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Covers, CD's and mechanical royalties

Discussion in 'Band Management [BG]' started by rabid_granny, Dec 19, 2002.

  1. Hmmm, I gotta question about putting covers on CD's that you'd sell at concerts.

    Assume a band does a killer cover that becomes a signature song. They put that song on a homemade CD that they sell at club gigs.

    - Do they need permission to sell the cover song?
    - Do they only pay the mechanical royalties on the publishing copyright? No other costs?

    So if the band gets caught but kept track of the royalties, all they need to do is cut a cheque for $X and everyone is happy, yes?

    I remember reading that Coca Cola could have used Van Halen's "Right Now" without the bands consent but hammered out a deal with them anyways, to be on the safe side.

    This is based on books I read a couple years ago such as Geoffrey Hull's "The Recording Industry" and Donald Passman's "Everything you need to know...".
  2. Craig Garfinkel

    Craig Garfinkel

    Aug 25, 2000
    Hartford, CT
    Endorsing Artist: Sadowsky Guitars
    No. But you do need a mechanical license. Here's how it works. All mechanical licenses are compulsory (they cannot be denied to anyone) for any song that's already been recorded by an artist. The license is provided by the publisher. As Ed says, you can go through the Harry Fox Agency for most published songs, but by doing so you pay for the number of CDs you manufacture . If you go directly to the publisher, you can usually work a deal so that you "pay as you go" on sales instead of all up front. Publishers love to bypass Harry Fox (to whom they have to pay a commission).

    The statutory rate is currently (I believe still) the greater of either 7.1 cents per song up to five minutes or 1.35 cents per minute of playing time or fraction thereof.

    For example, my band covered "The Chicken" on our album. The song was written by James "Pee Wee" Ellis, and the publisher is Unichappell Music. Our version is 5:07 in length. We did go through Harry Fox, so we paid the rate for 6 minutes which is 7.1 cents plus 1.35 cents x 1000 CDs manufactured = $84.50.

    Could you record your CD and sell it without paying for the license and not get caught? Absolutely. Does that make it cool? Nope. Do the right thing. Karma, baby.

    And BTW, I'd be interested to know how Coca Cola could use VH's recording of "Right Now" without permission? Compulsory licenses only apply to "phonorecords" (including CDs, tapes, etc.), and does not apply to use in advertising. The copyright holder can charge whatever he wants for this kind of use. If Coke coulda used it for nothin', they wouldn't need a "safe side". ;)
  3. I heard a couple of stories about deals being made. I also heard that the same story about the Rolling Stones ("Start me up") and that Richard Ashcroft band ("Bittersweet Symphony"), what the Verve or Vervepipe?

    I remember reading about how they realized any one could use the song so they signed an exclusive deal with Nike.

    Anyone else heard about this?
  4. moley


    Sep 5, 2002
    Hampshire, UK
    The band was The Verve. Was it "Start me up" they used for that? I forget which Stones song it was. I don't know any details of the story, but I think I remember hearing about them getting in trouble over using that bit from the Stones song?

    It may be just a difference in the law between the UK and US (or maybe I'm just wrong), but I thought that it was necessary to get permission to record covers.

    How does this work as far as the (increasingly common, it seems) practice of taking parts of other people's songs and using them in your own - not covering the songs as such, but not sampling them either. E.g. Gangsta's Paradise (Coolio). Would Coolio have to have got permission from Stevie Wonder?
  5. Mike Dimin

    Mike Dimin Banned

    Dec 11, 1999
    Here's a cool story. My CD, "Big Droppins" has a version of Horace Silver's "Song For My Father" as well as Jaco's "Three Views of a Secret". Neither of the publishers use Harry Fox to administer their license. Horace Silver uses Ecaroh Music (Horace spelled backwards). When you call them, you get to speak to Hoace Silver himself - now how cool is that.

    Jaco's music is also not handled by Harry Fox. It took me a while to find out who to deal with but in the end I was dealing directly with Ingrid and Felix Pastorius. Now that was also very cool

  6. moley


    Sep 5, 2002
    Hampshire, UK
    Wow, that is cool Mike. I should record a cover of a Horace tune & a Jaco tune just to get to speak to 'em ;)
  7. Sorry about the confusion. I was thinking "Start Me Up" for Microsoft and "Bittersweet Symphony" for Nike.

    Mmmm, another question. My friend demonstrated the musical term "quoting" with a few jazz recordings. (ex. Playing the Charlie Brown theme song in the middle of a solo)

    I guess if you are recording a live performance (for resale) and you "quote" while you solo, you owe money? Even if it lasts only a few seconds?
  8. oddentity

    oddentity Supporting Member

    Nov 20, 2000
    If I remember correctly, Pepsi initially asked VH for the use of the original recording. When VH refused, Pepsi said, "Fine, we'll record our own version." VH decided they'd rather have the real song out there than a fake, so they allowed Pepsi to license the song.

    EDIT: Hategear is right!
  9. Hategear

    Hategear Workin' hard at hardly workin'.

    Apr 6, 2001
    Appleton, Swissconsin
    When was this? I thought Pepsi used "Right Now" in their Clear Pepsi ads?
  10. oddentity

    oddentity Supporting Member

    Nov 20, 2000
    Pepsi, Coke, it's all the same! ;)
  11. kaboom133


    Oct 19, 2001
    Latrobe PA
    i sure do miss clear pepsi:(
  12. a) Yes, I am serious. Unfortunately, my education as an accountant has warped me to the point where I see everything in terms of dollars and cents, Matrix-style.

    b) Yes, I should be practicing. Practice is good...
  13. Craig Garfinkel

    Craig Garfinkel

    Aug 25, 2000
    Hartford, CT
    Endorsing Artist: Sadowsky Guitars
    Anticipating the next question, and expanding on granny's inquiry (don't sweat it man, there's no such thing as a stupid question :cool: )...

    Do you owe a performance royalty to the publishers of songs when you play covers live? Technically, yes....but in practice, no.

    Realizing the near impossibility of tracking the royalties, let alone collecting them from bands, the industry worked it out so that the live venues themselves are responsible for payment. The principle is basically the same as when a radio station plays a song and must pay a royalty. But instead of keeping track of actual songs played, and how often, the clubs pay BMI and ASCAP (you may have noticed their logo stickers on a club's front door) a monthly fee that is determined by how often they have bands performing, what percentage is cover material, etc. Anyone know any of the detail as to how this is computed, and what the actual fees amount to?

    The funds go into a pool and are shared by songwriters collectively, again based on some deep dark secret formula. I'm still waiting for my check :confused: .

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