By my reading of the compulsory copyright licensing rules, if I want to record a cover of a song and sell one copy of it, I would need to obtain a license, but if I send in a proper notice along with a payment of $0.10, the copyright holders would be required to grant me that license. Many publishers license their works through the Harry Fox Agency, whose web site claims that a license must be obtained to make and distribute covers of a work in any quantity.
On the other hand, that web site will not license less than 25 copies, and once service fees are added in would charge over $16 for that.
Although I can understand that the paperwork necessary to handle a license would cost a publisher a lot more than $0.10, and that a company might reasonably request that performers not submit licensing-intent notices until the payment would reach a certain amount, and otherwise simply keep track of the copies they produce and include royalties for those copies in any payment they make once that threshold is reached, I am aware of nothing in the law that would entitle HFA to simultaneously demand that people acquire licenses even when distributing less than 25 copies, but then insist that someone making ten copies pay an amount more than 20 times larger than the $0.91 royalty specified by that law.
Is there any legal basis for HFA's demands? If not, what would one need to do to legally obtain e.g. a license to produce ten copies of a work without having to pay HFA anything beyond what they would be legally entitled to receive? I understand that it's perfectly legal for web sites to charge a 'convenience fee' for submitting credit-card payments on line rather than by mailing a check or money order, but find reprehensible the idea that a company should demand $16 for something whose price would be legally set at under a dollar.