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The Cover Song Quagmire
Three Ways to Obtain Mechanical Licenses for Legally Recording/Distributing Cover Versions on CDs
By Dale Turner
(more articles from this author)
2004-06-11
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For many musicians, a considerable amount of "play time" is spent learning other people's songs: either for cover band gigs, wedding performances, or merely to study another artist's work. If this sounds like you, as your repertoire has grown, it's highly likely one or more of those songs has sparked something extra-special inside you. Why not immortalize your efforts by recording some of those magical numbers and putting them on a CD? At the very least, one of those "classic" tracks might be the perfect way to punctuate your next disc!

But before you act, you need to know what steps you need to take to ensure you're protected, and the original songwriter gets his/her due. With this article, we'll take a look at the three primary paths you can take to obtain a mechanical license, a.k.a. "Circular 73: Compulsory License For Making and Distributing Phonorecords" to legally release your version of another artist's song. For reality's sake, I'll also include a little "story" to go with it -- my personal experience releasing an album comprised of covers -- to walk you through this somewhat tricky, time-consuming process. Let the games begin!

Way back in December 2000, I recorded a set of 10 cover songs, intending them to be nothing more than a CD-R Christmas gift for my mother. Nothing fancy, just a bunch of classic tunes (Beach Boys, Beatles, Queen, etc.) I'd spent some time on months earlier, developing from an "arrangement" standpoint to add to my repertoire and then recorded totally "raw" in my home studio. When the holidays finally hit, needless to say, Ma dug my little "stocking stuffer." And as an added bonus, it was a big hit among my relatives!

Well, after playing some of these tracks for some of my (thankfully) enthusiastic friends, I was encouraged to take these songs to the next level -- offer them as a full-blown, shrink-wrapped CD, available to "quirky cover song" fans. However, though I went the extra mile trying to conceive of unique ways to present these tunes, I wrote nary a note of this music. In order to legally (and ethically) pull this off, I'd have to find out who to pay, credit, and get permission from. With none of my friends involved in publishing or entertainment law, I hadn't the foggiest idea how to go about this.

Enter the Harry Fox Agency, or HFA. After scouring the internet for "ballpark" legal advice, it became clear that the HFA was the central hub of all things relating to obtaining the rights to record and sell copies of songs written by other parties. (NOTE: Outside the US, similar Mechanical Rights agencies exist for Canada, the UK, and Europe (and elsewhere). ,

After locating the Harry Fox Agency's home page, I discovered that the HFA (among other things) specializes in the following licensing services:

Mechanical Licensing: The licensing of copyrighted musical compositions for use on CDs, records, tapes, and certain digital configurations.

Digital Licensing: The licensing of copyrighted musical compositions in digital configurations, including but not limited to, full downloads, limited-use downloads, on-demand streaming and CD burning.

Given that I was going the "CD" route, playing someone else's "copyrighted musical composition," this confirmed some of the things that I'd already read online. I needed a Mechanical License! On the left side of the HFA homepage read the words:

"To obtain an HFA Limited Quantity License (less than 2,500 units), use Songfile.com (click here)."

Since I was planning on manufacturing 1,000 units, the most common number for an "indie" CD run, HFA's www.songfile.com sounded right for my purposes. On Songfile, the steps to follow were simple: I clicked the "Song Search" link (note their browser requirements), entered the title of one of the songs I covered, and searched their database for the types of licenses available. Upon selecting the "mechanical license" option, I was asked the following multiple-choice questions (my answers appear in parentheses):

1) How many recordings will you make? (2500 copies or less). HFA's license fee minimum is 500 units.

2) Manufactured in what country? (Within the U.S.)

3) Distributed in what country? (Within the U.S.)

4) Which type of Organization do you represent? (Individual)

Based on the length of each song and the number of units you plan to sell, Songfile then computes a fee based upon the statutory mechanical royalty rate, which is the money collected for each sale of your cover version that goes directly to the songwriter and publisher of each song. Currently (January 1, 2004 to December 31, 2005), the "statutory mechanical royalty rate" is 8.50 cents for songs 5 minutes or less or 1.65 cents per minute or fraction thereof for songs over 5 minutes. At that rate, for the purpose of my CD, covering a single song under five minutes long and selling 1,000 copies of it added up to an $85 fee. Since I was going to be licensing 10 songs, I'd have to pay at least $850! Two of the songs I recorded were actually over six minutes. At the current rate, that calculates to $115 each. To say the least, that's a pretty substantial up-front investment! (On a per song basis, this fee can be paid online by credit card; otherwise, you have to do the entire process manually by filling HFA's mechanical licensing form and mailing it in to the HFA with a check.

It's also worth noting that, at first, I thought this "fee" was merely the cost of obtaining the license. I shuddered at the thought of having to pay this, PLUS royalties at a rate of about eight cents per song, to say nothing of my CD's photography, art design, manufacturing costs! To my relief, a few months later, a friend informed me that the fee I paid was just an "advance" on the royalty for 1,000 copies of each song sold; the license itself was apparently only $10. According to the fine print, you're "charged a $10.00 non-refundable processing fee per license, which will be added to the license amount and processed as a single charge to your account."

Back to Harry Fox... After shelling out for several songs (you provide a ballpark release date and other details, submit your credit card info online, then receive a license via e-mail in a matter of hours or days), I entered the name of a Jimi Hendrix song I wanted to license. After answering all the same questions in the exact same manner as my previous song selections, the following words appeared before me on my monitor (in red, no doubt for dramatic effect):

This song is not available for mechanical licensing.

Noooooo!!! In a panic, I then entered the details of a Billy Joel song I recorded.

Ditto: "This song is not available for mechanical licensing."

As far as I knew, the Harry Fox Agency held the rights to all the songs legally available for the "covers" treatment; anything else was a no go. I figured this was enough to all but doom my little project (*sniffle*). For starters, those two songs demonstrated an aspect of my playing and singing that the other eight songs didn't. Further, I just didn't think it'd be cool to put out an "eight-song" covers CD, let alone one without my man Jimi being represented! Lastly, since this CD was already over three years old, it didn't feel right to do two "new" songs and slap them on at the end of the collection. To my mind, that would ruin the idea of me releasing an "accidental" album, if you will.

But then I discovered an interesting legal fact: Once a song has been commercially released by an artist, that artist's song may be re-recorded and released by anyone who chooses to do so. This holds true, provided that the melody/lyric isn't substantially altered in the "cover" version, and that they pay proper fees/royalties directly to the song's copyright holder. On the flip side, if you release a disc with cover songs on it, then try to obtain proper licensing after the fact, you're no longer eligible, and possibly subject to penalties/prosecution for copyright infringement! All I needed to do was investigate who owned the publishing rights to those Jimi Hendrix and Billy Joel songs. This information (including each publisher's address) was readily available through the following Performance Rights organizations:

BMI
ASCAP
SESAC

Later, I found that the above "publisher's search" process could be sped up considerably by going through the Music Publishers Association's website.

After obtaining both publishers' contact info, I was left with that resounding "Now what?" feeling. Again, the ol' Internet paid off. I found I needed to send to each publisher what's referred to as a "Notice of Intention to Obtain Compulsory License for Making and Distributing Sound Recordings." After more cyber searching, I finally found out what the heck that was at the overwhelmingly incomprehensible (to my neophyte self) U.S.Copyright Office website. Reading that document was almost enough to make me toss in the towel (and my cookies). But then, much to my satisfaction, I came across this totally "pre-fab" letter letter, designed by the friendly webmasters at Bignoize, a "fill-in-the-blanks" style for submission to artists' publishers. This letter appeared to adhere to the specifications prescribed by the US Copyright Office.

From here, the Billy Joel licensing process went off without a hitch. I sent in the above letter (certified mail, return receipt). When they received it, they asked me via e-mail to specify the number of copies I intended to sell (information omitted from the "pre-fab" letter I used). They then sent a written agreement for my signature, additionally asking for an $85 check covering the sum of advance royalties paid on 1,000 units. (My research revealed that you could try to negotiate a lower royalty rate with each publisher. However, I happily agreed to pay the "compulsory" or "standard mandatory rate. This agreement also provided me with the exact wording for the "publisher/writer credit" I needed to include in my CD's liner notes, and stipulated that the publisher receive two copies of the disc "as released." Individual writer/publisher credits for every song you cover must be included in your CD's liner notes. Upon execution of the agreement, they granted me the license and quickly sent me a hard copy for my records.

A search for Hendrix's publishing was another matter entirely. Depending on which performance rights organization I searched through, both "Bella Godiva Music" and/or "Experience Hendrix LLC" administered Hendrix's publishing rights. To make a long story short, Experience Hendrix LLC was the correct one. I sent my same "pre-fab" letter to their P.O. Box (the only indicated address); it came back three weeks later as "undeliverable to addressee" because nobody signed for it. (Again, I sent it certified w/return receipt, a bad idea for P.O. boxes, apparently.) On a deadline by now (I was looking to release this disc in a couple months), I located a phone number for Experience Hendrix LLC and got the ball rolling that way. They requested I e-mail their Music Publishing & Licensing contact, asking them to e-mail me back (as an attachment): "a downloadable version of the form I need to submit in order to obtain a mechanical license for the making and distribution of 1000 CDs containing the track "Castles Made of Sand"." I was also informed that they needed to approve a copy of my "cover version" first, before they could grant me a mechanical license. Fine by me! I sent them a CD-R copy of my almost-final mix, with their filled-out e-mail form (replete with Hendrix logo!), and a few weeks later, finally got the official "go ahead."

So there you have it: Two of three possible paths for legally covering another artist's song. In the end, if you go direct to the publisher, you'll do away with the HFA's $10 filing fee. Personally, given the time it took "going direct" (to say nothing of the anxiety it caused), I'd gladly pay that $10 any day of the week! You'll just need to weigh your own personal "time vs. money" options.

So what about licensing method #3? Well, if you've exhausted all reasonable means and can't locate the copyright holder(s) for the song(s) you've covered, you can file the same Notice of Intention to Obtain a Compulsory License with the Library of Congress, Copyright Office, Licensing Division. Each song needs to be filed separately, and there's a $12 filing fee (per song). The Library of Congress will establish to whom royalties are paid by identifying the copyright owner. At that point, you'll need to make all due royalty payments, and make sure you pay! (Hint: "dot gov"!) If you find you need to go that route, make sure you compose your correspondence to the US Copyright Office following these specifications, as prescribed by the US Copyright office. In the event you have any questions, the Library of Congress can provide you with detailed instructions concerning this form. Ask for the Copyright Office Regulations on Compulsory License for Making and Distributing Phonorecords, Circulars 96 Section 201.18 and 96 Section 201.19, and address your request to:

Library of Congress
Copyright Office
Licensing Division, LM-458
101 Independence Avenue, S.E.
Washington, D.C. 20557-6400

Meanwhile, here's sample of a "pre-fab" Notice of Intention to Obtain a Compulsory License I found online.

Finally, be aware that being granted a mechanical license does not mean you can reprint that song's lyrics in your CD's sleeve. You must clear these rights through the publisher directly. And samples and audio excerpts from the artist's original master recording must be cleared differently; for this, you must obtain a "Master Recording License" directly from the record company that owns the master to the recording. I believe Harry Fox used to offer this type of license, but has since discontinued doing so. Further, sale of MP3 downloads requires a separate "Digital License."

In the end, all the footwork I had to engage in (and anxiety I had to endure) to legally take this "stocking stuffer" to the next level was well worth the effort. I now have a CD of songs I really like, performances I'm proud of, and a nice memento of a personal "place in time" that I can proudly distribute. I hope you some day consider doing the same. Good luck!


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