Oh my! - Royalties & licensing fees for CDs: Free, Archival & Unreleased.

[NorseHorse]

OK, so this is another "legal dealing for remotesters", but I think it warrants its own thread.

I recently recorded a group who was worried about giving CDs to their members because of royalties to the composers. I know it's common practice for performers to have the "right" to hear their own performance without paying fees, but I've never read this in writing. So I have some questions that I'm hoping someone can answer definitively...

1. Do "archival recordings" require paying any royalties?
2. Do "unreleased recordings" distributed among performers (and/or families) require royalties?
3. Do "free recordings" that are distributed to promote an organization and/or thank donors and patrons require royalties?

Obviously, a "commercial recording" requires having your royalty ducks in a row, but what about the other situations? Are royalties and licensing fees synonymous?

Steve (and others), do you have any links that are "How to arrange royalties and licensing fees." for those that haven't done it before?

Thanks! - CBA

[John Hedger]

I have no idea about royalties for those situations, but I think I read somewhere recently where ASCAP will soon be hitting people up with fees for whistling a copyrighted tune in the presence of another human being, or perhaps even billing anyone who even has a fleeting thought about a copyrighted tune! These newly inflicted fees will hopefully bailout the music industry as we know it, and put them back into better financial balances.

[Corran]

After discussing it with a professor at school who taught the class "Copyright in Music," as I understand, a one-CD copy of a performance for archival purposes is completely legal and requires no royalty except the one payed initially for the performance if it cost to get in.

As far as I understand personally about your other points: anything that is given away freely (as in, no money is made) is legal. Once someone makes a profit on the CDs does legality come up. Recording fee doesn't count because you aren't selling the music, just your service.

Of course, one professor told me in another class that anything smaller than a couple hundred CDs is probably not worth ASCAP's time and therefore you shouldn't worry about it...

[John Willett]

I'm not sure about 1 & 2 but the answer to 3. Do "free recordings" that are distributed to promote an organization and/or thank donors and patrons require royalties? is a definite "yes".

I recorded some CDs recently and there were all being given away as part of an educational project.

It was all declared to MCPS and royalties paid. The royalties were, however, quite small compared to what they would have been if it were a commercial release.

[Harvey Gerst]

Originally Posted by Corran

As far as I understand personally about your other points: anything that is given away freely (as in, no money is made) is legal. Once someone makes a profit on the CDs does legality come up. Recording fee doesn't count because you aren't selling the music, just your service.

Of course, one professor told me in another class that anything smaller than a couple hundred CDs is probably not worth ASCAP's time and therefore you shouldn't worry about it...

On your first point above:

"Copyright" means just that, the right to copy an intellectual property that belongs to someone else. If you copy it (and even give it away for free) you still owe the copyright holder the royalties due. You don't have the right to copy someone else's intellectual property; that's what the copyright is all about. It's about who has the right to copy an intellectual property.. That right belongs to the author of the work, period, or to his assigned representative (i.e., his publisher).

As to your second point, your professor is probably right; a few hundred is probably under the radar.

[ghellquist]

Be sure to differentiate between the different rights here:

A - there is a set of copyright that only applies to the actual music (and words). The rights organizations (NCB over here in Scandinavia) most often can allow you to make recordings. It is generally a very small fee for a give-away record, it might even be waivered. But there are caveats:
- do check the conditions if you rent material, eg parts for the musician. Often these comes with conditions that recordings are not allowed.
- do check that the music has previously been released on record. Most often this means that the composer har transferred some of his rights. If not, do get the permission from the composer directly.

B - there is a specific set of rights pertaining to the actual performance, that is to the person(s) beeing heard in the concert or whatever. It is generally a good idea to get permissions from the performers beforehand. Some "stars" do not want to made known by less than perfect performances which we should respect.

C - there is a third set of rights to the actual recording, the "sound". If you do the recording you start out having this right.

To answer the question:
1 - as long as they stay only in the archive, I would only ask for permission from the performers.
2 - according the rules, here you need to pay the recording fees but who would know?
3 - yes, get all the permission and pay the fees.

Gunnar

[Corran]

Okay I guess I was wrong about the "free" stuff! My bad. I haven't had any CD jobs for free release myself.

[bove]

Regarding Q#3... If you are only distributing a small number of units, contact the rights-holder directly. They might be perfectly happy with a few copies of the recording as "payment"... instead of the minuscule amount of money you'd be required to pay them under a compulsory mechanical license.

[kstrauss]

Originally Posted by NorseHorse

OK, so this is another "legal dealing for remotesters", but I think it warrants its own thread.

1.Do "archival recordings" require paying any royalties?

No. this falls under fair use. The performing organization or venue will pay ASCAP/BMI/SESAC fees which is generally understood to include archival recordings

Originally Posted by NorseHorse

2. Do "unrealesed recordings" distributed among performers (and/or families) require royalties?

Generally no, though this is possibly a grey area. It should pass the fair use test in that unreleased recordings do not affect the market value of the composition(s). In other words, giving friends/family/participants a copy will not have an impact on sales of commercial CDs containing the composition(s)

Originally Posted by NorseHorse

3. Do "free recordings" that are distributed to promote an organization and/or thank donors and patrons require royalties?

Yes. An argument can be made that distributing free copies of a recording will have an impact on the fair market value of compositions included on the CD. Though if it's a small number of persons, it could be considered to be covered by point 2 above.

Originally Posted by NorseHorse

Obviously, a "commercial recording" requires having your royalty ducks in a row, but what about the other situations? Are royalties and licensing fees synonymous?

They are not the same. Licensing fees are paid by a recording artist or record label to the publisher of a composition for the right to use it on a recording, film, TV show, etc. Royalties are paid (in the case of music) to the recording artist and/or composer by the record label and/or publisher based some kind of contractual agreement.

Originally Posted by NorseHorse

Steve (and others), do you have any links that are "How to arrange royalties and licensing fees." for those that haven't done it before?

Royalties will generally be specified by some kind of a contract between an artist and an organization expoliting the artist's creation. So it is unlikely that you or any of your clients (unless they are a record label) will have to arrange for royalty payments. Licensing fees can be done through the Harry Fox Agency, who represents just about every work ever composed, or directly with the publisher. Harry fox is very simple, if you are producing fewer than 2500 copies of a disc you can pay the licensing fee online with a credit card.

[sonare]

In the US, the Harry Fox Agency handles mechanical license payments ("copyright payments" or "royalties") for many publishers. Their website is

Harry Fox Agency HFA

You may come away a little confused but hopefully better informed. YMMV outside the US.

I always tell clients they are legally and morally obligated to pay unless it is Public Domain material. And for added incentive, most (if not all) pressing plants require evidence that mechanicals have been paid before replication. Big Brother is watching them very closely-- read about this outfit:

Audible Magic RepliCheck | Automate Anti-Piracy Compliance

Rich

[NorseHorse]

Thanks for the helpful link!

Are there any other sites we should know about?

An update on the group from the original post: we've printed twenty-one CDs plus two for the living composers on the program. Mechanical royalties would equal less than twenty-five cents, so they'll probably appreciate the CD(s) a little more. The group was in correspodence with them for a while, but I can't recall whether one or both was commissioned.

[JEGG]

Originally Posted by Corran

As far as I understand personally about your other points: anything that is given away freely (as in, no money is made) is legal.

I don't know how anyone would ever come to this conclusion.

As a generality, this is absolutely not true. The reality, at least in the US, is considerably more complex. You do not always have the right to give away recordings. And depending on the repertoire and or performers, you rarely have the right to give away, distrubute by any means, or broadcast recordings.

Additionally, you don't have any assumed right to record performances, and this also has nothing to do with whether there are any fees charged to anyone for anything. Often, it also has nothing to do with performer(s) consent.

There are issues with performers, issues with repertoire, and issues with performance spaces, and issues with composers' and performance rights and labor organizations. They all interact and they are all independent.

To make a blanket statement about everything being fine if so money is exchanged is absurd.

[Corran]

Yeah I already retracted my statement.

[NorseHorse]

Helpful chart on US copyrights from Cornell:

Copyright Term and the Public Domain in the United States

I'm still confused about what I would do with a piece like Samuel Barber's Adagio for Strings (1938). Is it still copywritten? Who would I pay?

[sonare]

Originally Posted by NorseHorse

I'm still confused about what I would do with a piece like Samuel Barber's Adagio for Strings (1938). Is it still copywritten? Who would I pay?

A three minute search on Harry Fox shows that the copyright was renewed by G. Schirmer, whom Fox represents. So no, it is not PD.

Very useful chart, BTW.

Rich

[NorseHorse]

Carried over from the "Perect Storm" thread:

Digital Licenses

"Do I Need a Mechanical License?

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."

[Petrus]

Different countries have different laws. As I have understood it here in Finland I can make 6 archival copies of a live concert and give them to performers, free, and no need to report anything. (If they copy those it is their problem).

If I make more than 6 I have to get mechanical lisence, which is not all that much per free copy, but a hassle anyway.

For larger amounts it is possible to get reduced fees for up to 250 copies for press & promotion given away free, which must be stated on the label: free copy not for resale.

CD plants need a proof of paid lisences before they release the goods.

[NorseHorse]

Response to Is there a shop steward in the house? Union rules....

Originally Posted by boojum

It is a legal and ethical obligation honored more in the breach. I have not yet gotten a response from HFA for a ballpark idea of what a short run mechanical license, less than 2500 units, would cost.

Hey Boojom,

This info used to be really easy to find on their website. Their site is more convoluted now. If all your songs are under 5:00, then the total cost is:

($15 x the number of pieces you need to license) + (($.091 x the number of copies) x number of pieces you need to license)

So, for a ten song CD, printing 500 copies costs:

$150 in Processing Fees ($15 per song)
$455 in Mechanicals ($45.5 per song)

See http://www.harryfox.com/public/StatutoryReports.jsp

http://www.harryfox.com/public/Royal...Calculator.jsp

[boojum]

NH - Oh, yes, this is getting so complicated. There are a few tracks over five minutes, too. I am mixing the rehearsal for the director now. The hall they did the dress in has better acoustics than the hall they performed in so maybe the dress will get cleaned up and pressed. I can graft on the applause from the actual performance. That is all the pay the singers get so I put plenty of it in at he end of each of the two parts. No too much to be corny but plenty enough that they can bask in the glow.

I would much rather record and mix than get involved in the business end of it.

[RickZ]

Boojum,

One choral director that I do a lot of recording for wants 'zero' applause, if at all possible, so I cut it off hard, or if the audience held off at the end of a piece, no applause at all. I will admit that I don't enjoy listening to CD's with lots of applause at the end of every piece.

FWIW, another thought on the topic . .

Best regards,
Rick Z

[boojum]

The only applause I include is after the last track and then about 15 - 25 seconds. If this were not for a local amateur chorale I would cut the applause off sharply or include none at all depending upon the director's wishes. I will ask her about this. Thanks for bringing it up.

[John Brook]

I'd like to offer a contrarian point of view of sorts:

All of the royalty collecting agencies are self-serving businesses. That is, they are in it for the money. They pay themselves first, and then pay royalties to the copyright holder with left over money. They will never pay copyright holders first, then themselves.

For example, suppose we have a major depression and sales of recordings drop to near zero, and total royalty collections fall to $250,000. The Fox Agency (just to pick on them, because they've been mentioned so often) will pay their CEO his/her $200,000 salary, their staff the remaining $50,000 and nothing to copyright holders.

I mention this because as a self-serving enterprise, their statements and pronouncements are suspect.

If you want to be truly above board, safe, legal, but pay the minimum due, you really should hire a copyright attorney who can go through case law and make proper determinations.

Stepping down from soap box.

[dseetoo]

In a copyright related story that I like to share with you guys;
Couple of years ago, I was producing a CD with some brand new music of a very well known composer that the only way for me to get a copy of the score for the project was to go through the rental department of the publisher. So, I got the large score specifically printed for me from the publisher’s rental department before the session. All was good but I got big problems. 1, Since the music was copyrighted so I could not make a scrap copy. 2, I needed to mark the score as the session went on and to make more editing markings during the post production session, all of the markings made the original rental score looked like a world atlas after the project was done. 3, Since the score was a rental property it had to be returned. So before I returned it to the publisher I had to erase all my markings. 4, And finally, this was the biggest problem of all: I could not make a copy of the score with my own markings in it so I could archive it with the project. All my markings related to this recording project were lost. Yes, I did have many conversations and arguments with the publisher and even the composer about it, yet at the end what was done was what had to be done.
Sometimes, a good law can work against the best intention.


Regards,

Da-Hong Seetoo

[sonare]

Originally Posted by John Brook

I'd like to offer a contrarian point of view of sorts:

All of the royalty collecting agencies are self-serving businesses. That is, they are in it for the money. They pay themselves first, and then pay royalties to the copyright holder with left over money. They will never pay copyright holders first, then themselves.

For example, suppose we have a major depression and sales of recordings drop to near zero, and total royalty collections fall to $250,000. The Fox Agency (just to pick on them, because they've been mentioned so often) will pay their CEO his/her $200,000 salary, their staff the remaining $50,000 and nothing to copyright holders.

I mention this because as a self-serving enterprise, their statements and pronouncements are suspect.

If you want to be truly above board, safe, legal, but pay the minimum due, you really should hire a copyright attorney who can go through case law and make proper determinations.

Stepping down from soap box.

I am not arguing with your points but I am curious where you got your information?

Rich

[John Brook]

I thought about this a lot last night. Perhaps the example of the IRS would have been better. Congress enacts legislation, the IRS collects the taxes.

Internal to the IRS, promotions, bonuses, etc., are paid on the basis of collections, not on how many people are given "tax breaks."

If you want advice on how much tax you're required to pay, don't ask the IRS. It will always be in their favor. Rather, go to a tax lawyer. Are you aware that weekly, the Wall Street Journal publishes a listing of dozens of cases where the IRS has lost in tax court? In the course of a year, the IRS overcharges thousands of tax payers.

This is what I mean by self-serving organizations. It doesn't mean they're bad or they're out to get you. It means they are biased in favor of generating revenues for themselves.

As for my first example, I think you can answer your own question. What would happen if the various royalty collection agencies paid artists first and themselves second? They would go out of business in lean years.

My overall point is that we should recognize these organizations for what they are - self-serving (this isn't a bad thing, it's human nature) - and rather than take their words for what is or isn't due, consult with an attorney or firm which specializes in the minutia of copyright law.

Taking legal advice from forum posters is, IMHO, a very risky enterprise.

[WVUtubadude]

I really wish there was a provision for non-profit organizations in all this copyright stuff. Most of my clients are schools doing fundraisers for their band programs by selling concert CDs to parents (under 100 units) and these mechanicals put a big dent in their cut.

[NorseHorse]

Anyone have experience with EasySongLicensing.com? Get a Mechanical Music License Online

Looks like they are a hair cheaper than Harry-Fox and offer discounts for more songs.

[supo]

Here's a solution I've used. First, you don't have to use Harry Fox. Second, technically, you're legally required to get permission from the copyright holder to even record the piece. So much for programming changes. What I've done, right, wrong, legal, illegal, indifferent - this is how I handle it. I send a letter, with a check attached for the correct amount by law and I track mail it. If they cash the check (they do), you got permission. The other option is to write and request to record and distribute without a fee in exchange for (fill in the blank). Usually it's a copy of a recording. Again, track the mail. If they DON'T respond, I've made the attempt to follow the laws directly to them. Reality is - when I was doing everything by the book - I'd get my mechanical licensing 5 years later at times (no joking). This has satisfied my clients, may not be correct, legal, etc; but if you want the money, then respond to the request. The reality is - it's a paper work pain in the arse for them to collect your 10.00 dollars for them to draft the paper work, pay the secretary etc; The best response I get is the cold check in the mail. There are more details, but this is an overall synopsis. I'm not recommending you do what I do, I'm just saying what I do.