Q. What is the recent ‘compulory license’ decision by the U.S. Copyright Office dealing with Ringtones?
A. The Copyright Office has concluded that compositions for ringtones are subject to a compulsory license at the statutory rate as outlined under section 115 regarding compositions previously recorded and released in the U.S. Under this section, publishers must grant a license to anyone who wants to distribute digital phonerecord deliveries (DPD’s) as if they were physical units like CD’s and that ringtones are to be considered as DPD’s.
Q: What does ‘statutory rate’ mean?
A: This means the government has set a flat rate to be paid as a royalty pro-rated to the publishers on a given composition, rather than a negotiated rate. As of March 1, 2009 that rate is set at $0.24 per sale, to be paid monthly.
Q. Does the Harry Fox Agency (HFA) handle these licenses and collections on Ringtones like it does on CD’s.
A. No. For the time being the HFA has refused to collect these royalties
Q: Does this decision cover Realtones as well as Ringtones?
A: Only as it relates to the publishing rights to the song. Since a Realtone ( aka: Trutone) is the actual recording artist with a record company, you must negotiate with that record company for the master rights to sell that recording or any part of it.
Q. If I license a master for a Truetone/Realtone from a record company do I still need to pay the publishers also?
A. At present, most record companies are paying the mechanical royalties to the publishing companies as part of their agreements, but not always.
Q. Do I need a Artist/Producer/Performance license to sell Realtones in the U.S.A.?
A. No, there is no Artist/Producer/Performance royalty collected in the U.S.A., however, a Publisher's Performance royalty is collected by the collection societies.
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