WRITERS HOW DO I GET PAID ON RECORD SALES

How do I get paid on record sales? This is a common question I get frequently. It can get complicated quick, however I will try to give you the short answer. Also there's the artist side to this. Do I need a license to record another persons song? Once again that can get complicated also. The short answer is yes.

Mechanical Royalties

The COMPULSORY MECHANICAL LICENSE provisions of the Copyright Act are the bread and butter for songwriters. Once a songwriters' composition has been recorded and distributed to the public, copyright registration entitles the songwriter to statutory MECHANICAL ROYALTIES whenever that songwriter's composition is further recorded.

The company putting out the record is required to pay the songwriter a mechanical royalty for each record manufactured. Effective January 1, 2006 the statutory mechanical rate is $.091 for songs 5 minutes or less, or $.0175 per minute or fraction thereof per copy for songs over 5 minutes.

Mechanical royalties can add up to a lot of money. For example, at the current statutory mechanical royalty rate, if your song is less than five minutes and is on a CD which sells one million copies you would be entitled to NINETY ONE THOUSAND ($91,000) DOLLARS.

Because the statutory mechanical rate is increased periodically, it is best to seek payment for a mechanical license keyed to the statutory mechanical rate in effect at the time of manufacture. Record companies, on the other hand, may try to key the rate to that which is in effect at the time of initial release. Thus if a record is reissued many years after its initial release the composer/publisher would get the rate in effect at the time of reissue rather than the lower rate at the time of initial release.

On a practical note, many copyright owners hire the The Harry Fox Agency to issue their mechanical licenses and collect all mechanical royalties due. This saves them much paperwork and hassles.

Due to the various requirements necessary to obtain a compulsory mechanical license many record companies try to negotiate mechanical licenses directly with the copyright owner or its representative.

If this is not possible, perhaps because the copyright owner cannot be determined or located, you should obtain a compulsory mechanical license by complying with all applicable regulations for obtaining a compulsory mechanical license. (See Circular 73 - Compulsory License for Making and Distributing Phonorecords for this information). This is a "safe harbor" approach and by so doing you will be immune from a copyright infringement suit by the copyright owner.

Before obtaining a compulsory mechanical license however, you might want to check the online databases at The Harry Fox Agency, ASCAP, BMI and SESAC to see if you can locate the copyright owner and negotiate a mechanical license directly.

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