Music Publishing and Copyright: Cover Songs - TuneCore

who gets paid
For every copy sold, the songwriter or publisher must
be paid. The amount required to be paid for the sale
of each copy of a “composition” is called the mechanical
royalty. The royalty rate is established by the
Copyright Royalty Board of the Library Of Congress;
a government agency empowered by Congress to determine
the royalty rate. The royalty rate set by the
Copyright Royalty Board is called the “statutory rate.”
Statutory is a fancy legal word meaning required by law. So, the rate set
by the Copyright Royalty Board is the statutory mechanical royalty rate.
The current statutory mechanical royalty rate that must be paid to the
song owner or publisher is 9.1 cents ($.091) per copy. When you record
a cover song, every time that recording sells, you owe the songwriter or
publisher 9.1 cents. All mechanical licenses will specify this rate. Sometimes
the rate is specified in pennies; otherwise the license will specify the
“statutory rate.” In some cases, you can negotiate with the songwriter or
publisher for a lower rate, but unless you can demonstrate that you will
have enormous sales, the likelihood of getting a lower rate is slim. Finally,
the rate does not remain static or permanent. In fact, as I write this in
February 2008, the Copyright Royalty Board is considering a change in the
statutory rate.
compulsory licenses
A word about the “Compulsory License.” You may have heard of something
called a “compulsory license.” The U. S. Copyright Law allows you to
get a “compulsory license” in lieu of getting a mechanical license directly
from the publisher or songwriter. But this method is a lot more work. Using
this method entails specific requirements for notifying the song owner
and stringent requirements for accounting. And you will still pay the full
statutory mechanical royalty rate. It is not recommended that you try this
method. The best and easiest way to get a mechanical license is from the
songwriter or the publisher directly.
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