| Royalty Free Music > Music News > Ringtones Now Subject To Mechanical Royalties
August 7th, 2008
Over the past few years, the music industry has struggled with managing new technology and new ways of selling music. Digital downloads, ringtones, and ringbacks have been a source of contention between artists and music executives, who often disagree about how royalties should be allocated. Until recently, individuals and companies who wanted to sell ringtones had to negotiate a royalty rate with publishers or mechanical royalty collection agencies such as Harry Fox. However, the U.S. Copyright Office announced last year that it would begin to implement compulsory licenses for ringtones.
What Is A Compulsory License?
A compulsory license allows individuals and businesses to use copyrighted works without obtaining permission from publishers. For example, if your cover band wants to record its own version of "Yesterday", you could do so without getting approval from the Beatles' publisher, Sony/ATV. However, you are required to pay mechanical royalties for using the song. The current statutory mechanical rate is $.091 per unit, meaning that if you sold 50,000 copies of your cover song, you would be responsible making $4,550 in royalty payments. The U.S. Copyright Office's decision regarding ringtones basically extends the compulsory license and mechanical license requirements that are already in place for physical CD sales to ringtone sales.
I Want To Sell Ringtones Created From Copyrighted Music. How Do I Do This?
The first step is to notify the publisher of the copyrighted music about your intent to sell a portion of the song as a ringtone. If you are selling multiple ringtones, you will need to notify the publishers of each individual song. The publishers will then send you a licensing agreement to sign. After the agreement has been executed, you will be responsible for issuing statements and paying $.091 per ringtone in mechanical royalties for sales every month. If you are unable to locate a publisher, you are still required to prepare statements and hold the money in escrow until the publisher has been contacted.
I Don't Want To Pay Mechanical Royalties For Ringtone Sales. Do Royalty Free Ringtones Exist?
Not everyone wants the hassle of notifying publishers and keeping detailed records of sales in order to sell ringtones. Additionally, some people believe that the U.S. Copyright Office's mechanical royalty rate for ringtones is unfair because you are required to pay the same mechanical royalty rate for using a portion of a song as a ringtone as someone recording an entire song to sell on a CD. There is an alternative, however. Any of the tracks from Royaltyfreemusic.com's library of royalty free music can be sold as royalty free ringtones according to the terms of our licensing agreement . In other words, when you purchase royalty free music from our library, you can edit the tracks to create and sell your own royalty free ringtones without notifying Royaltyfreemusic.com, paying additional fees, or preparing monthly royalty statements. Whether you are looking for hip-hop beats, a funky guitar groove, soothing classical music, or funny sound effects, Royaltyfreemusic.com has royalty free ringtones to fit your style and mood. Check out Electronic Loops Volume 2 and Retro Funk Loops 2 from our loops series to create your own custom royalty free ringtones.
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