Did you know that, even if you give a download of a cover song away for free, you need to pay the composer? I see lots of musicians offering cover versions of other people’s songs, without paying the composers. Sometimes, they put them on CDs, sometimes they offer them for free download. The composer also needs to get paid for live performances. The laws are different in different parts of the world, but in the U.S., the law is clear.
Basically, you need to pay about $.09/download or sale, and about $.01/stream, whether you give it away, or not. There will probably be a small fee for obtaining the license, in the first place. The rates are the same, whether you’re offering the songs for free, or not. Typically, for live performances, the venue takes care of that end of it.
How To Obtain A License For Covers
Here are some resources for obtaining the rights to stream, offer downloads, or offer CDs of cover songs.
It works differently on YouTube. YouTube has a less than perfect system. They have made deals with many of the music publishing companies, and will monetize your videos, and give a portion of the money to the composers. If you put up a cover, they’ll scan it, and see if it matches a song in their database. If it does, they’ll put ads on it. You don’t have a choice, they have to pay the composer, and that’s how they’re going to fund it.
If YouTube doesn’t recognize the song, it won’t put ads on (unless you set the video to monetize). However, that simply means that they either didn’t recognize the song, or they don’t have a deal with that particular publisher. That doesn’t mean you aren’t responsible for paying the composer! Technically, you may be in violation of the law, in that case (I’m not a lawyer).
Here’s how to find out if YouTube has a deal with the composer.
I know Spotify has deals with some publishers. I suspect Pandora does too. I know Pandora has songs from the cast of Glee on their service. Those are covers. So, I’m guessing that either they have a deal with the publishers, or the Glee producers have obtained the rights. But, from what I can tell, the $.01/stream rate for obtaining the rights is higher than what Pandora or Spotify pay out. But if they don’t have a deal for a particular song, you would be responsible for obtaining the rights, and paying the songwriting royalties. I’m not sure if either Spotify, or Pandora has any checks to see if a song is cleared.
There’s a local open mic that has an “originals only” policy. Why? Because they don’t pay songwriting royalties. In most cases, venues that host live music are responsible for paying what’s called performance royalties. If you were to do a cover at an open mic, the venue may be responsible for paying the songwriter (or whoever owns the publishing rights). In practice, it doesn’t always happen.
What’s supposed to happen is that the venue pays a publishing organization (such as ASCAP or BMI), and they distribute the money to the songwriters. It’s often an annual fee, and the music goes into a pool that gets divided up amongst the songwriters in the organization. The yearly fee depends on what kind of venue it is, whether there is live music, or just recorded (Yes, venues need to pay for recorded music too).
Putting Covers On A CD (Not that kind of cover)
Let’s suppose you wanted to release a CD of Christmas songs, or just plain old covers. Or do like one paint company did, and release an album of covers that all had colors in the name (it was a promotional stunt). Easy Song Licensing charges $14.99 (at the time of this writing), to get the license, and then you pay the royalty itself. If you were planning to sell 1,000 CDs, you might buy the rights to sell that many. Your licensing costs would be $91.00/song ($.091 times 1,000), plus the $14.99 fee. So, that’s $105.99/song. If there are 12 songs — your total fees would add up to $1271.88, or, about $1.27/CD. That’s not too bad, considering you’re going to sell it for $10-$15. If you need more licenses (if you sell, or give away more than 1,000 CDs), they cut their fee down to $7.50). The rate is slightly higher for songs longer than 5 minutes.
OK, that’s probably more than you ever wanted to know, about licensing music. But we should pay the songwriters. When you have a million selling hit, you want to get paid, don’t you?