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!
NOTE: If you'd like a PDF or Word doc of the blank custom mechanical license I use, just request it in a comment with the email you want me to send it to.
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 $91 per song) to split between publishers.
Information you'll need to collect for each song:
- Writer and co-writer name(s), PRO(s) [BMI, ASCAP, SESAC, etc], percentage(s) and addresses
- Publisher and co-pub name(s), PRO(s), percentage(s) and addresses for where to send payment
Other random FAQ's about mechanical licenses:
- Licensor = Label rep would be whoever represents the record label. Licensee = the publisher of that particular song.
- Yes, you need a license form for each song, even with the same songwriter and publishing co.
- No, the songwriter does not sign the license… the publisher does. The agreement is between label and publisher.
- The label would then pay the publisher the mechanical license fee.
- How the songwriter gets paid... if contractually obligated, the publishing company will split mechanicals with the songwriter, according to the contract they have between them. This is not the label's responsibility; it's the publisher's.
What does a typical custom mechanical license (not Harry Fox) look like?When a record label approaches me concerning one of my songs, I give them any co-publishing information so they can contact those publishers, and I use a custom license from my own publishing company. I got the following form from an independent record label:
ONE-TIME FEE CUSTOM LICENSE
License Date: x/xx/xxxx
name of record label rep name of writer, c/o name of pub company
city, state, zip city, state, zip
The Composition(s) covered under this License, as well as the total amount due per song per use, are listed in the table below.
|Song Title||License Type||Units||Publisher[s](%)||Total Licensor %||Net Rate||Amount|
|Name of song||Mechanical||???physical copies,|
??? digital downloads
|Names of all|
for this particular licensor
|Total Amount Due||$xxxx|
Label copy/Copyright notices for each Composition:
Title of song, writers and co-writers
(c) Copyright xxxx. Names of publishing companies All rights reserved. Used by permission.
License Provisions/General Rights For All Uses:
1. In connection with your exercise of the right and license granted herein, you shall have the right to make a musical arrangement of the Composition(s) to the extent necessary to conform the Compositions to the style or manner of interpretation of the performance and/or publication involved, provided however, that any such arrangement shall not change the basic melody or the fundamental character of the Composition(s). You hereby transfer and assign to Publisher(s) all rights, title, and interest in and to any such arrangement.
2. Licensor hereby warrants and represents that it possesses full right and authority to grant the rights and license herein described for the percentage of each Composition owned or controlled by said Licensor. Licensee warrants and represents that it is the rightful owner or lawful assignee of the owner of the master recordings, if any, to be made and distributed pursuant to this license.
3. In the event that you fail to pay royalties to Licensor on all copies manufactured and fail to remedy such default within thirty (30) days after written notice given to you by certified or registered mail, this agreement and all rights herein granted shall automatically terminate and such termination shall render either the making or distribution of copies of the product(s) for which the royalty has not been paid actionable as acts of infringement under the United States Copyright Law.
4. This license is limited to the rights expressly granted herein and does not authorize any use of the aforesaid musical Composition(s) not expressly set forth herein. By way of illustration, but not limitation, this license does not include the right to change, arrange or adapt the lyrics or music, or alter the fundamental character of said musical Composition(s) or to use the title thereof as the title or sub-title of the product(s).
5. You agree to identify the Composition(s) on your project as detailed in this license.
6. Licensor shall have the right to inspect and audit your books and records relating to transactions involving the rights granted herein upon reasonable notice.
7. All rights not herein specifically granted are reserved by Licensor. All rights granted here in are on a non-exclusive basis.
8. The Territory covered by this license is the United States only.
9. If Licensor license less than 100% of a composition to you, it means that there are other owners of the composition that Licensor does not represent. It is your responsibility to secure permission from these publishers directly.
10. The term of this license shall be a one-time manufacture and eventual distribution of the number of units stated herein. Upon the expiration of this license, all rights herein granted shall cease and terminate, and the right to make or authorize any further use or distribution of the product(s) made hereunder shall cease and terminate.
11. This agreement shall be binding upon the heirs, legal representatives, successors, and assigns of each of the parties hereto. The rights granted herein may not be transferred or assigned by you to any other party without written permission from Licensor.
12. This license constitutes our entire agreement and cannot be modified except by written instrument signed by both parties. This license shall be construed and interpreted by the laws of the state of Tennessee applicable to agreements wholly to be performed therein.
Mechanical License Provisions (if applicable):
1M. You are hereby granted the non-exclusive right and license during the term of the United States Copyright in the Composition(s) to make and distribute the following phonorecords embodying a single performance of the Composition(s):
2M. As used in this agreement, all terms and phrases, including the word "phonorecord" and the phrase "made and distributed" shall have the meaning ascribed thereto in the United States Copyright Law and the regulations properly adopted in connection therewith, unless otherwise specified or defined herein.
3M. For phonorecords manufactured and distributed in the United States the royalty rate payable is the statutory mechanical rate.
By signing below, you agreed to abide by all of the terms of this agreement.
NEED A LICENSE?
If you would like a blank copy of a mechanical license as an MS Word doc or PDF, let me know where to email it.
Creating a win-win situation for the artist/label and the writers/publishers keeps great music rewarding for all. Understanding mechanical licenses for music projects is information every record label, songwriter and publisher should have. If anyone has any other questions or can offer any other information about mechanicals, I welcome your comments!
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