THIS POST IS NOT LEGAL ADVICE:
1. If your song w/uncleared sample is not profitable you will generally not be pursued by the copyright owner for the usage of the sample.
If you are a signed artist or are about to have the song released on a real record label there are a couple options:
1. Don't clear the sample because the artist that owns the copyright will initially ask for too much. Release the song - get sued and settle. Use the record sales from your album as leverage to bring down the percentage you have to pay. For example: 50 Cent releases a song with an uncleared sample. Copyright owner sues. 50 Cent can negotiate DOWN the percentage he has to pay to the copyright owner if:
A. The copyright owner is not really making money off their copyright.
B. The copyright owner would have a large windfall of money through any association with 50 Cent.
Inversely, the copyright owner has the artist by the balls because:
1. It costs a lot of money to change the printing on a CD.
2. The song is already "out there" - pulling it would hurt the artist.
It can go both ways. Usually the copyright owner capitulates, especially if they know they'd get a windfall of money. The artist that uses the sample wins because they can negotiate a lower rate.
In any case, if we are looking at the ARTIST that did not clear the sample, I have been in the same room where someone (an artist's manager said
"Shit, we should've let them sue us. Now they want too much and we can't clear the sample."
What was the situation?:
1. A potential great single for a major label.
2. Used an uncleared sample from a very well known 80's rock group.
3. Sample clearinghouse was called. Artist's rep wanted 70% of the song's publishing in order to clear the sample.
4. That was too much money to give up on a potential hit single. The manager called in musicians to re-record the sample with live musicians.
5. The idea was that the sample being re-recorded by pro-musicians would be an "interpolation" - the artist could then charge only 20-40% or less for the interpolation.
6. The recorded interpolation did not sound as good as the sample, and took away from the song.
7. The manager called/emailed telling the clearinghouse that the artist was going to do an interpolation. He wants to use the sample though. Can the copyright owner bring it down from 70%? Clearinghouse called the manager's bluff - basically told him to fuck himself.
8. Thus, it was decided to scrap the entire song. This was the best song on the rapper's album.
I said to dumbass manager after I heard the recorded interpolation: "The song is good- pay the 70 and you'll get publishing from the rest of the album. This song will be your loss leader. Your artist needs to "break in" with a single like this."
The manager - being an idiot, nixed the idea. I countered: "30 percent of something is a lot better than 60 percent of nothing, which is what the interpolation is. _____ needs this single, just give up the money for potential success in the long run."
The artist saw my reasoning agreed with me. The manager, probably because he was new and insecure - wanted to assert power, felt threatened by me talking against him, was greedy and X'ed out the idea.
The artist was dropped from the major label and the album was shelved. Reason? There wasn't a successful single on the album other than the song scrapped by the manager. This would've taken the cat into the top 40. Now, he's probably cursing at his manager.
The manager then said: "I shouldn't have called them. We should've let them sue us. Now they want too much." And he didn't release the single - he realized his error.
That's one story. The thing is, that artist's label could afford a lawsuit and the cost of negotiations. Most underground cats can't.
It's a fine line.
