The right to make and distribute phonorecords of musical works — i.e., the mechanical rights — is subject to compulsory licensing under section 115 of the 1976 Copyright Act. But in practice, because of the administrative burdens imposed by the license — including service of a notice on the copyright owner and monthly reporting of royalties on a song‐by‐song basis — mechanical licensing is often handled via third‐party mechanical rights administrators.
The oldest and largest such organization is the Harry Fox Agency, Inc. (HFA), which was established by the NMPA in 1927 and today represents over 48,000 music publishers in licensing and collection activities. Mechanical licenses issued by HFA incorporate the terms of section 115, but with certain variations from the statutory provisions. For example, HFA licenses allow licensees to account for royalties on a quarterly basis, as opposed to the monthly reporting required under section 115.
Another entity that assists with mechanical licensing is Music Reports, Inc. (MRI), which prepares and serves statutory notices on behalf of its clients and administers monthly royalty payments in keeping with the requirements of section 115.
- ↑ Al Kohn & Bob Kohn, Kohn on Music Licensing 803‐06 (4th ed. 2010).