If you are doing a recording project of music that you intend to sell, you need to know about mechanical licenses. Of course, if you're a songwriter or publisher, and want to get paid properly for your intellectual property, you need to understand mechanicals, too!
In a nutshell, mechanical fees are paid on physical or digital products. This is different from radio play or venue performance fees, which are collected by PRO's - performance rights organizations like BMI, ASCAP and SESAC in the US, SOCAN in Canada, and others in other countries.
Let me address labels, and let's be clear, most indie artists today own their own labels. No matter how small a "run" of your project you print or make available for download, you need to understand the legal and ethical responsibilities you have to the publishers of your songs. Here's a simple summary from the Harry Fox site (Harry Fox is the leading provider of mechanical licenses in the US):
If you are manufacturing and distributing copies of a song which you did not write, and you have not already reached an agreement with the song's publisher, you need to obtain a mechanical license. This is required under U.S. Copyright Law, regardless of whether or not you are selling the copies that you made.
You do not need a mechanical license if you are recording and distributing a song you wrote yourself, or if the song is in the public domain. If you are not sure if the song you are looking to license is in the public domain, and therefore does not require license authority, we suggest you use the search on www.pdinfo.com.
How much does a mechanical license cost?The current US statutory mechanical rights fee is $.091 (9.1 cents) per physical or digital copy. That 9.1 cents is to be divided among all publishers, who then distribute to their writers according to the contract they have with the writers (not the label's responsibility). So if a label want to buy a license for, say, 1000 units... divided as 500 physical plus 500 digital copies, they would divide $91 among all publishers per song on the recording project. In addition, if the license is obtained through Harry Fox, there is a small processing fee for their service.
How do you get these licenses?The record label or label rep is legally obligated to obtain licenses either directly from the song publisher(s) or through the Harry Fox Agency if the song is licensed there. This is the tedious part... the label must contact and obtain mutually signed mechanical licenses from all publishers and co-publishers who own each separate song. Publisher info can be obtained by contacting and asking the writers who their publishers are. If you're an independent songwriter not affiliated with Harry Fox... have a blank custom mechanical license handy that you can fill out with your info and provide a label when you find out they've cut your song! (scroll down to find a custom license with fillable fields!)
When do you need to get these licenses?Before releasing the project! In fact, before recording the songs, labels should make sure the license is obtainable! The potential problem is: publishers have the right to choose who first releases their song. With a new unreleased song, the label needs to get the license to affirm they have permission for first release, or the recording budget for that song could be spent on something that can't be sold.
To recap... The label should pay for a mechanical license for each song before they are sold. The label would estimate how many digital or physical units they would want to sell at first and pay $ .091 per unit per song (for 1000 units this would be $91 per song) to split between publishers.
Information you'll need to collect for each song:
- Writer and co-writer name(s), PRO(s) [BMI, ASCAP, SESAC, etc], percentage(s) and addresses
- Publisher and co-pub name(s), PRO(s), percentage(s) and addresses for where to send payment
Other random FAQ's about mechanical licenses:
- Licensor = Label rep would be whoever represents the record label. Licensee = the publisher of that particular song.
- Yes, you need a license form for each song, even with the same songwriter and publishing co.
- No, the songwriter does not sign the license… the publisher does. The agreement is between label and publisher.
- The label would then pay the publisher the mechanical license fee.
- How the songwriter gets paid... if contractually obligated, the publishing company will split mechanicals with the songwriter, according to the contract they have between them. This is not the label's responsibility; it's the publisher's.
Need A blank custom mechanical license?When a record label approaches me concerning one of my songs, I give them any co-publishing information so they can contact those publishers, and I use a custom license from my own publishing company. I got the following form from an independent record label, and created a fillable form you can download here:
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