This information has been provided by our friends at Limelight, one of CD Baby’s partner companies that helps independent artists easily obtain the required mechanical licenses for cover songs without expensive lawyers or complicated paperwork.
Why is licensing necessary?
Just like you need a license to drive a car, fly an airplane, or sell real estate – it’s the law! Copyright Law requires artists and labels to obtain a mechanical license before distributing a recording containing any song/composition they didn’t write.
What’s a mechanical license?
A mechanical license is a broad term that refers to the reproduction – for distribution or sale – of a musical composition in the form of a sound recording. Any time you reproduce and distribute a recording of a composition you do not control – including through physical and digital means – you need a mechanical license. Mechanical licenses are issued by the owner or controller of the composition in question. Typically, these are publishers acting on behalf of songwriters or composers. Some agencies represent many US publishers for mechanical licensing, although there are US publishers who are not represented by agencies and must be licensed directly.
Who gets the money?
There are two fees involved with Limelight – the $15 per license service fee (which is discounted as you clear more songs or configurations), and the publishing royalties. The publishing royalty is a statutory rate set by law at 9.1¢ per unit for all recordings up to 5 minutes, and 1.75¢ per minute if a track is over 5 minutes in length. Limelight pays out all royalty fees to the respective song- writers and/or publishers for the composition(s) for which you are receiving a mechanical license.
How does this work for physical CDs?
For each physical CD manufactured that includes the cover song material, the royalties owed correspond to the statutory rate of 9.1¢ per pressing per song. For instance, if you were to manufacture 1,000 CDs of an album containing two cover songs, the royalties owed would be $182 (1,000 CDs x 2 songs x 9.1¢ per song).
How does this work for digital?
The same statutory rate that applies to physical CDs also applies to digital downloads (also known as DPDs). For digital downloads, the royalties are calculated on the actual amount of downloads. For instance, if your album included 2 cover songs and was downloaded 500 times, the royalties owed would be $91 (500 album downloads x 2 songs x 9.1¢ per song). Additionally, if your cover songs are available as singles, the same rate applies to all downloaded single tracks of the song.
What if I’m doing short runs?
The minimum number of physical pressings that Limelight will license for is 25. The same minimum applies to digital downloads.
What if we don’t plan to sell the CDs?
If you are giving away CDs, downloads, etc. you will still need a mechanical license and will be required to pay mechanical royalties for all physical units manufactured and all digital units distributed.
What does public domain mean?
The public domain generally includes works that are ineligible for copyright protection or whose copyrights have expired. Songs or musical works first published in 1922 or earlier are in the public domain in the U.S.
How do I figure out if a song needs a license?
PD Info Online is a good starting point to determine if a song falls into the public domain.
Can a mechanical license be withheld? Can a copyright owner decide they don’t want their work available to be recorded by anyone else?
Under Section 115 of the Copyright Act, anyone is entitled to record a song which has already been released publically by another artist, irrespective of a copyright owner’s permission. This type of license is referred to as a compulsory mechanical license, and is obtained by submitting to the copyright owner a Notice of Intent to Obtain a Compulsory License and abiding by Section 115 licensing and accounting regulations.
What constitutes a “copyrighted arrangement” for a song in the public domain?
A copyrighted arrangement consists of a version of a public domain song including changes or alterations with at least a minimum amount of creative musical expression. Sometimes, this can be difficult to determine. An excellent rule of thumb: if you used sheet music to learn it, you can find the copyright information there.
Is it legal to change the lyrics to a popular holiday song (or any song) and record our “revised” version? How would we go about getting permission to do something like that?
Changing the lyrics to a song constitutes a derivative work, which requires direct permission from the music publisher. If you are interested in contacting a particular publisher for permission to record a derivative work, songwriter and publisher contact infor- mation can often be found by searching the song databases on ASCAP, BMI, or SESAC’s websites.
What does RightsFlow do?
RightsFlow provides artists and record labels with an end-to-end solution for the licensing, accounting, and payment of mechanical publishing rights. RightsFlow acts as an agent on behalf of its clients and acquires licenses from music publishers of all types. These licenses include physical reproduction (i.e. CDs), permanent digital downloads (via CD Baby and iTunes), ringtones, and interactive streaming and conditional downloads (e.g. Rhapsody). RightsFlow handles the entire licensing process as well preparing quarterly royalty reports and administrating payments to publishers.
In short, RightsFlow simplifies copyright licensing, and our core service is mechanical licensing and royalty reporting. Limelight and MySpark are the two consumer-facing services powered by RightsFlow. Limelight is a one-stop online tool that allows anyone to clear cover songs quickly and easily. Through Limelight, artists, bands, ensembles, and other groups can get mechanical licenses which allow those groups to manufacture, distribute, and sell recordings of compositions owned or controlled by a third party publisher. MySpark provides creators (e.g. songwriters) with an easy online way to register and protect their intellectual property.
Who are RightsFlow’s clients?
RightsFlow serves over 16,000 clients, including marquee companies such as YouTube, Rhapsody, Muzak, The Orchard, INgrooves, Wolfgang’s Vault, Thumbplay, Guvera, Dada Entertainment/Play. ME, Scattertunes, [PIAS], Alliance, Kontor New Media, Zynga, Beatport, Zebralution, E1 Canada, CD Baby, Disc Makers, Qello, REBEAT, and X5 Music Group.