Copyrights for Music, Part II: What the Music Copyrights Mean to the Owners

By Robert Parker

The licensing procedures and ownership rights are different for musical compositions than for sound recordings.

Musical Composition Copyrights

Composers – unlike the owners of sound recording copyrights and other kinds of copyrighted works – CANNOT always prevent others from performing or recording their musical compositions. Copyright law allows for a “Compulsory License” of a composition, meaning that the composer can be compelled by law to allow others to record his or her musical compositions, on certain conditions (as described below).  If a composer denies someone the right to record a new version of his composition, the person denied can still utilize the compulsory license provisions of the copyright statute and regulations and is then entitled to record the new rendition composition and to sell audio-only copies of that new sound recording.

The Copyright Office sets a universal royalty rate that anyone must pay the composer (or the composer’s music publishing company or other owner of the copyright) to record a composition. This rate is the statutory “mechanical royalty rate.” Recall the piano rolls we discussed last week, which could mechanically reproduce the composition? This is where the word “mechanical” in “mechanical license” or “mechanical rate” comes from. This royalty rate is often referred to as “the statutory rate” or  as “payment at stat.”

At the date this posting, the statutory rate is 9.1¢ for each record sold for songs (slightly more if the composition is over five minutes in length). Composers are free to license their compositions for less than the statutory rate if they choose. Technically, they could ask for more than the statutory rate. But in that case, the recording artist could just elect to pay the (lower) statutory rate without the composer’s permission. Using the compulsory license procedure does not require the composer’s consent, but requires the recording artist to comply with more cumbersome statutory procedures than are required to obtain a consensual license directly from the owner of the musical composition. For this reason, the compulsory license is rarely used.

Incidentally, recording agreements with record companies normally contain a clause (called a “Controlled Compositions Clause”) saying that if the recording artist records his or her own original musical compositions, the record company will have the right to make and release records featuring the artist that contain those compositions. It’s not unusual for record companies to pay the artist mechanical royalties at 75% of the “statutory royalty rate.” (And so currently, 75% of 9.1 cents per song per record.) That rate can be negotiated upwards during recording contract negotiations.   

Sound Recording Copyrights

Unlike composers, the owners of sound recordings can arbitrarily deny others the right to copy or otherwise use their sound recordings. But in order to own the copyright of a sound recording containing a composition created by an unrelated composer, the sound recording owner must first secure a mechanical license as described above (or negotiate a license for the composition, directly). Once the sound recording owner does so, the sound recording owner has the same rights as any other copyright owner — and owns the exclusive rights to reproduce and distribute audio-only copies of the sound recording. Indeed, the sound recording owner has the right, as do most copyright owners, to arbitrarily prevent others from using or copying the sound recording without her permission. She or he can also negotiate the royalty rate, limit its use, and generally exercise all the other rights of copyright ownership.

As mentioned above, the compulsory license provisions of the copyright statute only allow the sound recording owner to sell audio-only copies of a composition. The sound recording owner cannot, for example, take his or her sound recording and put it in a film soundtrack. That requires a separate and different permission from the owner of the musical composition, called a “synchronization license” and the owner of the musical composition is entitled to arbitrarily deny such a license.