How to Legally Sell Downloads of Cover Songs

by adamr |

Firstly, let us say that if you are planning to sell a cover song, CD Baby has partnered with Loudr to provide the quickest and most convenient way to secure mechanical licenses. Loudr makes cover song clearance easy without expensive lawyer fees and complicated paperwork.

But if you’d like to handle the the process on your own, follow the steps below:

Please note that the below is not official legal advice, we are not your lawyers, and you should always contact your attorney before entering into any contract such as a license.

If you have recorded a cover version of someone else’s song, and you plan to make that recording available over the Internet, the following information applies to you.

You must follow these steps BEFORE you make your recording available for distribution to the public!

If you record a cover version of a song, (meaning your performance of a song that has been released in the U.S. with consent of the copyright owner), you are entitled by law to release your recording commercially, and the owner of the copyright to the song cannot prevent you from doing so.

The Copyright Act provides for what is called a “Compulsory License“, which means that if you follow the steps set forth by statute, you can distribute your recording of that song on a CD or over the internet.

The following details the procedure for individuals to obtain a compulsory license to digitally distribute cover songs over the Internet to end users in the United States.

Identify the Copyright Owner – the publisher

The first step is to identify the owner(s) of the copyright to the song. The publisher.

The easiest way to do this is to search the song writer/publisher databases, here:

Keep in mind that the owner of these rights is typically a publisher, and that the owner of the rights in the song is not the same as the owner of the rights to any particular recording of the song. In other words, Record Labels are almost never the owners of the copyright to the musical composition – they typically own only sound recordings. You should be looking for the name of a publisher (or in some cases an individual).

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Be careful to identify the exact song you want, as there are many songs with the same names. If you cannot find the owner through these websites, search the records of the Copyright Office online.

If you cannot find the copyright holder(s) after a thorough search, you can hire the U.S. Copyright Office to do a search for you.  But it is expensive, currently $165 per hour, and you must register the request online – http://www.copyright.gov/forms/search_estimate.html

Instructions on how to do that are on “Circular 73” from the U.S. Copyright Office, on a PDF file, here: copyright.gov/circs/circ73.pdf. WE STRONGLY RECOMMEND DOWNLOADING AND READING THIS FILE, because it carries the essence of this entire article.

Send a Letter of Intent – EXACTLY like this:

You must send one letter for each song for which you seek a compulsory license 30 days before you begin distribution of your downloads. The letter must be sent by registered or certified mail and contain the following:

  1. a clear subject line/title that says “Notice of Intention to Obtain a Compulsory License for Making and Distributing Phonorecords“
  2. your full legal name
  3. all fictitious/assumed names (stage name, band name) used
  4. the names of each individual owning a 25% interest or more in the distribution of the song (band members, if you split your sales income)
  5. your fiscal year (usually January 1st – December 31st)
  6. your full physical address – P.O. boxes are unacceptable, unless that is the only option for addresses in your geographic region
  7. the title of the song
  8. name(s) of the author(s) of that song
  9. the type of configuration expecting to be made (a music file distributed over the Internet is called a “Digital Phonorecord Delivery” (DPD))
  10. the expected first date of distribution
  11. the name of the performer/band doing the cover
  12. your signature.

If there is more than one publisher listed, sending a letter to one of them is sufficient for the compulsory mechanical license; however, if one or more of the copyright holders is not from the United States, it is best to send the notice to all copyright holders.

Send Royalty Statements and Pay Royalties

Once you begin distributing the song over the Internet, you must send monthly statements of royalties on or before the 20th of each month, and pay the royalties.

The monthly statement must be sent by registered or certified mail and include:

  1. a clear title that says “Monthly Statement of Account Under Compulsory License for Making and Distributing Phonorecords“
  2. the period (month and year) covered by the statement
  3. your full legal name
  4. all fictitious/assumed names (stage name, band name) used
  5. the names of each individual owning a 25% interest or more in the distribution of the song (band members, if you split your sales income)
  6. your full physical address – P.O. boxes are unacceptable, unless that is the only option for addresses in your geographic region
  7. the title of the song
  8. name(s) of the author(s) of that song
  9. the name of the performer/band doing the cover
  10. the playing time (length) of your recording of the song (minutes:seconds)
  11. the number of DPDs made, i.e. how many times your recording was downloaded
  12. the number of DPDs that were never delivered due to a failed transmission
  13. the number of DPDs that were retransmitted in order to complete/replace an incomplete/failed delivery
  14. the total royalty payable (number of total DPDs, not counting ones never delivered multiplied by the statutory royalty rate (see below))
  15. the following statement: “I certify that I have examined this Monthly Statement of Account and that all statements of fact contained herein are true, complete, and correct to the best of my knowledge, information, and belief, and are made in good faith“
  16. your signature

You must also send an Annual Statement of Account at the end of each calendar year, which is virtually identical in content to the Monthly Statements, but must be certified by a licensed Certified Public Accountant (CPA).

Statutory Royalty Rates

The current (2006) statutory rate for royalties is 9.1¢ for every copy sold if the playing time for the song is under five minutes.

If the playing time for the song is longer than five minutes, the rate is 1.75¢ per minute, rounding up to the next minute.

  • under 5 minutes = 9.1¢ per copy
  • 5 to 6 minutes = 10.5¢ per copy (6 minutes x 1.75¢)
  • 6 to 7 minutes = 12.25¢ per copy (7 minutes x 1.75¢)
  • 7 to 8 minutes = 14.0¢ per copy (8 minutes x 1.75¢)
  • etc.

The Copyright Office can always keeps the most up to date information concerning statutory royalty rates at this link: http://www.copyright.gov/carp/m200a.html

DIY Musician

IMPORTANT Notes:

Remember the law is on your side. You are entitled to a compulsory license by law. You have permission – (a compulsory license) – as soon as you send the notice, described above, to the proper publisher.

As long as your notice complies with Copyright Section 115, (described above), the publisher need do nothing other than receive the royalty payments. You don’t even need to wait for their reply.

Other Notes:

You may be able to negotiate a better deal for yourself, either with lower royalty rates or less frequent statements of account. If terms are negotiated which deviate from the standard Section 115 then a mechanical license will be issued by the publisher.

For more information on compulsory licenses for all forms of distribution, please refer to the Copyright Office’s web site, at copyright.gov, and contact your attorney.

Helpful publications available through the Copyright Office include Circular 73 (Compulsory License for Making and Distributing Phonographs), Circular 75 (The Licensing Division of the Copyright Office), and M-200 (Checklists under Section 115 of Title 17).

If you have been distributing a cover song without a compulsory license or an agreement with the copyright owner, you are ineligible to obtain a compulsory license for that recording (!), and you may be subject to civil and/or criminal penalties for copyright infringement.

Be careful to follow the steps exactly as described above, in order to be legal.

Download and print/save these files:

These and more available at the U.S. Copyright Office website: copyright.gov

Experts that can help you:

Since this part of music is business and law, (not art), nobody listed below can help you for free, but all have offered their expert services at musician-friendly rates to help you with this topic.

  • C. Christopher Clark, Esq.
    Shumaker, Loop & Kendrick, LLP
    128 S. Tryon Street, Suite 1800
    Charlotte, North Carolina 28202
    (704) 945-2152
    cclark@slk-law.com
  • Richard D. Rose – Attorney
    9 Music Square South, 3700
    Nashville, TN 37203
    615-330-7673
    richard@copyrightcafe.com
  • Joyce Dollinger
    Dollinger, Gonski & Grossman
    One Old Country Road, Suite 102
    P.O. Box 9010
    Carle Place, New York 11514-9010
    (516)747-1010
    jsydnee@aol.com

DIY Musician

Get Your Cover Song Selling Online at iTunes and CD Baby!  Click HERE