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Publishing Covers
Old 16th November 2007
  #1
Moderator
 
Trev@Circle's Avatar
 

Thread Starter
Publishing Covers

The licence cost to publish a cover song on cd is as cheap as chips at about 5c per cd (in the UK anyway). I noticed recently (and as I understand it) that while the cost is the same for digital downloads an upfront and non-refundable 'deposit' has to be paid of around $2000 for the rights to sell the track digitally (from which the 5c per track can be taken). This is obviously prohibitive for young bands who are never likely to make even close to that number. Presumably this is done because it's considered somehow easier to subvert the royalty system digitally than it is on good old fashioned cds (or for that matter vinyl/wax cylinders)?

I was wondering whether there was any way any of you guys could influence this... (just one idea for this might be perhaps by putting a system in place to notify the IP holder of the number of sales and, therefore, how much they are entitled to collect on a given cover song). Do you guys have any ideas on this (or better still is there something in train to deal with it)?

Cheers
Trev

Last edited by Trev@Circle; 16th November 2007 at 11:18 AM.. Reason: correcting typos
Old 16th November 2007
  #2
Founder CD Baby
 
Derek Sivers's Avatar
 

Smile licence cost to publish a cover song

Quote:
Originally Posted by rimskidog View Post
an upfront and non-refundable 'deposit' has to be paid of around $2000
Trev : I'm sorry I don't know the UK system, but we hired 4 US copyright lawyers to write up an exhaustive definitive paper on how to do it, here : CD Baby: How to Legally Sell Downloads of Cover Songs

In short : copyright law is on your side (as an artist doing a cover song). Middleman companies like Harry Fox that say you have to pay $2000 up-front are wrong. You only have to pay $2000 up front if you go through them. But copyright law written long ago says you have the right to go to the publisher directly and pay them X-cents per copy sold, when sold. No up-front is required by law.

I've been thinking about having CD Baby comission a similar how-to article from a few UK copyright lawyers, so thanks for the reminder on this.
Old 16th November 2007
  #3
Peter Wells, SVP Operations, Customer Advocate - Tunecore
 
PeterTuneCore's Avatar
 

Too much to say here!

For all you want to know, visit our FAQ:

TuneCore: FAQ

But just in case you want to read it right here, take a peek!

Cover songs involve "publishing." Publishing issues can be complex. Here is a quick background on how it works in the United States. Laws vary from country to country. NOTE: Please don't take this as legal advice.

INTELLECTUAL PROPERTY

Just like your computer or your car is your property; a song is property. It's a particular kind of property: "intellectual property." Just as you have a right to determine who uses your property, the owner of a song also has rights. So, you must get the right to use the song from the owner.

The particular right you need is the right to make copies of the song: the "copyright." Only the owner of the song has the right to make copies or to grant the right to others to make copies. So you need to get permission to copy the song. You get that permission by getting a license, just as a driver's license gives you permission to drive. In some cases, song writers and owners of songs do not take care of their own songs. They turn to someone else to deal with giving permission and doing all of the administrative stuff. This person or company is called a music publisher.

MECHANICAL LICENSES

In either case, you must contact the publisher of the song in order to get the license. The license is called a "mechanical license." The mechanical license gives you permission to mechanically reproduce (copy) the song. Of course, in this case the song is being reproduced digitally, but it's the same principle: every time someone downloads the song, a copy is being made. And for every copy that is made, the owner or publisher must be paid. Remember, the publisher is simply someone taking care of the song for the owner. The amount of payment is established by the United States government under copyright law. The amount being paid is called the "statutory rate." Statutory is a fancy word meaning required by law. The current statutory rate the song owner or publisher must be paid is 9.1 cents per copy (going up in January of 2008, watch out!). So every time the song sells, you owe the owner or publisher 9.1 cents. This rate, you will discover, will be written in the mechanical license.

COMPULSORY LICENCE

In addition, instead of getting a mechanical license from the publisher or song owner, you could make use of a provision in the copyright law called a "Compulsory License." However, there are so many requirements for both notifying the copyright owner and accounting to the copyright owner or publisher for sales of his song, it is not recommended that you try this method. The best and easiest way to get a mechanical license is from the owner or the publisher directly.

For example, let's take Dolly Parton. Dolly Parton wrote a song called "I Will Always Love You." Whitney Houston sang it and Sony Records released it. The song went on to sell 14 million copies on a CD single. For each copy made by Sony, Sony had to pay the owner of the song the statutory mechanical royalty dictated by the US Government. Multiply 14,000,000 times the mechanical royalty rate and you can see Dolly Parton was a very happy lady.

ADMINISTRATORS

Some people in the U.S. talk a lot about a company called the Harry Fox Agency. What is the Harry Fox Agency? The Harry Fox Agency is just a company that gets hired by the people that own the rights to the song. The Harry Fox Agency now gets to deal with the administration. Harry Fox gets the license signed and sent back to them (which means a ton of paper work) and then they run around trying to find anyone that has used their clients' song and collect the money owed to their clients. In return, the Harry Fox agency takes a percentage of the money owed to their clients. This is called an "Administration Deal" as the Harry Fox Agency administers the licenses and collects the money on behalf of its clients.

The Harry Fox Agency does represent tens of thousands of people, but not everyone. For example, TuneCore founder Jeff Price has run spinART Records for the past 15 years and released bands like The Pixies. The creator of the songs for the Pixies (one of the band members) did not hire the Harry Fox agency. Neither did the songwriter(s) for the Apples In Stereo, The Dears, Michael Penn, Kaito, Clem Snide or many others. So, if you want to "cover" a song, the Harry Fox Agency may or may not be the place to go to get the license and pay.

YOU HAVE TO FIND THE SONG OWNER

You need to discover who owns the song. Setting this up takes a little one time work, but after that, you're good to go. How are you supposed to figure out who to pay? That's a very good quesiton. Places like BMI - BMI's site, or ASCAP - ASCAP's site, can you help you discover who wrote the song and who to contact to pay on their behalf.

TuneCore is also happy to report the Harry Fox Agency has recently launched a new site called "SONGFILE," for full download mechanical licensing for covers. It is a tool for artists and labels who need limited quantity physical and/or full download (also called DPD) licenses. It can be found at www.songfile.com. This service is unconnected to TuneCore, but may prove a valuable resource for our clients.

Harry Fox has also posted a new Digital Licensing FAQ which you may find useful.

Note: ASCAP and BMI are public performance societies, not publishing companies--but that is another ball of wax.

--Peter
peter@tunecore.com
Old 16th November 2007
  #4
Moderator
 
Trev@Circle's Avatar
 

Thread Starter
Thanks guys. I've had a couple of young bands ask me recently so wanted to be sure on the position. I've spent the night on the web trying to work this out and contrary to my previous understanding found this straight from the horses mouth (UK only):

http://www.mcps-prs-alliance.co.uk/p...ages/LOEL.aspx

In a nutshell it seems like if you don't expect to make more than £3000 ($6000) gross in a given year you can purchase a a joint mcps/prs licence for £117.50 if you expect less than 2500 dowloads or twice that if you expect less than 5000 downloads. I guess that's a better position than my previous research suggested!

Keep up the good work!

Trev
Old 20th November 2007
  #5
Mindreader
 
BevvyB's Avatar
 

Ok this is interesting

A friend of mine plays the most amazing medleys on piano and wants to sell cds online

These include tiny snippets of everything from tv commercials to film theme tunes, nursery rhymes and pop hits

Does he have to clear every single item with every single medley? Of course the arrangements are all his and these themes come in and out with astonishing speed, sometimes touching on over 30 themes in one three minute piece

There is a big market for what he does, especially via youtube and through a digital distributor, but where on earth does he start when he is selling to a worldwide market with apparently different takes on the subject of cover versions and copyright?

Bev
Old 21st November 2007
  #6
Peter Wells, SVP Operations, Customer Advocate - Tunecore
 
PeterTuneCore's Avatar
 

It's all covered in my post above. As long as he obeys compulsory laws, he's done nothing illegal. Of course, if he relies on the statutory, he'll have to part with a lot of cash! But then, he got the BENEFIT of all that music he didn't write, so it's only fair.

--Peter
peter@tunecore.com
Old 21st November 2007
  #7
Gear nut
 

The Harry Fox Agency makes it somewhat convenient for the small guys to get licenses for covers, but I must say that they make you pay dearly for it. You have to pre-pay for song's you've yet to sell, minimum 150 units, and they charge a service fee that is roughly the same as the royalties on 150 units. That license is only good for a year so you can't load up and pay for several years in advance to avoid the service fee.

If you continue to sell your songs year after year there's no feature to re-license the songs you did last year, you have to re-enter each song in again, one-by-one through the song search feature.


I manage a catalog for my band that does only Christmas songs, so a good percentage of our songs are not PD. When I started managing it, HFA hadn't set up the online process,Songfile, so I was able to submit quarterly reports and payments to them. The year they started Songfile, they forced me to keep the my existing licenses in their old system and license all the new stuff with Songfile.

It's just enough work to track down all the Publishers myself, do the monthly reports and payments that I'm stuck between paying HFA every year or doing the footwork myself, when HFA already has the system I need, and allows me to use it for a small percentage of my songs.

I suppose my experience may be different in that there are over 60 songs in my catalog. I'm pretty sure that I'm cranky because I'm about to drop over $600 to get licenses for songs I haven't even sold yet. YMMV i guess.
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