Mechanical Silo

Which of the following statements about MFN are correct?

- A Belmont student could use the MFN concept if someone asks them to play, sing and/or engineer for free (no dinero) on a demo session. That way they could do a favor for someone but still protect themselves if others on the project get paid - MFN means Most Favored Nations - MFN in a music publishing license or contract means that the publisher granting the license will receive the highest rate granted to any publisher on the project

Which statements about the Mechanical silo are correct. Select them! Assume the song(s) have Copyright protection, i.e. they're NOT In the Public Domain (PD)

- For the most part, a Mechanical license is required by Federal Copyright Law to create and distribute a musical product that needs a "mechanical device" for the consumer to consume it and the consumer owns or "possesses" a copy - When Recorded Music sales (piano rolls, cylinders, discs) seriously disrupted Sheet Music sales the solution was a Mechanical License and Statutory rate enacted by the U.S. Congress. * btw, (piano rolls, cylinders, discs) is not a trick part of the question. Those were the first products that contained "Recorded" Music - A publisher and/or songwriter has firm control of the first use of a song. After a song is used (published) anyone can record it, using a Compulsory Mechanical license if necessary - The U.S. Statutory Mechanical rate is $.091 per song/per unit sold. If a particular song is longer than 5 minutes, the rate becomes $.0175 x minutes in length per sale. The Mechanical rate for Ringtones is $.24 per sale

Which statements about the Spawn of Satan (also known as the Controlled Composition Clause) are correct

- The Spawn of Satan is NOT in a publishing contract. It's in a Writer/Artist's contract with a label. It is applied to all songs that the artist has "control" over selecting for the record, including all songs written or co-written by the Artist - The Spawn of Satan only applies to physical product e.g. Vinyl records and/or CDs. It does not apply to iTunes downloads - The Writer/Artist's co-writers and their publishers may feel pressured to agree to the 3/4 Spawn of Satan rate if they want to have songs on the Writer/Artist's project - Commonly the Spawn of Satan calls for a reduced rate which is most often 3/4 (75%) of the Statutory Mechanical rate. For royalty calculation purposes that would be written out as $.06825. The label also places a "Cap" on the record at 10 songs. So to pay Mechanical royalties there is a pool of approx. 68 cents per album ($.06825 x 10 songs). Any overage comes out of the Writer/Artist's ARTIST royalties - The Spawn of Satan exists in Copyright Law and the publisher is legally bound to agree to it

The Compulsory Mechanical License was enacted to bust up a monopoly that the Aeolian Piano Rolls company had created by demanding Exclusive licenses from the publishers who did business with them. No bueno! Which of the following are true concerning the Compulsory Mechanical License (Compulsory License)?

- The rate used in a Compulsory license is automatically the Statutory Mechanical rate - The party who uses the Compulsory Mechanical license to record a song must remit royalty payments monthly instead of quarterly - To use the Compulsory License one must send NOI (Notice of Intent) - The Compulsory License exists to prevent monopolies. No one company can absolutely control and prevent who records a published song. This means that once a song is released, anyone can record it even if the publisher says "No" by using the Compulsory license

Which of the following are true about the MMA (Music Modernization Act)?

- We hope it will make licensing for online Interactive streaming easier for streaming platforms - We hope to see a significant upswing in Mechanical royalties - The MMA mandates the creation of a singular authoritative database of songs - We hope it will enable Spotify and other streaming sites to distribute the undistributed royalties they are holding in the "Black Box" efficiently and soon!

Select ONE answer.Which single statement below is false?

ALL streaming generates Mechanical royalties

All Sampling is exempt from Mechanical licensing requirements under the Fair Use Doctrine

False

Publishers make Mechanicals from illegal downloads

False

The Library of Congress will administer the new Blanket Mechanical License mandated by the MMA

False

To calculate the publishing royalties from the sale of 20,000 downloads of your song, the formula would be: 9.1 x 20,000

False

Which ONE of the following statements about Mechanicals is correct? Select that ONE answer

Music publishers used to make about 40% of their royalty income from Mechanicals. Now they do not.

Which of the following statements about the NMPA is true?

NMPA stands for the National Music Publishers Association, a powerful trade group for music publishers

Regarding the HFA which ONE of the following statements is TRUE

The HFA was set up by the NMPA to assist its publisher members in the Mechanical Licensing and Royalty collection process. The HFA is now owned by Sesac.

A legal Interactive Stream generates a Mechanical royalty and a Performance royalty

True

A record label has contacted you, a publisher for permission to use one of your songs on a charity project for musicians who suffered financial disaster during the Plague of 2020 (Covid19). They want to pay all publishers 50% of the Stat. rate. You want to help out but don't want to be taken advantage of by them paying any other publisher the full Stat. rate. Inserting an MFN clause in the Mechanical license you grant them should prevent that.

True

A valid formula for computing mechanical royalties is: Units sold of the product x Rate x Songs you own on the product = Gross amount to Publisher(s). Then the publisher splits that with the writer(s) pursuant to their contracts leaving the Net profit for the publisher

True

Forecasters of Music Publishing income predict that once the new Blanket Mechanical license kicks in on 1/1/21 royalties from Interactive streaming should be a bigger part of total publishing revenue going forward. Because of this, Mechanical royalties can be viewed as a growth area for publishers and songwriters

True

If you are sampling a portion of a recording you have to get permission from the © owner and the (p) owner

True

If you own 1 song that is legally downloaded 45,000 times you should gross $4,095 in mechanicals

True

If you, a publisher own 1 song that is legally downloaded 45,000 times you should net $2,047.50 in mechanicals after paying out the writers share in a standard 50/50 deal

True

Mechanicals are due to publishers 45 days after the end of the quarter

True

Record companies will often ask for a reduced rate for a song on a compilation

True

The Music Modernization Act mandates the creation of a new historic (in the U.S.) Blanket Mechanical License for Interactive streaming

True

The original Napster created a huge disruption for publishers because consumers could download songs without paying for them. Mechanical royalties took a nasty hit and have not yet fully recovered

True