyright Office periodically modifies the compulsory mechanical license rate. The current compulsory mechanical license rate, also called the statutory rate, is 9.1¢ per song per record for recordings of up to five minutes. If the recording is more than five minutes, the rate is 1.75¢ per minute per record.

    Despite the existence of the compulsory mechanical license, most mechanical licenses are in fact negotiated. Many songwriters or their music publishers use the Harry Fox Agency to negotiate and issue their mechanical licenses, and to collect the corresponding license fees. The Harry Fox Agency charges a fee equal to four and a half percent of the mechanical license fees they collect.

  • Upcoming Compulsory Mechanical License Rates

    The Copyright Royalty Board recently released recommendations for compulsory mechanical license rates for the period 2008 through 2012.  The recommendations were the result of a proceeding that has been ongoing all year.

     

    What Is the Compulsory Mechanical License?

     

    Once a recording of a non-dramatic song has been commercially released with the authorization of the copyright owner, anyone may make another recording of the song and sell copies of their recorded version.  You do not need the permission of the copyright owner in order to obtain a compulsory mechanical license.  Your only obligations to the copyright holder of the song are providing notice and periodic accountings and paying the mechanical license fee set forth in the statute.  The compulsory mechanical license rate is periodically adjusted.

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  • Determining Songwriters’ Livelihood with a New Mechanical Royalty Rate


    In previous posts, I’ve commented that while recording artists get the glamour, it is songwriting and the ownership of songs that generate greater revenue within the music industry.


    Songwriters have multiple music licensing opportunities and can often live on royalties from hit songs for decades.  One of the songwriter’s primary sources of revenue – the mechanical royalty – is facing a
    challenge.  Last month, the Copyright Royalty Board began a proceeding to determine the new mechanical royalty rates for songs.

    What’s at Stake?


    The current mechanical license rate is 9.1 cents.  A record label pays mechanical license fees for each copy of a song it distributes.  Cover artists who re-record and distribute previously released songs also pay mechanical license fees.  For a brief introduction to mechanical licenses and how songs generate revenue, see my article Music Publishing: How Your Songwriting Generates Income

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