Mechanical royalties are generated whenever a song is sold or streamed. These royalties must be paid by a third-party (normally a record label) for the recording, manufacture and distribution of copyright protected music.
 
 The current statutory mechanical royalty rate for physical recordings (such as CDs) and permanent digital downloads is 9.1¢ for recordings of a song 5 minutes or less, and 1.75¢ per minute or fraction thereof for those over 5 minutes. The total mechanicals paid will then be these rates multiplied by the number of recordings made.
 
 Streaming rates are not statutory, so each streaming service pays out a bit differently. Spotify, for example, explains how they calculate royalty payments to copyright holders here.

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