Why We Wrote This Guide

The Harry Fox Agency administers mechanical royalties to songwriters and music publishers. The Harry Fox Agency ensures that royalties generated from the composition of non-digital phonorecords are paid in the correct amount from certain songwriters and music publishers, among other voluntary digital licensing activities.Two additional collective management organizations in the United States are Music Reports and the Mechanical Licensing Collective (MLC). Music Reports, administers digital voluntary mechanical licenses for a variety of additional digital media platforms. The MLC provides mechanical licenses for qualified digital service providers “DSPs” as specified under 7 USC 115 ("covered activities"). If one is not registered with the Harry Fox Agency, they may be missing out on royalties from a variety of platforms.

Who This Guide Is For

Songwriters who want to know more about how their mechanical royalties are administered when someone else reproduces their lyrics and/or music.
Artists who want to record someone else’s song and learn how the Harry Fox Agency administers the required licenses to do so between the song’s publisher and them.
Music Publishers who want to understand how the Harry Fox Agency ensures that they receive the proper amount of royalties for the use of their copyrights on the underlying composition for mechanical uses.
Anyone who is interested.

Note: ”Music” in this case does not refer to the sound recording, which is a separate copyright.

Content

What is the Harry Fox Agency?
How The HFA Works
Becoming an HFA Affiliate
Breakdown of HFA Application
Can I Still Collect Mechanical Royalties Even if I’m Not Affiliated with HFA?
Delivery of Metadata to HFA
Song Claiming and Disputes
Other U.S. Mechanical Collection Organizations - Music Reports & The MLC

What is the Harry Fox Agency?

The Harry Fox Agency (HFA) is an administrator of digital voluntary licenses for various royalty types. In short, they issue digital voluntary licenses as well as mechanical licenses for reproductions of musical compositions embodied in sound recordings that are manufactured and distributed in the U.S. The licensor in this case would be any owner of the underlying composition (lyrics/music)—whether they are a music publisher, songwriter, or both. The licensee in this case would be any person or entity who wants to record, reproduce, and distribute in any way an original composition owned by the licensor. Traditionally, mechanical royalties are paid by record labels to the Harry Fox Agency which then pays the publishers. Following the Music Modernization Act, Harry Fox only administers licenses for non-digital phonorecord deliveries, and certain digital transmissions outside the section 7 USC 115 blanket license furnished by the Mechanical Licensing Collective. One’s royalties are paid to a songwriter directly if they are self-published, or from their publisher if they have signed a publishing deal. One’s royalties are paid to a songwriter directly if they are self-published, or from their publisher if they have signed a publishing deal.

Background/History

Back in the Brill Building days of the music business, before the National Music Publishers Association (NMPA) was established in 1917, Harry Fox worked for Music Publishers Protective Association in New York City. When someone wanted to reproduce a copyrighted work, Harry secured the mechanical licenses between them. Originally, these were mostly created to pay royalties to the writers of sheet music often performed in cafes, on pianos, and for vaudeville shows at the time.

The Harry Fox Agency, founded in 1927 by the NMPA, went on to become the biggest mechanical rights administrator in the United States. They now represent 48,000 music publishers. For decades, mechanical rights were extremely important because physical record sales provided a huge revenue stream. Digital downloads and streaming now predominate as the main sources of mechanical royalties in the current marketplace, and HFA has adapted to offer licensing opportunities specific to these trends.

In 2011, the National Music Publishers Association sued YouTube for unpaid royalties. The settlement from this lawsuit resulted in the creation of a “YouTube Licensing Offer.” This agreement allows publishers to collect synchronization fees based on user-generated videos uploaded to YouTube. The license grants YouTube the right to synchronize a publisher's musical works with certain videos posted by YouTube users. When that music is used in videos for which YouTube receives advertising revenue worldwide, YouTube will send royalties to HFA for distribution. YouTube offers publishers the opportunity to either license directly with them or be administered through the HFA to have mechanical royalties paid for YouTube in the United States. By late 2011, music publishers large and small were already working on direct deals with YouTube to collect these royalties.

A few years later, the HFA structured a deal with Spotify to administer all of the DSP (Digital Service Provider)’s mechanical licensing payouts. Throughout 2017, Spotify found itself involved in a number of lawsuits for unpaid mechanical royalties for millions of songs streamed on the service. Many point to improper licensing by the HFA as a direct cause of these infringements. However, the relationship between these lawsuits and HFA’s involvement with Spotify is unclear.

In 2015, the Harry Fox Agency was purchased by SESAC, a Nashville-based PRO (Performing Rights Organization). Other PROs include ASCAP, BMI, and more recently, GMR. ASCAP and BMI are public not-for-profit organizations; SESAC remains a private for-profit membership-based company. All PROs monitor and administer public performance licenses. SESAC’s purchase of the Harry Fox Agency may enhance its licensing capabilities and allow the company to offer singular licenses for works that aggregate both performance and mechanical royalties. Spotify and other DSPs exploit both the mechanical and performance rights, as discussed in detail within other guides.

HFA is headquartered in New York City, but the HFA may move some or all of its operations to Nashville in the future to connect geographically with SESAC’s headquarters.

How the HFA Works

Digital Voluntary Licenses

Many new digital services and apps also exploit synchronization and lyric rights in addition to mechanical rights. Music Reports Inc. (MRI) administerS licenses and royalty payments for many new digital services and apps in the United States. These licenses include the appropriate grant of rights, as well as the royalties to be paid as a result of such use.

Songfile

Songfile is the system HFA has in place for limited quantity mechanical licensing. It is an online tool which allows the public to search through millions of songs and purchase licenses if desired. Users pay a low per-song processing fee and royalties for licenses, which are set at the current U.S. statutory rate. Songfile can be used to license up to 2,500 copies of a song for physical sales or digital downloads, as well as ringtones.

It is important to note that if HFA does not represent the entire song, meaning 100% of both the music and lyrics, the party wishing to obtain the license will need to reach out to the music publisher directly to gain rights to the remaining portions of the composition. If HFA does represent 100% of the song, the entire licensing process can happen through Songfile.

HFA Song Code

The HFA Song Code is a unique 6-character identifier for a song in HFA’s database and is often used to associate a publishing asset to a master recording. It is vital to music publishers because it matches copyright use to its licenses so that royalties can be distributed accurately.

Money

Except in cases of licensing activities expressly offered to publishers on a reduced rate or commission-free basis, HFA’s commission rate is 11.5% of all payments collected for all categories of licensing services offered.

HFA requests money from a licensee (user of the copyright) and, once received, pays the licensor (a music publisher and/or songwriter) his/her due mechanical royalties. If one obtained the mechanical license though Songfile, one has already paid the mechanical royalties upon registration and no further payment is necessary. But for licenses for more than 2,500 units, royalties are due within 45 days after the close of each quarter.

A Case Study: Kanye West decides not to sample “Bound” by Ponderosa Twins Plus Ones for his upcoming song “Bound 2” from Yeezus and instead secures only a mechanical license for use of the melody/lyrics. HFA will facilitate the payment of mechanical royalties from Kanye West to the copyright holder, most likely the songwriter and/or publisher. Because “Bound 2” is less than 5 minutes long, the royalty rate is 9.1 cents per sale. Assuming Yeezus sold 750,000 physical copies or digital downloads, Kanye will owe $68,250 to the copyright holder. For administering this payment from one entity to the other, HFA will collect 11.5% of this, or $7,848.75.

Keep in mind this only accounts for the physical sales or digital downloads of Yeezus and does not represent the full mechanical royalty payment due. Streaming mechanical royalties would still need to calculated,and would subsequently be furnished by the Mechanical Licensing Collective.

Becoming an HFA Affiliate

Disclaimer: As of this writing, HFA portal access is not available to publishers without a preexisting account. However, HFA is accepting newcomers as affiliates. Below is an account of the HFA registration process for prospective HFA affiliates.

In order for HFA to represent a music publisher for mechanical licensing, that music publisher must become an HFA affiliate. To affiliate, one must have at least one commercially released song by a record label in the U.S. within the past year.Benefits of affiliation include:

  • New licensing opportunities with digital business models and other media companies, payment services such as income tracking, and access to a variety of online tools for song catalog updates and monthly royalty statements.

  • Ability to collect royalties on international uses of your music when you authorize the HFA to engage in worldwide mechanical royalty collection through our network of international society agreements

  • Songfile is a great resource for newer artists without substantial radio play or album sales, Songfile will contribute to increasing breadth in the industry

Breakdown of HFA Application

  1. Publisher Name: If you have a publisher or have hired a publishing administrator, stop here. Your publisher should be handling licensing with HFA . If you do not have a publisher, then enter your publishing entity name as used with ASCAP, BMI, or SESAC.
  2. HFA Account P#: Skip, unless you’ve received correspondence from HFA with an HFA Account P#.
  3. Administrator Title: Enter “Self” if you are representing yourself. Enter the title of your representative if you’re giving them authority to oversee your HFA Online Account (e.g “Manager”, “Attorney”).
  4. Administrator Name: Enter your full legal name if you are representing yourself or enter the full name of your authorized representative who will be overseeing your HFA Online Account. This is just who should be contacted about your catalog.
  5. Administrator Mailing Address: Enter the contact information of the individual identified in #4. Where should HFA mail things to?
  6. Administrator Settings: This is where much of the confusion arises. Here are some scenarios:
  • If you are applying as an individual self-published songwriter with no publishing entity, then select “Individual/Sole proprietor”, enter your tax ID (SSN or ITIN), and enter the name that should appear on tax documents (generally, your legal name).
  • If you are applying as an individual self-published songwriter who has hired a publishing administrator, then you should not complete this application in the first place. Contact your publishing administrator.
  • If you are applying as an individual self-published songwriter who has set up a business entity for the purpose of administering your own publishing with ASCAP, BMI, or SESAC and you have input this publishing entity in #1, then select the business entity structure that you have set up to form your company. For example, if your entity is a Limited Liability Company, then select “Limited Liability Company”. If it is a DBA, then select “Individual/Sole proprietor.” Enter the tax ID for the entity (this may be your personal SSN/ITIN if you are a sole proprietor or it may be your EIN if you’ve applied for one with the IRS for your LLC, Corporation, or Partnership). Enter the name on the tax return that matches the entity type that you’ve selected.

Composed by Tuneregistry

Can I Still Collect Mechanical Royalties Even if I’m Not Affiliated with HFA?

Mechanical royalties are paid by labels, artists, or other licensees to the Harry Fox Agency which then pays the publishers. A songwriter’s mechanical royalties are paid to them directly if they are self-published, or through their publisher if they have a publishing deal.Historically, one could only affiliate with HFA if they are a publisher that has songs released via a third-party label. As of this writing, only preexisting HFA users can access their portal. However, newcomers are still granted the opportunity to become an affiliate. Affiliating with HFA offers publishers licensing opportunities, but does not affect royalty payout from interactive streaming platforms (Spotify, Apple Music, etc.).

Delivery of Metadata to HFA

A few options exist for submitting metadata to HFA, depending on each individual publisher’s capabilities and/or preferences.

eSong is one option that allows one to register individual songs using an HFA Online Account. One may also submit multiple songs through eSong Bulk.

HFA has an Excel spreadsheet metadata template that can be used for submission via eSong Bulk. This template includes many of the same pieces of information that most collection organizations need, such as songwriter(s), publisher(s), percentage shares, ISWC code, territories, artist, record label, ISRCs, etc. It is important to remember that more information is better. The more details that HFA (as well as other companies) have, the more effective the licensing and royalty collection processes can be.

Common Works Registration (CWR) is another option for song registration if one is CWR-enabled. This is considered the industry standard for registering compositions in bulk. Because of the deals that HFA has in place with digital music services, it is imperative that HFA is continually updated by music publishers on all changes to a catalog.

Song Claiming and Disputes

Registering new songs would fall under the guidelines for submission mentioned above. However, the process of registering a claim to a song or catalog that was previously owned or administered by another company is a process handled internally by the Harry Fox Agency. If one has acquired a song or catalog from another publisher, one would reach out to Harry Fox’s client services department directly and advise of the change, while also providing a Letter of Direction. The Harry Fox Agency will then get a confirmation from the previous owner/ administrator. Once the combination of the LOD and confirmation occur, Harry Fox will make the change in its system.

Other U.S. Mechanical Collection Organizations - Music Reports & The MLC

Music Reports is another major collection agency in the United States that has deals in place to collect royalties and administer digital voluntary licenses. In the digital age, it is not in the songwriter’s or publisher’s control as to which company they can send their metadata to in order to handle these royalties. For example, one has the option to decide which performing rights organization to be a member of and receive performance royalties from. One does not “choose” Harry Fox Agency or Music Reports. HFA and MRI enter into separate deals for voluntary and non-blanket activities on digital music platforms. In order to receive royalties from these platforms, MRI and HFA both need proper metadata from the publisher, then the publisher must review and enter into their various respective licensing agreements. One cannot choose, for example, to have MRI collect on royalties generated on digital music platforms which have deals in place with HFA.
The MLC was founded as a part of the 2018 Music Modernization Act to streamline the processing of mechanical licenses for digital service providers (DSPs). In January 2021 the MLC became the hub for digital service providers like Spotify, Pandora, Amazon and others to license music from rights holders for use on their platform. The royalties collected from the DSPs will be paid out according to the metadata for each song listed in the MLC's database, placing the responsibility on rights holders to make sure the database is properly updated. Making sure your information is fully updated at the MLC is important to fully collect the royalties you are due from DSPs. Though the MLCs database is linked to the records at HFA, rights holders still need to keep all three US mechanical rights databases updated as unique licenses and royalties will be processed by each platform. Data sharing between HFA and the MLC makes simultaneous submission to each organization unnecessary, but reviewing accounts for accuracy with both organizations is an important task.



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Composed by
Luke Evans, Mamie Davis, Jacob Wunderlich, Rene Merideth, Jeff Cvetkovski, Will Donohue & Aaron Davis

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