What Are Mechanical Royalties?

Decoding this crucial source of songwriter income.

Mechanical royalties, payable to songwriters or song copyright owners, are generated whenever a song is reproduced in a digital or physical format. While its definition is rooted in the player piano rolls of the early 1900s, mechanical royalties apply to everything from physical formats like vinyl, cassette tapes, and CDs to mp3 song downloads and streams. For downloads and physical product, the label or individual releasing the recording music secure a mechanical license and pay these royalties.

Mechanical rates were first set by the Copyright Royalty Tribunal as part of the Copyright Act of 1976. The current statutory rate for digital or physical sales is 9.1 cents for recordings less than five minutes long and 1.75 cents per minute for songs longer than five minutes. 

Streaming mechanical rates are not statutory; they are based on a service’s overall revenue, and how much they are legally required to share with songwriters. And streaming services do not secure individual mechanical licenses, but rather work on the basis of blanket licenses with organizations representing rightsholders.

For more information on how blanket mechanical licenses work in the U.S., check out our complete breakdown of The Mechanical Licensing Collective (The MLC) — a leading Mechanical Rights Organization (MRO). Our blog also has a detailed post on the difference between mechanical and performance royalties here.  

 

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