Compulsory Licensing of Musical Compositions for Phonorecords under the Copyright Act of 1976

Compulsory licensing is a system by which the copyright owners of most music are required to license their music to others for recording purposes. Under present and prior law, the royalty rate to be paid under compulsory licenses is specified by statute. Although the parties to a license are free to negotiate both the terms and royalty rates of the license, the terms are in fact dictated by the recording industry and the statutory royalty rate is never exceeded. The author analyzes the events that have created this situation and recommends that the statutory royalty rate be greatly increased so as to provide copyright owners with more leverage with which to negotiate for more favorable terms and royalties