Why Do You Need a License?
When you record a cover version of someone else’s song and want to distribute it (via digital download or physical product [cd, vinyl, etc.]) then you need a mechanical license. A cover song is any new recording of a previously released song by someone other than the original artist or composer. A mechanical license is the agreement between you (the artist) and the publishers (owners of the composition) that allows you to distribute your new recording in exchange for royalties.
What are the royalty rates? Royalties are calculated by the number of units you’ve sold. The current mechanical royalty rate for digital downloads is 12¢ for recordings of a song 5 minutes or less, and 2.31¢ per minute or fraction thereof for those over 5 minutes.
For example, if your cover song is 3:40 in length and you sell 100 units, the royalty rate you would pay the publisher would be $12 ($.12 x 100 units). However, if your cover song is 5:42 in length and you sell 100 units, the royalty rate you would pay the publisher would be $13.86 ($.0231 x 6 min* = 0.1386 x 100 units).
*If your song is over 5 minutes in length, the minutes used in the calculation are rounded up. So 5:01 = 6 minutes; 6:30 = 7 minutes, etc.
A mechanical license falls under Section 115 of the U.S. Copyright Act. Here’s the exact text:
When phonorecords of a nondramatic musical work have been distributed to the public in the United States under the authority of the copyright owner, any other person, including those who make phonorecords or digital phonorecord deliveries, may, by complying with the provisions of this section, obtain a compulsory license to make and distribute phonorecords of the work. A compulsory license includes the privilege of making a musical arrangement of the work to the extent necessary to conform it to the style or manner of interpretation of the performance involved, but the arrangement shall not change the basic melody or fundamental character of the work.
The last sentence is the most important in qualifying your cover for a mechanical. It cannot change the basic melody or fundamental character of the work. That is, you cannot change the lyrics, add lyrics, write new lyrics, or use the lyrics over a new melody. Each of these uses requires a different license – more information on this below.
When don’t you need a mechanical license?
- Streaming - If you only intend to stream your cover song on music services like Spotify, Apple Music, Pandora and Tidal, then you do not need to obtain a mechanical license. Those services have mechanical licensing agreements in place with publishers to cover these uses.
- Distribution outside the United States - If you are not distributing your song in the United States then you do not need to obtain this license, as our license only covers U.S. distribution. In most countries outside of the U.S. the digital stores withhold a percentage of your sale for the due mechanical royalty and directly pay that amount to the appropriate societies and/or publishers.
What doesn’t require a mechanical license, but still requires a license?
- Samples – using any piece of the original sound recording. This includes, but is not limited to: the beat, the instrumental track, the backing vocals, the chorus, or the original artist’s vocals. Why? The sound recording is copyrighted and if you want to use it, you have to obtain the owner’s permission and pay a royalty for the use. This is a negotiable fee and depending on the popularity of the song, can be pretty expensive. You also have to clear the sample use directly with the publisher.
- Interpolations – using the lyrics of another song in your own composition. If it is identifiable as having originated from someone else’s song, you need to obtain an interpolation license from the publisher. The fee for this is also negotiable.
- Remixes – The main characteristic of a remix is that it appropriates and changes other materials to create something new. Because a remix is a variant of an original recording, it cannot be cleared through a mechanical license, as it is not a cover song.