Mechanical License & Cover Songs - Canada

 

Like many independent artists, my first release was a great learning experience. I spent many hours on the Internet researching everything I could about the business end of releasing a record; from bar codes to radio campaigns. During production for my label’s second project, The Ria Reece Band; I encountered something that I had not dealt with previously. The wonderful world of Mechanical Licensing. This post has been written especially for fellow Canadian independent music entrepreneurs who need some insight on the subject of adding cover songs to their future releases.

By all means, I am not a lawyer. The information below should not be considered as legal advice.

Here is the scoop. You can cover any song by any artist that has already been commercially released without acquiring permission from the copyright holder (the person who wrote the song). What!? …. Yup. So long as you do not change the lyrics (language) or dramatically change the song; you can re-record and release a cover version of any song out there. Even Blurred Lines by Robin Thicke that was just released last year? Yup. However, you do have to acquire a Mechanical License for the song. In Canada, you can acquire a mechanical license from CMRRA (Canadian Musical Reproduction Rights Agency Ltd). The mechanical license cost 8.1 cents per song, per copy manufactured, where the playing time is five minutes or less. And this is a flat rate regardless if the song you want to license is a major label hit or not, and this with very few exceptions. So lets say you want to print 1000 copies of your new CD and the CD includes one cover song; you pay 81$ to CMRRA (1000 x 0.081$ = 81$) and they will grant you the paper work so you can legally print and sell 1000 copies of your CD which includes a cover song. If you want to print 2000 copies of your CD, you will be paying double, 162$, to license one song.

Here are a few points to keep in mind. When you purchase a mechanical license form CMRRA, you are essentially paying for the right to duplicate a work of art (song). Even if you give away all your CD’s for free; you still have to pay for the right to duplicate the song. When you bring your newly recorded CD in for duplication, the duplication plante hands you a disclaimer form. The form asks if you are the official copyright holder of the content you want to have duplicated. If you have any cover songs on your CD, you do not own the copyright to them, and the duplication guys will need to see your mechanical license from CMRRA for those cover songs. If you don’t have one, they will not be able to proceed with duplication. And the CMRRA license will clearly indicate how many copies you are authorized to duplicate. Once the CD’s are pressed, you can sell them at whatever price you want and you won’t need to pay any additional royalties. However, you will have to pay to press additional copies.

Remember; CMRRA is just the middle man. Any money they collect from you, will be distributed to the song’s copyright holder(s).

Other things you should know …. and this is where things get tricky. Mechanical licenses are territorial. This means that your CMRRA license does not cover you worldwide. CMRRA grants you a license to duplicate (get your CD’s printed) in Canada and distribute (sell) in Canada. So if you are planning to have your CD’s duplicated from a company here (in Canada), and plan to sell your CD’s at your local shows and on consignment at the local music store; then, you’re good to go. Also, and this is a gray zone, if you sell your CD’s over the Internet yourself on your own website or through a Canadian distributor, you can get away with selling them worldwide. Because technically, you are selling the CD’s from Canada. If you want to sell your CD’s through an American distributor such as CD Baby, you will need a mechanical license from the Harry Fox Agency or through a service like LimeLight. And technically, you would have to have your CD’s printed in the US and you would not be able to legally sell them in Canada, unless of course, your fans purchased the CD’s over the Internet through your US distributor …Wow.

I was fist turned on to the idea of adding cover song’s to Disco Fairy Records’s second release after reading about a fast and easy way to clear mechanical licenses.
(Click here to view the article)
It actually is quick and easy and straightforward; … if you live in the US. Keep in mind fellow Canadians, that most of the music business articles on the Internet that you might stumble upon have been written in the United States. Which is Ok. I love reading DIY Musician and I recommend it to all. However, when the talk goes to Copyright Laws and Royalty Distribution, make sure you read up on the subject from agencies from your own country.

A few other important points to keep in mind. The mechanical license you acquire from CMRRA only covers physical copies. CMRRA does not issue licenses for digital downloads. The subject of royalties and digital downloads is still somewhat of a gray zone I think. In Canada and Europe and virtually the entire planet; it is the digital download store’s responsibility (iTunes, Amazon) to pay the songwriter his royalties. In the US, it is the seller’s (your) responsibility, to pay the songwriter royalties. You can do so by acquiring a mechanical license for digital downloads in the US through the Harry Fox Agency.

One last important subject that should be addressed; the Public Domain. There is a lot of misinformation about this subject. In Canada, a work (song) falls in the public domain 50 years after the death of the last surviving author. In the US, not the same copyright laws. Also, there is a possibility that an artist’s repertoire may have been taken over by his estate. If a song was recorded after 1923, chances are that it is not in the public domain. Also, if you do happen to record a song that is in the Public Domain, you must record your own version of it. This means you can’t us someone else’s copyright arrangement without paying them royalties.