Burning that Graduation CD … Legally

Myth: My teenage child asked me “Dad can I go to jail or how much trouble can I get in if I pass out a CD of our favorite songs of the year on the last day of school.”

Truth: My first thought was do not worry about it, how much trouble could she get in for making fifty CDs and passing them out to friends? But, as I gave this some thought and realized, as would any parent of a teenager today - that his child has the innate ability to copy and burn music CDs without giving any thought to the legal process involved or its implications – I became more circumspect. For in today's climate, when high school kids are being sued by the recording industry for sharing songs over the Internet, I thought I should look for a better answer, especially since its seems that it’s always the parents who end up footing the bill to resolve these cases of copyright infringement.

What my kid was looking for was the right to make a compilation CD containing copies of her favorite songs, songs recorded by different bands and released by different record companies on different CDs.

As I explained to my daughter, music is a complicated business. Because it can take a whole team to get music to your ear, there are all sorts of legal property interests involved in that simple prospective recording my daughter wants to make. And not having the financial muscle of a record company such as Rhino or Rykodisc, who make a living putting out compilation albums, this could be difficult.

To answer my daughter’s question, and find a means for her to make her CD, two basic questions must be addressed. Who owns the recorded performance (think “the studio master recording”) and who owns the underlying song (think “composer” or “music publisher”). Permission (known as a license in legal parlance) must be obtained from each of these owners for my daughter to make her CD.

The first question - who owns the performance - can be very simple or very complex, depending on any number of factors. For example, there could be a band (which in turn could have several independent parties involved “think John, Paul, George and Ringo” think drums, bass, lead and rhythm guitar). The musicians get together and play and if a recording is made, there might be an engineer who helped make it. If these parties have no agreement, each of them would own part of the copyright to the master recording and could give my daughter a right to use the master recording and distribute copies made from it. However, this is usually not the case as typically a record company is involved. The record company might have limited rights to the master recording – in which case my daughter might have to contact the performers to obtain use of the master recording. The record company might have all rights to the master recording - in which case my daughter could call the record company and beg for permission to use to make her CD. The cost associated with obtaining this right is negotiable and you may or may not be able to obtain it, depending on policy and in part on whether the record company is a major record label, or a independent artist owned one (remember, I mentioned that it would be good to have the financial muscle, and track record, of Rhino or Rykodisc, which are in the business of making compilation albums). Multiply this task by having to deal with ten separate record companies and you see the problem.

The second question – who owns the underlying song – and how to obtain permission to use it is easier to deal with because it is regulated by copyright law. Under the compulsory mechanical licensing provisions of the U.S. Copyright Act, once a song is recorded and commercially released, any other party can use it on their recording, provided, among other things, that the party wishing to use the song provides notice to the owner of the song and pays a compulsory royalty, at a set rate, to use the song. When this is done properly, the user of the song is automatically granted a mechanical license and can use the recorded song on his or her CD. Today, without following the somewhat cumbersome procedures set forth in the copyright act, my daughter can easily obtain a mechanical license to use the song on her CD. Here is how it is done. There is a company called Harry Fox and they are in the business of selling mechanical licenses and represent almost all of songwriters in the universe. Harry Fox has a minimum fee for up making a minimum of 500 copies and the current fee is 8.5 cents for a song 5 minutes or less. It's a little more for longer songs. They take credit cards and you do it all on line.
However, if you want to make fewer than 500 copies, say 100 copies, she could save a few dollars by using the more cumbersome compulsory license provisions of the Copyright Act and paying only for the actual number of copies made and distributed.

What that means is that, after I have obtained the rights from the applicable record company, for an additional $42.50 I can buy the license (permission) to make up to 500 copies of Armstrong's cover of “What a Wonderful World.” More songs can be added to your CD at that same license fee. In this computer age, the license is returned by email within two days.

Thus for $425, plus the unknown costs to the various record companies for your daughter’s use of their master recordings, you get to show your kids the right way to make music CDs and pass them around (up to 500 times), or you show them why they can not, and should not, make the CDs in the first place if they can’t pony up the money and time to make it happen correctly.

One more thing -- I wish the Recording industry, and Congress, would find a simpler, less expensive, and less time consuming way, for my daughter to make her CDs legally so I could teach her a valuable lesson about respect for the law and respect for the music and musicians that she enjoys. It would seem that they are giving her a lesson about why she should burn those 500 illegal CDs. I hope she won’t follow it. (Thanks to Jay Schornstein for his input on this article.)

©2004 Kohel Haver

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