How Do I Stop Compulsory License?

Dear Rich: How does one prevent a compulsory license from being obtained? For example, what if I don't WANT anyone else recording MY song? Can a publisher and/or a copyright owner refuse to grant a compulsory license? What if some non-respectable band decides to record and release a song that I have published, which then tarnishes my band's reputation with our fans? Nobody ever gets clearance to cover Led Zeppelin without authorization. How does that work? I mean, doesn't a compulsory license kind of render copyright null and pointless?
First, a little background: The compulsory music license permits a musician or record company to distribute a version of your song on a compact disc, vinyl, or digital download (all referred to as "phonorecords") if they pay the statutory rate, currently 9.1 cents per copy. The compulsory license does not permit you to use a song in a movie, TV show, commercial or a music video. Those uses would have to be licensed separately. The compulsory license is available only after you have first distributed copies of the song to the public. It's not available if you never distributed your song as a phonorecord -- for example, if your song was only used in a movie or TV show. The compulsory license is also not available if the musician covering your song wants to make substantial changes to the music or lyrics -- for example, Weird Al Yankovich negotiates permission* to create his parodies. The compulsory license has been around for over 100 years and was considered a boon to songwriters when it was first enacted because it guaranteed compensation for "mechanical" reproductions. Should your band sign with a label, the label is required to pay songwriters the compulsory license fees (or a lesser negotiated amount known as a three-quarter rate).
Right, you had a question. As for your concerns about another artist tarnishing your reputation, we have doubts about that. Other artists might release versions of your song that you don't like but we don't see why that would tarnish your cred. We didn't care for Britney Spears' remake of "Satisfaction," or Jessica Simpson's version of "These Boots Are Made For Walking," but they didn't diminish our love for the original versions (and from a financial perspective, we think the songwriters were okay with these lesser gems, as well). And of course, sometimes, a mundane cover reveals something unexpected or sometimes a cover is so good, fans believe it is the original version.
Copyright realities. Finally, you need to keep in mind the goal of copyright: the government is granting a limited monopoly because it wants to encourage creativity. The compulsory license fulfills that purpose. In fact many people wish that compulsory licenses exist for photography as well as for all intellectual property.
* BTW -- here's the happy ending to the Weird Al/Gaga story)

Is Music Compulsory License Needed for DVD of Film?

What if a filmmaker wants to record a cover of a song for use in a film and has no plans to put the cover song on a soundtrack CD or to make downloads available. Say the filmmaker hires his musician friends to record it, only for use in the film. I know the filmmaker would need a sync license. But would the filmmaker need a mechanical/compulsory license if the cover song were never sold on CD or downloads?
You are correct that a sync license should be negotiated between the filmmakers and the owners of the song. However, a compulsory mechanical license would not be needed. This is true, even if the filmmakers issued DVDs or downloads of the film. That's because a compulsory license is only granted on phonorecords -- copyright lingo for media that embodies only sounds (thereby excluding audio-visual recordings such as movies). A DVD or download of a film is not a phonorecord.

Who Owns Sound Recording Copyright in Cover Version?

photo: Barry Mulling

Dear Rich: I have a follow up to my original question from December regarding a cover version of a Beck song. I just submitted my mechanical licensing paperwork to Kobalt (Beck's music publisher) for the Beck songs. Does a cover artist normally retain copyright to their recording/performance? The agreement says that Kobalt retains the copyright to all use of the song. Even though it is a cover, I thought I should still be able to copyright the 'recording' itself. When I challenged them on it they said no, Kobalt retains copyright to everything. Is this normal for a cover song? I felt like I should retain copyright to my arrangement and recording, outside of the song/lyrics/melody. Thankfully my next collection will have no covers! We think there's some confusion as to the two copyrights involved -- the musical composition copyright and the sound recording copyright. We're guessing that the Kobalt rep meant that Beck retains all rights to the musical composition copyright -- as well as to changes you make to the song -- but not to the sound recording copyright.
The cover song scenario. Typically, a performer who uses a compulsory license, retains all rights to the sound recording copyright (or the rights are retained by a record company or producer). Even when a performer seeks permission from the music publisher --  if for example, the lyrics are changed or a lower fee is negotiated -- the performer still usually retains the sound recording copyright. For example, if Weird Al parodied a song, he might have to give up his lyrics to the music publisher -- which is why the lyrics to "Eat It" are credited to Michael Jackson -- but not the rights to the sound recording. There would be a great disincentive to perform cover songs (Goodbye American Idol!) if the music publishers ended up owning the performances.
Your situation. Even if we're wrong and Kobalt is demanding the sound recording copyright, you can still retain rights. As you remember from our previous answer, we think some or all of the songs on Beck's Song Reader album are subject to compulsory license -- meaning that permission is not needed if you're willing to pay the fees and play by the compulsory license rules. (Limelight appears to be one of the licensing agents.) In that case, you can retain all rights.

Compulsory License for Beck's "Song Reader" Album?

Dear Rich: Last year Beck Hansen released his 'album' Song Reader as sheet music and invited artists to record and share their versions (mostly via SoundCloud), but he did not sell a recorded album. I made a set of these songs and would like to distribute my 'versions' derived from his chords and lyrics, on iTunes. I don't understand what license I need, who to pay, or how to get it. The songs don't show up at Harry Fox, and I'm sure Limelight will take my money but I don't think that is the right path either. The sheet music has what looks like bogus publishing companies listed, but there is a Beck Hansen credit on each one. I just want to do the right thing. One of my SoundCloud followers worked on Song Reader and suggested I get in touch with Kobalt, they're 'contact us' folks sent me the generic mechanical form. I feel like this is different.  As we explained in a previous post, when an artist releases an audio recording, copyright law allows anyone else to thereafter release "cover" versions of that song without asking for permission, provided that a compulsory mechanical license fee is paid and certain rules are followed. According to Section 115, the compulsory license kicks in "When phonorecords of a nondramatic musical work have been distributed to the public in the United States under the authority of the copyright owner ..." Beck never released a sound recording (phonorecord) of the Song Reader and the compulsory license would not have been triggered by the release of the book.  
However ...  Keep in mind that the real key to a compulsory license is the phrase "under the authority of the copyright owner." If Beck (assuming he is the copyright owner) has authorized someone else to make and distribute recordings, he would trigger the compulsory license right. At least two artists, Amy Regan, and the Portland Cello Project, appear to have released authorized recordings. More importantly, when our staff spoke with Beck's publisher Kobalt Songs, (see screenshot, below), we were told that they grant Song Reader compulsory licenses. That would explain the presence of the Song Reader compositions at Limelight as well. So, a license from Limelight, or Kobalt, should secure your ability to sell your versions at iTunes.
P.S. As noted, Beck has set up a website for musicians to contribute their versions of Song Reader compositions.

screenshot from ASCAP site

When Does a Version of a Song Qualify as Fair Use?

Dear Rich: I am working on a tribute album and I'm trying to figure out the distinction between derivative works and transformative fair use.  At what point is a song transformative enough to be considered fair use, vs. a derivative work? And how can I use this knowledge to negotiate with publishing companies, prior to recording/selling and performing the songs? If I am not given permission to create or sell a derivative work and I only perform them live, what is the risk and potential liability of infringement? Sorry, we would have gotten to your questions sooner except we've been obsessed with creating animated GIFs ever since Photoshop Elements 10 arrived (finally, you can change the timing on the animation). We expect to get over it soon, and yes, we know they're annoying to watch. 

Right, you had a question. If you're doing a tribute album, we assume you're doing cover versions of existing songs and that it is a "tribute" to a band or performer. There are two legal rules at work here.

• Compulsory license. First, under Section 115A of the Copyright Act, a music publisher must permit you to record any song that has previously been recorded and released to the public. However, you cannot use the compulsory (mechanical) license if you change the basic melody or fundamental character of the song. For example, a singer cannot alter a song’s lyrics without permission. That said, many people change elements of songs without a problem (as we mentioned in this previous entry).
• Derivatives and fair use. A derivative work is one that is based upon or modifies an existing work. A fair use is when an existing work is used in such way that a court, balancing four fair use factors determines that permission is not required. The transformative quality of the work is an important factor but so is another factor -- the amount and substantiality of the portion taken. In most music cases where fair use is found it's because a relatively short segment of the original work is used. We don't think providing a full-length cover of a song will qualify as a fair use -- even if it is as transformative as this.

The "So What" Issue. Even if you believe you have a strong fair use argument, a music publisher is likely to respond, "so what?" Only a court -- not you or your lawyer -- can verify that it is a fair use, so a publisher is unlikely to feel pressured to grant permission based on your arguments. What you might wish to consider --  although this advice is contrary to Section115A --  is to simply pay the mechanical license fees even though you have modified the songs. Our experience is that most publishers just want to be compensated and don't want to have to deal with special permissions. As for performing the songs live -- any venue where you play will have to pay performing rights fees for each song -- so it is unlikely that music publishers will care about your version just as long as the song title is correct.

Changed Song Lyrics: Can I Record It?

Dear Rich: I'm curious how I can copyright a song where I used an existing song and while I changed most of the words I did not change the music. The meaning is entirely different but I'm sure I can't legally record the song without consequences. Based on your web article "How to Obtain Sample Clearance" it sounds like there is no chance for me to legally sell my version of the song if the copyright owner or artist/songwriter doesn't grant permission. The chances of me making a lot of money are slim but I'm happy to pay some type of royalty or percentage of revenue in the event it is successful. Sometimes there's gold in those changed lyrics. When Ken Darby changed the lyrics to Aura Lee (a public domain song), the result -- Love Me Tender -- became a monster hit for Elvis Presley. If you're wondering why that song is credited to Presley and Vera Matson, Darby's wife, that's because Presley demanded co-writing credit for many songs he recorded regardless of whether he actually wrote them. When asked why Darby credited his wife instead of himself, he supposedly replied, "Because she didn't write it either."
Right, you had a question. You asked how you can copyright a pre-existing song whose lyrics you have modified. We suppose you could file a Form CO, claim authorship of the lyrics and then, in section 4 (Limitation of Copyright), state that you are not claiming any copyright to the pre-existing material (name the song and provide its copyright registration number). Doing that won't really gain much for you because you still can't perform or record the song without the permission of the underlying song owners. So, we'd recommend scratching that strategy.
How can you record the modified song without being sued? We think that's the real question you're asking. Under copyright law, you need to seek permission from the song owner to record it if you materially alter the song. We doubt whether a publisher is going to grant permission to modify lyrics to a song, although it's always possible. (By the way, none of this has anything to do with sample clearance.) Of course, if you hadn't materially altered the lyrics, you wouldn't need to ask for permission, you could simply pay a fee to a service such as Songfile (Harry Fox) or Limelight, and obtain a compulsory license. Knowing this, some musicians use a halfway measure -- they pay for the compulsory license and use their modified version of the song. Even though that doesn't meet the standards of copyright law, the thinking is that by paying for the license, the musician demonstrates good faith and hopefully, the song owner won't care to hassle those who pay for licenses.

Cover Songs, Compulsory Licenses, and CPAs

Dear Rich: We decided to take the compulsory license route for seven songs on our fourth album. We were comfortable with the idea of paying monthly royalties to seven music publishers, because we only made 150 CDs and we thought the monthly task probably wouldn't last too long. We also thought it would minimize some of our initial costs in making and releasing a new album. However one music publisher sent us a letter stating that since we chose the compulsory license route, we must furnish an annual statement certified by a CPA; otherwise, we "would be in default with respect to the Compulsory License guidelines." I knew that an annual statement needed to be furnished, but I didn't know it had to be certified by a CPA. We phoned and e-mailed the other six music corporations and asked if they wanted an annual statement certified by a CPA, and all six were very nice and told us they didn't want the CPA certification and that the monthly statements were enough. We started conversations with the CPA who does my business partner's taxes, but he didn't want to take any risk of signing his name on a piece of paper that confirmed the number of CDs we sold in 2011 matched the amount of royalties we paid to Bourne. I spent about ten hours preparing clear instructions and documentation (receipts, evidence, etc.) that prove we only made 150 CDs in 2011, sold 71 in 2011, and have 79 remaining, but the CPA was only willing to sign his name if the language on the annual statement said he can't provide any assurance or guarantee that our payments and inventory are correct. To us, this seemed ridiculous, especially since we agreed to sign a waiver of liability. Do you happen to know of a CPA who speaks our language and who can probably certify our simple annual statement?  Sorry about the agony (or "ag" as the young people say). Considering that the total sum at issue appears to be $6.46 (9.1 cents per song per pressing x 71 copies = $6.46), we think there's got to be a simple solution.
What happens if you don't include a CPA statement? Congress (in 17 U.S.C. Sec. 115) empowered the Register of Copyrights to create CPA regulations (found at  37 CFR 201.19,) for compulsory licensing accounting. (And yes, Annual Accountings under compulsory licenses must be accompanied by the CPA's statement, shown way at the bottom of this blog entry). Sec. 115 (6) provides that:

"If the copyright owner does not receive the monthly payment and the monthly and annual statements of account when due, the owner may give written notice to the licensee that, unless the default is remedied within thirty days from the date of the notice, the compulsory license will be automatically terminated. Such termination renders either the making or the distribution, or both, of all phonorecords for which the royalty has not been paid, actionable as acts of infringement ... "

So, if we assume that failing to include a CPA notice places you in default, you would only be liable for any future sales (after receiving a notice of default). So perhaps an easy solution would be to pay off the remaining 79 CDs ($7.19). Once the publisher cashes that check (and assuming you don't press any more CDs), it appears that the CPA issue would be moot. Alternatively, if you don't want to pay it off and you want to continue pressing and selling the cover song, you could send a letter to the publisher explaining the situation and furnishing all of the documentation asking them to please release you from the onerous CPA requirement.
What's up with your CPA? We're lawyers so we can relate to the CYA mentality exhibited by the CPA. Standard accounting practices for small labels are fairly simple and easy to review and confirm. If you used a duplication service that can confirm 150 pressed CDs, and 79 CDs remain in inventory, it should be relatively easy for the CPA to confirm your accounting and to fulfill the requirements established in the statement, below. (As for your question, sorry, we don't know any CPAs.)
CPA statement that must be included. If you do manage to obtain a CPA's cooperation, the CPA must furnish the following statement:

"We have examined the attached “Annual Statement of Account Under Compulsory License For Making and Distributing Phonorecords” for the fiscal year ended (date) of (name of the compulsory licensee) applicable to phonorecords embodying (title or titles of nondramatic musical works embodied in phonorecords made under the compulsory license) made under the provisions of section 115 of title 17 of the United States Code, as amended by Pub. L. 94-553, and applicable regulations of the United States Copyright Office. Our examination was made in accordance with generally accepted auditing standards and accordingly, included tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances."

What Do We Need to Cover a Song?

Dear Rich: Do we need permission by the original author/creator of a song to sell/distribute a song cover, or is it simply enough to credit the original creators on the release? What are the basics of licensing/clearing a cover song? Speaking of covers, we recently stumbled on Willie Nelson's version of The Warmth of the Sun. We wondered if this video was around when Willie was having his tax problems, because if it was, we don't see why the judge didn't dismiss all charges and grant Willie sovereign immunity. P.S. The song has a different meaning when you learn it was written the night that JFK died.
Right, you had a question. Check out our response to a similar question last September. And if you're still having trouble sleeping, check out all our other responses dealing with covers and compulsory licensing. (Type "compulsory license" or "cover song" into the "Search Dear Rich" box on the right.) Also, our book, Getting Permission, explains the procedures in detail.

What's the "Right" Way to Post Cover Songs on YouTube?

Dear Rich: My band had a nice show at the Freight and Salvage and we'd like to post some YouTube video but all but one of our tunes is a cover song. What's the current custom on that score on YouTube? I've peeked at some stuff on the web about this, but am not getting very clear answers. The whole YouTube ethic seems to be post and ask forgiveness later, but I'd like to just do it right, if there is a "right" way. Remember the good old days when the "right" way to promote a band was to bribe a DJ or the person at Tower Records who reported to Billboard? But what happens now that radio programmers are out of the picture and record stores owners are MIA. Did digital music wreck the whole payola thing? Or is it more of a crowd-sourcing activity now -- like you bribe folks for YouTube views? Or you pay to get "Likes" at Facebook?
Right, you had a question. The short answer is to give up on doing it the "right" way. The proper way to post a video of a cover tune is to obtain a 'sync license' from the owner of the song -- usually a music publisher that owns songwriting rights. The chances of you, as an unsigned artist, accomplishing that task would be about as likely as obtaining John Lennon's tooth. (BTW, a book on celebrity teeth -- Keith Richards call your dentist -- is apparently available in Canada.). It's for that reason everyone including an aspiring Justin Bieber, apparently posts covers without permission. (Note, that all may change if new punishments are adopted.)
We're talking about covers, here ... YouTube does have a means of locating videos that use major label recordings -- for example if you use a Prince song as a soundtrack for your child's dance routine. YouTube seems to possess digital fingerprints for pre-recorded pop tunes because when we posted a video of our commute to Nolo and included a track by everybody's favorite, Rockwell, we received a notice within hours of posting. YouTube had found unauthorized material on our video (and as punishment was going to run ads over our video). YouTube reserves the right to take down our video but in the interim, the company apparently divides the advertising revenue with the rightsholders -- music publishers and record companies. We're pretty sure YouTube doesn't have similar method for detecting cover versions -- that is, when someone else performs a Prince song. Of course, these unauthorized uses could still be located via old-fashioned text searches or spot scanning of videos. And songwriters who discover covers of their material can still issue a DMCA notice to YouTube (although you don't hear much about that practice these days). So, in summary, the 'post now, deal with it later' approach is the default mechanism for covers.
What about Limelight and Harry Fox? Harry Fox and Limelight are companies that provide a means of obtaining a compulsory license -- the right to release CDs and MP3s of cover songs. These licenses do not apply to audio-visual works.

Using Pop Songs in Videos

My daughter (age 16) and her friends regularly make films and incorporate songs. How hard is it to get releases from established artists like the Rolling Stones, Hoobestank, Katy Perry etc,, particularly if the films are already done? It would be relatively difficult to obtain permission to use recorded pop songs on your daughter’s videos. There are two copyrights at issue and each requires permission. As we've discussed before, you would need a sync right from the music publishers (owners of the composition) and what's sometimes called a master use license from the record companies (owners of the sound recordings). We doubt whether it would be worth the time to go about attempting to do this, and even if you could get in contact, the fees would likely be prohibitive.
A different approach. Let’s start with another question: What does your daughter plan to do with these videos? If she wants to share them with friends and have limited private showings, there probably wouldn’t be an issue especially because the copyright owners would never learn of the use. If she intends to place the videos on YouTube, one of three things could happen: (1) nothing, (2) the song owner would issue a DMCA notice, in which case the video would be removed by YouTube (unless you fought over the issue based on a fair use claim -- see below), or (3) YouTube would flag the video, send you an email stating that it thinks you're using unauthorized music and then run ads along with the video (which is what happened when the Dear Rich Staff posted a video with one of its favorite 80’s pop songs). By the way, the person you can thank for the latter alternative is probably Stephanie Lenz who posted a 29-second YouTube video of her kids dancing to “Let’s Go Crazy” by Prince and then, by challenging the DMCA notice -- because the label failed to consider fair use -- she made it more difficult for labels to send out DMCA notices.

DISCOUNT AT LIMELIGHT. The folks at Limelight, the mechanical licensing utility, are offering a 15% discount on mechanical licenses. If you want to check it out, the company has a special discount code: THANKSRICH15. The 15% discount is good through the end of October, 2011 (and no, FTC, we don't get compensated.)

'Sup With Compulsory Music Licensing?

Dear Rich: I was wondering if you could shed some light on compulsory licensing as it applies to music. I guess what I want to know is why the creators of nondramatic musical compositions aren't granted the absolute control over their work that other creators seem to have. It seems a strange kind of a loophole to me, but as I'm not a lawyer perhaps there is some obvious point that I'm missing. For readers not familiar with copyright jargon, a "nondramatic musical composition" refers to just about every song ever written except To Dream the Impossible Dream (and other songs from theatrical or operatic productions). A "compulsory license" is an arrangement in which permission is not required before using someone else's copyrighted work, provided that a fee is paid.
Section 115A. Under Section 115A of the Copyright Act, a music publisher must permit you to record any song that has previously been recorded and released to the public. In other words, if the songwriters never recorded their song, or if it was played on TV or in a movie but never released on a sound recording or sold as an authorized download, you cannot use the compulsory license. Also, you cannot use the compulsory license if you change the basic melody or fundamental character of the song. For example, a singer cannot alter a song’s lyrics without permission. That said, many people change elements of songs without a problem (as we mentioned in this previous entry). Finally, this license does not include the right to sync a song with a visual such as a video; it's only for the sale of recordings on CD or by download. You can learn more about how to obtain a compulsory license online (or in our Music Law book.)
License or loophole?  There are others who feel the way you do but the Dear Rich Staff is not among them. We've written songs and we've recorded cover songs in our life and having a simple compulsory license program, especially like the ones at Harry Fox and Limelight, allows responsible musicians to pay for the right to record other people's music. It also makes it much easier to get paid for songs. It's possible that in the old days, the compulsory license may have been the way for a cover artist like Pat Boone or Elvis to have a hit from someone else's songwriting. But we believe that a hit is a hit, and songwriting -- whether the writer covers the song or someone else does it -- is usually the most lucrative aspect of the music business.

Compulsory Notice Questions for Ballet CD

Dear Rich: My boyfriend and I have recorded about 30 tracks to make a ballet class CD (my boyfriend is a pianist at the city ballet). All songs on the CD are movie songs and have been previously released to the public on a sound recording such as a CD or record. He initially learned the basic melodies from sheet music, then over the years enhanced the songs with his own progressions, harmonies, may have added a little jazz improv in some of them. Since the CD is for a ballet class, he adapted the length (shortened or extended) and tempo to fit ballet class exercises. My first question is: Based on what I described above, can I take the Notice of Intention to Obtain a Compulsory License route? My second question is: In three of the tracks, my boyfriend did something unconventional -- for example, in one of the three tracks, he played 16 measures of the theme from Charade, then he played 16 measures of Chim Chim Cher-ee from Mary Poppins. then he ended the track by playing the same 16 measures of Charade. Would these types of formats not meet the requirements for a compulsory license? My last question is: some of these songs were from musicals, but films of these musicals were made. Should I be concerned about the songs not meeting the "non-dramatic musical work" requirement? Sorry, your reference to Charade made us search our iTunes database for our Henry Mancini tracks. What a great movie composer. We have a friend who gives us obscure Henry Mancini recordings and as much as we love Pink Panther and stuff like that, he's is so much more than that -- for example, the tracks from the Peter Gunn TV show equaled and excelled the more well known theme music.
Right, you had a question(s). Yes, you can use the compulsory notice for music that includes some improv and personal progressions. It's true that major revisions to a song require permission, but practically, publishers don't really care about what you do between the grooves provided you pay the toll (9.1 cents per track).
As for your second question. If you're using two tunes on one track, you have a few choices: you can pay both publishers 9.1 cents (again, they won't care what you're doing); you can pay only for the dominant/primary tune that you're using and hope that the other publisher doesn't hear (or care) about your "quoting" of the melody. (The other publisher is unlikely to learn of it unless the title is included in the CD notes -- for example, "Track 5: Charade/Chim-Chim-cher-ee.") And finally, you can try to negotiate with both publishers for a lower rate (probably a waste of time unless you're a major label.) We think you're probably fine with the second choice.
And your third question. The compulsory license is for nondramatic uses so your use on a CD would qualify. A dramatic use would be if you wanted a license to perform the music publicly as part of a show.