At first, music copyright holders derived most of their income from print rights. The 19th century saw a huge market for sheet music ten thousand songs were published during the five years of the Civil War alone and by the end of the century, cheaper production and transportation made it even greater. However, there was nothing in the copyright law about recorded music, and new inventions like piano rolls and phonographs were starting to erode the publishers’ income you could buy the record instead of the sheet music in order to play it yourself.
As usual, a court case came first, with a music publisher [White-Smith Music Publishing Co.] suing the Apollo Company, which manufactured player pianos and piano rolls. In 1908, the court decided for Apollo, but the revised copyright law of 1909 recognized the need for some regulation in this new area, and prohibited unauthorized "mechanical" reproduction of musical compositions, which included phonograph recordings and piano rolls.
In order to prevent monopolies on the part of single manufacturers, however, Congress also created a compulsory license. Once the copyright owner had authorized one company to make a recording of a song, any other company could make its own recording of the song, on payment to the copyright owner of two cents per record.
The provision remains, though the amount has changed over the years. Most mechanical licenses are issued on behalf of publishers through the Harry Fox Agency, which was founded in 1927 and is part of the National Music Publishers Association. The agency also collects and distributes royalties. In 1972, a copyright in sound recordings, one that protects the performance rather than the work, was added.
Intellectual Property: Whose Song is it Anyway?
by Heidi Waleson