A GUIDE TO PUBLISHING,
MECHANICAL ROYALTIES AND
RELEASING COVER VERSIONS
AN ESSENTIAL GUIDE FOR PREPARING TO
RECORD AND RELEASE MUSIC
The music industry revolves around two distinct copyrights: the master right, and the
publishing right. When someone uses your music, money is collected from them and
distributed between the various rights holders of that song.
These two copyrights are:
1. The copyright in the sound recording (also known as the master right)
This is the copyright that exists in a recording of a song, and protects the owner of
that copyright, who is usually either a recording artist or a record label, by giving
them the right to collect money from the use of that sound recording.
2. The copyright in the musical work (also known as the publishing right)
This is the copyright that exists in the underlying song - the
lyrics and the melody. It comes into existence as soon as
evidence of the song exists (for example, a demo
recording, or a written expression of the song), and gives
the owner of that copyright (usually either a songwriter or
music publisher) the right to collect money from the use of
that song - for example when a recording of that song is
played or sold, the song is performed live, or reproduced /
recorded.
It is important to differentiate between these two copyrights, and their owners, as
they offer different income streams - even if the person who wrote and recorded the
song is the same. You may, for example, be in the situation where a band records a
song that only one member of the band wrote - in this example, the individual
songwriter has different rights to the band as a whole that recorded and released
the song.
What money does EmuBands collect for artists?
When a recording that you have distributed via
EmuBands is downloaded or streamed online, a royalty
is generated, which the retailer will pay to you via your
EmuBands account. If you are a record label, then you
will then pay a portion of this royalty on to the
recording artist as per the terms or your agreement with
them. These royalties cover the copyright in the sound
recording.
What sources of income are there for a songwriter?
While every download or stream generates royalties for the holder of the sound
recording copyright, as explained above, they also generate separate royalties for
the songwriter and / or publisher (if the songwriter(s) have signed a publishing
agreement). There are two types of royalty due to songwriters / publishers in this
instance:
1. Mechanical Royalties
2. Performance Royalties
1. Mechanical Royalties:
This type of royalty becomes due when a permanent copy of a sound recording is
made. In terms of physical releases, think of this happening each time a copy of the
song is made e.g. CD manufacture, or CD to CD, CD to DVD or CD to Hard drive. In
terms of digital releases, the mechanical royalty becomes due when a copy of the
master is made from the retailer's server, and is transmitted to the fan as a
permanent download.
In order for the mechanical royalty to become due, first a mechanical license needs
to be granted by the songwriter / publisher - this license grants permission to the
recording artist / label to issue copies of that song, in the form of a sound recording whether that sound recording is a digital download via a store like iTunes or Amazon,
or on a physical format like a CD.
The second part of the process is making the payment from the owner of the sound
recording to the owner of the composition.
So, we can think of this as a two-step process:
1. Receiving permission from the songwriter / publisher
2. Making the payment to the songwriter / publisher
The actions required for each step vary depending on the format of your release
(digital or physical) and the country in which you sell the recordings.
Mechanical Royalties in Physical Recordings:
In order to be able to manufacture CDs, you need to gain permission from the
songwriter / publisher via the relevant collection society in your country. In the UK,
this would be via the MCPS, who are part of PRS For Music. As long as the songwriter
/ publisher is an MCPS member, the MCPS will issue you with a Mechanical License
and you will pay to them a set amount of money, depending on how many copies
you wish to make.
A manufacturer is, by law, not allowed to
proceed with manufacturing CDs until
they are in receipt of the mechanical
licence. Therefore, if you are an artist
wanting to manufacture CDs containing
your own songs, you still need to go
through a process with the MCPS, even if
you aren't a member. They can grant you
a 'Certificate of No Claim', meaning that
you are free to manufacture the CDs
without payment of the mechanical royalty, since you would be making this payment
to yourself. If you are an MCPS member, you will need to set up an exclusion to
avoid MCPS collecting on your behalf.
Mechanicals in Digital Recordings:
In order to understand the way mechanical licenses are granted for digital
recordings, it is important to grasp how things work with physical recordings - hence
why we have explained this above. Where mechanical royalties in physical products
are dealt with solely by the MCPS, for digital usage, the royalties are split between
the MCPS and the PRS, who together make up PRS For Music. More details on these
splits can be found later in this article.
We are now going to raise the concept of the ‘MCPS Licensing Agreement’, as it
helps explain how mechanical licenses are granted for digital recordings.
If the owners of both the sound recording copyright (the artist / label) and the
composition copyright (the songwriter / publisher) are the same entity (for example,
a singer/songwriter), then permission can be said to be granted automatically, as
permission is implied when the artist records their own song.
If the owners of both rights are not the same entity (for example, a record label
releasing recordings by an artist, or, an artist releasing a cover version), then a
licence can be granted by the MCPS/PRS as long as the recording is a 'faithful
reproduction' of the song.
In order to be considered a 'faithful reproduction' of the song, there are certain
things you cannot do.
"For instance, adapting a work – e.g. by changing lyrics or
melody – is off-limits unless the copyright owner agrees
beforehand. Similarly, making off-the-wall arrangements,
adding samples, raps etc could infringe the composer’s
moral rights so must be agreed beforehand. If not, the
MCPS license may be invalidated.
Duncan McCrone, MCPS
Industry practice is that anyone can record and get a mechanical licence as long
as the work has been previously released and is not subject to an ‘FLR’ – a First
Licence Refusal’. This is a mechanism whereby a copyright owner can decide
who releases the work first. After that release, anyone can record and release it,
but conditionally on moral and other neighbouring rights not being infringed.
Straightforward covers should be okay, but if in doubt – ask!”
So, if you wish to record a cover version, bear these factors in mind. It is always
advisable to err on the side of caution when considering whether or not you need
permission to record a cover version. PRS for Music can help track down the
publisher of a particular song if you think you may need to contact them to gain
permission.
2. Performance Royalties:
Whilst a 'mechanical' royalty becomes due on a permanent download of a song,
when a song is streamed through, for example Spotify or Deezer, a royalty is due
through PRS for Music. In essence, the permissions required are the same - the
songwriter, or the publisher, needs to approve the use of their song before you can
record and release the sound recording. Again, unless you are making changes to a
composition, a licence can be granted.
Whilst these are the two sources of income for a songwriter when a recording of
their song is downloaded or streamed, there are also other sources of royalties to
consider.
A songwriter will also earn royalties whenever one of their songs is performed live or
is broadcast on TV or radio (via the collection society PRS for Music), and a recording
artist will also earn money whenever a recording they played on is played in public
(via the PPL, another collection society). There are also royalties due to the owner of
both copyrights when a recording used in a 'sync' - when a recording is used in a film,
tv show, advert or video game.
Tip: Learn how to claim your songwriting royalties properly
whenever you play a gig. For more information the PRS For Music
Gigs And Clubs Scheme – click here.
Making Payments for Mechanical Royalties
Now that we have covered the issue of gaining permission from a songwriter to
make and release a sound recording, we turn to the issue of making the payment of
mechanical and performance royalties due to the relevant songwriter / publisher.
The good news is that, throughout the World, streaming services will pay the
performance royalties due to the relevant local collection societies for you.
For mechanical royalties, it is similar in the vast majority of the World, where the
retailer (e.g. iTunes or Amazon) will pay on your behalf the mechanical royalty due to
the relevant collection society for each territory (e.g. PRS / MCPS in the UK).
So, for a UK-based artist releasing recordings of songs they have written themselves,
as long as they are registered with both PRS and MCPS, they will be able to claim
their mechanical royalties from these societies.
However, this is not always the case with mechanical royalties due on downloads.
For sales from within a few territories, the mechanical royalty will be included within
the royalty that EmuBands pays to you. So, if you are releasing music written by
someone else, you will need to make a payment to the songwriter or the publisher.
The countries where this is happens are:
USA
Canada*
Mexico
India
Pakistan
*For some retailers.
Tip: To view how Mechanical
Royalties are handled for each
contract, just click on 'More Info'
next to each contract when
selecting which ones you want to
opt in to for your release, or
contact your account manager at
EmuBands.
Mechanical Royalties in the USA
The USA is the largest music market in the World, so let's take some time to consider
how things work there.
The process for granting mechanical licenses and paying
mechanical royalties for digital sales in the USA can be
equated to the process of manufacturing CDs in the UK. You
need the license to be granted up front, and sometimes you
will need to make the payment for the number of downloads
up front. This poses an obvious problem, in that you don't
know in advance how many sales you are going to make.
Fortunately, there is an American organisation that can help - think of them as an
American equivalent of the UK's MCPS, discussed above. They are called the Harry
Fox Agency (HFA), and here they explain a little more about what they offer:
"HFA issues licenses, collects and distributes
royalties to, and conducts royalty examinations on
behalf of, music publishers.
If you want to record and distribute a song that was
written by someone else, you need to get a
mechanical license. In the US, a mechanical license
is obtained through HFA or by contacting the
publisher directly. An easy way to obtain a
mechanical license for most songs is through
Songfile®, HFA’s online licensing tool, which was
created specifically to serve the D.I.Y market.
Profile: HFA
Founded: 1927
Subsidiary of:
The National Music
Publishers Association
Users can obtain mechanical licenses for a limited
quantity of CDs, cassettes, LPs, permanent and
full‐length downloads (2,500 or less) through
Songfile. You can access it at www.songfile.com.
Websites:
www.harryfox.com
www.songfile.com
If you can’t find a song in our database, you can ask
HFA to add the song using the ‘Song title not found?
Click here’ link, found on the bottom of the Songfile
song search results page. Another option is to
contact the publisher directly."
Members:
Over 46,000 publisher
members
HQ: New York City
In the USA, the amount of publisher royalties’ an artist or label is responsible for
paying to the writer or publisher depends on the length of the song. HFA explain the
situation on their website, and have a calculator to work it out for you.
Visit these links for more information:
http://www.harryfox.com/public/StatutoryReports.jsp
http://www.harryfox.com/public/RoyaltyRateCalculator.jsp
The cost to use the Songfile service is $16 per song (plus the statutory mechanical
rates), however if you license more than 5 songs in one transaction, this processing
fee is reduced to $14 for each additional song.
Focus: Canada
In Canada, the Canadian Musical Reproduction Rights Agency Ltd (CMRRA) issues
mechanical licenses. They have formed a joint venture
with the Society for Reproduction Rights of Authors,
Composers and Publishers in Canada (SODRAC), called CSI
(CMRRA-SODRAC Inc) to represent the wider interests of
songwriters and publishers.
As an indication, for anyone selling a cover version in
Canada, you will have to pay the publisher a rate of 8.3
Cents (CAD) for a 5-minute song, and 1.66 Cents (CAD) for
each additional minute there after.
We have a contact at CSI, so if you need advice on licenses in Canada, you should
contact your EmuBands account manager for more information.
Focus: Mexico
Mechanical licenses in Mexico are covered by the Sociedad de Autores y
Compositores de Mexico (SACM). If you wish to record a cover version, your first
port of call for permission would be SACM – if, however,
they do not manage the rights for that composition,
then you should contact the rights holder directly.
As with the CMRRA in Canada, EmuBands have a contact
at SACM in Mexico, so if you need advice on mechanical
licenses in Mexico you should contact your EmuBands
account manager for more information.
For India and Pakistan, we would recommend contacting the Publisher directly.
Music Publishers
As we can see, one of the options available to artists or labels releasing recordings in
the USA that were written by someone else is to deal with the publisher directly. So,
what is a music publisher?
Sentric Music is an example of an independent
music publisher. Established in 2006, they now
publish tens of thousands of artists and writers and
operate Worldwide. Sentric work to collect
publishing royalties from live performance,
broadcast, downloads, streaming and other sources
globally. They offer synchronisation opportunities
with TV, film, gaming and advertising clients. Sentric
is free to join; similar to EmuBands, you retain 100%
control of your copyright and, whereas a ‘normal’
publishing agreement may tie you in for a specific
period of time, you can leave at any point with just
28 days' notice. Sentric simply take a small share of
what they earn you.
Profile: Sentric Music
www.sentricmusic.com
info@sentricmusic.com
+44 (0)207 099 5991
Founded: 2006
HQ: Liverpool
Here are some useful tips from Sentric Music:
What Is A Music Publisher?
“Music publishers look after music writers and the songs that they have written. A
publisher should work to maximise income from your publishing copyright through
efficient administration of your songs and creative exploitation (such as
synchronisation or writing/recording partnerships).
What Are The Differences Between a Music Publisher And a Collection Society?
It’s important to understand that publishers and rights societies, such as the PRS for
Music (jointly operated by PRS and MCPS), are different entities. Rights societies
represent the rights and interests of publishers and songwriters. They create
collection policies and set royalty rates for the use of your songs. A publisher should
work proactively to get your songs used and collect any royalty income from those
usages from rights societies around the world.”
So, if you are a songwriter, it could be beneficial to sign with a publisher, so that they
can manage your catalogue of compositions.
What should a songwriter look for from a publishing deal?
“There is no steadfast rule as to what you should give up for a certain level of
publishing investment – it very much depends on your needs and goals – but here are
some key points to consider:
•
•
•
•
•
The publisher’s reputation, previous work and global links
The amount of money being offered (the ‘advance’)
The share of royalties being given up
The length of the agreement (the ‘term’)
The control of copyright being waived (e.g. your moral rights – will you be
able to refuse your song to be used in certain ways?)
With regards to finding a publisher, those which are offering an advance will
probably be looking for a certain level of profile or track record and will most likely
want to tie your rights down for a lengthy term. It’s likely that they would find you via
A&R/management rather than you going to them directly so building your profile and
making these links are important.
The main alternative is seeking a publisher which offers to administer your works for
a small percentage of income rather than offering an advance. They may have no
barrier for entry and so offer artists a good initial option for publishing
representation. In these cases an artist should carefully consider the length of the
term (which should be minimal if no advance is being offered) and what it is the
company will do to ‘work’ your songs: will they make claims for your royalties where
possible?; will they look to sync or licence your songs?; how else will they look to
generate publishing income for you?”
How Can Sentric Music Benefit Songwriters?
“At Sentric, for example, we work with thousands of artists – from first time
songwriters to commercially successful bands. Under our regular agreement we don’t
offer an advance but we do proactively work our catalogue to maximise income for
our artists by making royalty claims directly with rights societies around the world
and regularly securing sync placements. Our artists retain an 80% share of their
income and also the right to decide where their music is used. Sentric is free to join
and artists can leave with only 28 days notice whilst retaining 100% of their
copyright.”
Dealing With A Publisher Directly
As discussed earlier, one option when recording and releasing cover versions is to
deal with the publisher directly, either to gain permission or to arrange payment of
any royalties due to them.
Firstly, you will need to find out who the
publisher of the song is – remember, this
can be a different publisher in each
country, depending on what agreements
the original songwriter signed. To identify
the correct publisher for a given territory,
it would be a good start to contact a
collection society in that country.
However, some countries may maintain a
copyright database. Currently, there is no such thing in the UK, so PRS For Music
would be the best place to start your enquiries. In the USA, there is such a database,
and it can be found at http://www.copyright.gov.
Receiving Your Songwriting Royalties
If you are a songwriter, in order to receive the relevant royalty each time your music
is downloaded or streamed, it is very important that your songs are registered
correctly with collection societies – both a mechanical rights society (e.g. MCPS in
the UK) and a performing rights society (e.g. PRS in the UK).
You can do this yourself, or if you have a publisher, they would help with the
registration process. The collection societies should have reciprocal agreements in
place with others around the World, which helps ensure that you receive your
songwriting royalties from sales in other territories – but it is important to check
with your collection society which territories are covered, and to seek advice if you
are seeing sales from other territories.
Tip: PPL are different from PRS / MCPS, they represent the rights in
Sound Recordings. Click here to see an interview with PPL. This explains
more about them and how to register recordings with them.
Sentric Music have provided these guidelines as to how much you can expect to
receive for songwriting royalties – remember, this is on top of the sound recording
royalties you will receive through EmuBands (subject to the conditions mentioned
above in certain countries, for example the USA):
“For major online services, the PRS and MCPS charge a licence fee based on a
percentage of the service’s gross revenue. They then split that fee between each
other depending on the type of service:
•
•
•
Permanent download services (eg iTunes) – 75% MCPS // 25% PRS
On demand streaming services (eg Spotify) – 50% to each
Webcasting services – 25% MCPS // 75% PRS
This means that income from services can vary but, as a rough guide, at Sentric
we’ve received the following from the PRS and MCPS for our artists:
PRS
• £0.005 - £0.015 per iTunes download (£5.00 - £15.00 per 1000 downloads)
• £0.0008 - £0.001 per Spotify stream (£0.80 - £1.00 per 1000 streams)
MCPS
• £0.02 - £0.06 per iTunes download (£20.00 - £60.00 per 1000 downloads)
• £0.0008 and 0.001 per Spotify stream (£0.80 - £1.00 per 1000 streams)”
SUMMARY / CONCLUSION:
We hope that you have found this guide to Publishing, Mechanicals and Releasing
Cover Versions useful. Please feel free to share it with anyone that you may feel
might find it useful. Some key points to remember are:
•
PPL represent the rights owners of the Master Rights – record companies and
recording artists
•
PRS For Music represent the rights owners of the Publishing Rights – music
publishers and songwriters
•
When releasing cover versions, you may need to gain permission first and pay
Mechanical Royalties to the rights holder(s) for sales in certain territories
•
You will earn money each time a recording you perform on, or a song you have
written, is performed in public. These royalties will come from Collection
Societies.
•
It is very important to register your releases with the relevant Collection
Societies, so that you can claim these royalties due to you.
Published: August 2013
Authors:
Ally Gray – Co-Founder & Managing Director, EmuBands.
ally@emubands.com / @AllyGray7
Suzie McGee – Artist Relations & Marketing Manager, EmuBands
suzie@emubands.com
Contributors:
Duncan McCrone, Senior Manager at MCPS Scotland - duncan.mccrone@mcps.co.uk
About EmuBands:
EmuBands provides a simple-to-use but powerful digital music distribution service
for artists and record companies to sell music online through iTunes, Spotify,
Amazon MP3 and many more of the World's leading digital music services.
In a non-exclusive deal, artists and labels earn 100% of the royalties generated from
sales, and maintain full ownership and control of their rights, and with a simple oneoff pricing model, there are no annual fees. Get started now – click on the image
below to create your account.
We would like to thank the various contributors that helped with this guide – from Sentric
Music, MCPS / PRS For Music and HFA.
Image credits:
“Duncan McCrone” – © Dave Arcari
“Advice” – courtesy of Stuart Miles / FreeDigitalPhotos.net
“Copyright Symbol” – courtesy of Stuart Miles / FreeDigitalPhotos.net
“Collecting Money” – courtesy of scottchan / FreeDigitalPhotos.net
“CDs” – courtesy of artzenter / FreeDigitalPhotos.net
“US Flag” – courtesy of creativedoxphoto / FreeDigitalPhotos.net
“Canadian Flag” – courtesy of sippakorn / FreeDigitalPhotos.net
“Mexican Flag” – courtesy of domdeen / FreeDigitalPhotos.net
“Sheet Music” – courtesy of Grant Cochrane / FreeDigitalPhotos.net
“Playing Guitar” – courtesy of jiggoja / FreeDigitalPhotos.net
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