Compulsory Licenses in the US Music Industry
These “licenses” give certain types of users (eg. cable systems, jukebox operators, and public broadcasters) the right to use copyrighted musical works without the permission of the copyright owner, provided they follow certain procedures and make payments of royalties. Copyright owners and users are still permitted to negotiate their own agreements if they so choose, and such agreements supersede the statutory rates. Compulsory licenses include the retransmission by cable systems of distant non-network programming, the right to make recordings of copyrighted non-dramatic musical works once the first authorized record is made and distributed in the USA and the right of public broadcasters to broadcast copyrighted works.
If the parties cannot agree, the Copyright Royalty Judges decide the fee for the compulsory license.
A 10-year agreement among PROs and Amusement and Music Operators Associations(AMOA) provided for a 1990 rate of $275 for the first jukebox plus lesser amounts for additional boxes
The 2018 license fee is $495 for the first jukebox and $84 for each additional box for AMOA members with non-AMOA members paying $114 for each additional box
The Copyright Act requires that, prior to the distribution of records, a “Notice of intention to obtain compulsory license” be given to the copyright owner containing, among other things, the work being recorded, the name of the new recording artist, the names of the original writers of the work, the name and address of the person or company taking the license, and the date when the phonorecords are set to be distributed. The compulsory license applies only if the primary purpose in making the phonorecords is to distribute them to the public for private use and includes the right to make an arrangement of the work as long as it does not change the basic melody or fundamental character of the work
If the names and addresses of the copyright owner are not on file in the Copyright Office records, the notice must be filed with the Copyright Office, rather than directly to the copyright owner. The Act requires monthly as well as annual summary accountings to the copyright owner as well as timely payment of statutory fees.
- the rates for 2018-2022 are the greater of 9.1 cent / composition or 1.75 c /minute of duration
In reality, most mechanical licenses that are issued in the US are not compulsory licenses but variations of the compulsory license, with terms that are somewhat more stringent than those dictated by the Copyright Law.