Earlier today I got an email from a guy who just couldn't understand the reasoning behind this policy. Why don't we allow people to sing, rap, or play instruments on our music? It seems an unreasonable policy?
To try to explain, this policy is in place to avoid confusion, disputes and long negotiations over rights. If a singer was allowed to download our music, come up with his own melody on top of that, his own lyrics, and sing that melody on our music – maybe play a guitar solo too – then who, now, owns the rights to that song?
If that artist now wants to put that music on a CD album and have that sold as CD’s through his own website, and maybe on iTunes, who should get paid for that, and how much? Should we ask that artist to start paying us half of the income calculated on a pro-rata basis according to how many tracks we he’s got on that CD which was partly built on ours? Should we ask the artist to keep track of exactly how many copies of each track has been sold through iTunes, Rhapsody, Spotify, PayPlay, Napster, CDBaby and dozens of other online music stores, so that he can accurately calculate our shares of those particular tracks? And then pay those shares to us, quarterly, for all foreseeable future? Should we trust potentially hundreds or thousands of independent artists/songwriters (who are notoriously disorganized) to do this consciously, accurately, and persistently over many years?
I think you can see the world of problems and complexities that this would open up. It gets very complicated very quickly, and we do not wish to get into that kind of “market”. There is no way that we could ever follow-up hundreds, thousands, of disorganized "artist types" and make sure that we have contracts with them with shared ownership of musical recordings, payment of royalties and shares that they should be paying us, and so on.
Therefore, we allow our music to be used only "as it is". We do not allow our music to be used as a basis on which other artists can sing, play, etc.
If you only want to sing, play, rap, whatever on our music in the privacy of your own home, we don't have a problem with it. But the resulting recording that combines your talent with our music must not be distributed on the internet, on CD, or in any other way.