Music Publishing Royalties Explained: What is a Mechanical Royalty?

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What is a Mechanical Royalty? How does a songwriter earn money? —— [Insert your own punchline here.]

But the real answer is… music publishing!

There’re a number of different kinds of publishing royalties you can earn from the usage of your original music.

One of the big sources of publishing revenue you’ll earn as a songwriter is performance royalties. But an even bigger revenue stream (at least for the music publishing industry at large) is mechanical royalties, which we’ll talk about in this article.

Mechanical royalties and independent songwriters

Wikipedia says:

The term “mechanical” and “mechanical license” has its origins in the “piano rolls” on which music was recorded in the early part of the 20th Century. Although its concept is now primarily oriented to royalty income from sale of compact discs (CDs), its scope is wider and covers any copyrighted audio composition that is rendered mechanically; that is, without human performers.

In a nutshell: every time a song you’ve written is manufactured to be sold in a CD, downloaded on a digital music retail site, or streamed through services like Spotify and Rdio, you are owed a mechanical royalty.

Now for the longer explanation of mechanical royalties…

As a songwriter/publisher, you are owed a royalty every time your composition is reproduced (on vinyl, tape, CD, MP3, etc). In the United States, this royalty is generally equal to 9.1 cents per reproduced “copy” of that song, regardless of whether those albums or singles are sold. (The mechanical royalty rate for on-demand streams through services like Spotify and Rdio is far lower; and yes — those services owe you both a mechanical royalty AND a performance royalty for your music’s usage). But let’s get back to mechanical royalties for CD sales and downloads for a second…

If someone covers one of your songs and they manufacture 1000 CDs — they owe you $91, regardless of whether those CDs ever get purchased by customers. If they sell 100 MP3s of your song, they owe you $9.10.

You are also owed a mechanical royalty for the sales of your music on YOUR OWN albums. But here’s where things get a little virtual; if you’re acting as your own label and putting out music that you’ve written, you’ll effectively be paying that royalty to yourself from album proceeds.

At least that’s how it works in the US, where download retailers like iTunes and Amazon pass on that mechanical royalty to you as part of the net payment for the sale of the MP3. But in many countries outside the US, mechanical royalties are set aside BY the retailer, to be paid to collection societies who then distribute those royalties to publishers and writers.

BUT performing rights organizations like ASCAP and BMI do NOT collect mechanical royalties. Their job is to collect performance royalties, NOT mechanicals. So…

How do you collect “foreign mechanicals” generated outside the US?

In order to collect international mechanical royalties (as well as mechanicals for both global and domestic streams), you’d need to register your music with many royalty collection societies around the world.

As our friend Justin Kalifowitz of SongTrust is fond of saying, you CAN do it yourself if you really want to — but you’ll probably have to stop making music for a while. Affiliating yourself and registering your songs directly with all the international collection societies would not only take hundreds of hours of paperwork and filling out online forms, but you’d need to be proficient in dozens of languages — or hire a translator. And who wants to do that when you’ve got gigs to play?

That’s where CD Baby Pro comes in. We do all that work for you — registering songs directly with societies around the world — and then we’ll make sure you get paid ALL the publishing royalties you’re owed.

 Stop leaving money on the table; sign up for CD Baby Pro today!

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  • Tim Wenzel

    Given that CD Baby’s normal distribution covers iTunes Europe, are there many mechanicals left? Besides the torrent sites? 😉 Streaming music pays practically nothing anyway, so that can be safely ignored.

  • In Europe, most music retailers hold the mechanicals (unlike in the US where they’re paid as part of the normal sales revenue) — which then need to be collected on behalf of the writers/publishers. So yes, depending of course on sales and activity, there can be a large amount of uncollected mechanicals from international download sales. (Some CD Baby artists have collected thousands in foreign mechanicals). And as for streaming mechanicals, they’re obviously not huge per stream, but they add up quick.

    @ChrisRobley

  • boogazm

    Hi Christopher. Would you know what, exactly, are the streaming rates for interactive services like Spotify, Rdio and YouTube?

  • They differ all the time, based on the kind of listener (free ad-supported tier vs. paying subscriber, for instance, in the case of Facebook), the kind of ad served up, etc. The best way to get a feel for it is to look at your accounting statement from CD Baby or other distributor across several months.

    @ChrisRobley

    • boogazm

      Thanks Chris

  • HRFLIKK

    CD Baby Pro is just for americans an canadiand, thet suck

    • It’s also available in the UK. We’re working to expand it beyond those three countries though.

      @ChrisRobley

      • HRFLIKK

        ok, CD Baby Pro is just for Americans,Canadians AND Uk, that just sucks D….!

      • HRFLIKK

        expand?? yeye, when im old and grey?. When Youtube is allready making it happen, so why dont cdbaby able to to the same. i get paid for my youtube streams, and i live in skandinavia, NOT us, NOT can, NOT uk. make it happen! or i tink other companies wild look at this as an opportunity to make money and snatch the market away from you! i would! make a company just based on streaming, not sales. here in scandinavia only maby 5% buy music, the rest of 95% JUST streams, mostly on youtube. so sales of music isent so intresting!! Streaming rules!

  • Stephanie Krasnov

    Hi Chris—is there a statutory rate set for mechanical royalties through interactive services? I see that the Copyright Royalty Board is currently reconsidering rates for non-interactive services. If there is a rate for interactive services, do you know if/when that will be re-negotiated?

  • Yes, there is a statutory rate for publishing mechanicals for interactive services in the US.

    Couple of points on this:

    • the royalty rate is not set as a per-stream rate but rather as a percentage of income, or a percentage of the sound recording royalty deal for these services. Here is a quick distillation that Billboard did when the rates were set back on 2012 that is useful: https://www.billboard.com/biz/articles/news/publishing/1098005/copyright-royalty-board-to-set-mechanical-royalty-rates-for

    • some services choose to use this rate, others choose to negotiate rates directly with the publishers.

    • the non-interactive review that is going on now is not for mechanical royalties, but sound recordings (paid through Soundexchange in the US). there is no mechanical royalty for non-interactive services (just performance royalties for publishing).

    @ChrisRobley

  • Kaos

    Great article Chris. I had two questions.

    1.If you get music placed on a TV show or commercial, is that a performance royalty or mechanical royalty?

    2.Also, if a placement company gives you the option to opt in or opt out of the “mechanical uses” of your music, wouldn’t it make since to opt in so you could receive your royalties?

    Thanks in advanced!

  • A sync placement on TV will earn you performance royalties via your PRO (ASCAP, BMI, etc.) and paid to them by the network/s. involved. Often you’ll also get an upfront sync licensing fee for both the usage of the sound recording AND the usage of the composition.

    2. Regarding the placement company, are you talking about mechanical sync uses such as in a video game? That would normally require a mechanical fee per copy (though most, these days, get negotiated at a flat rate for unlimited). That being said, none of that would affect CD Baby Pro because we don’t handle sync rights whatsoever.

    @ChrisRobley

  • dinocelotti

    Wondering how Mechanicals work when it comes to things like download cards/codes/etc (Whether given away, sold, or included with the vinyl)? CDBaby offers download card services – who pays the mechanicals and on the number produced or the number redeemed?

  • Mechanical royalties would be based on “reproductions” of the composition, so in the digital realm that means it’d be based on downloads redeemed, NOT the number of cards you print. Since we’re in the US, the retailer (CD Baby in this case) would pay YOU (the owner of the sound recording), and then it’s your responsibility to pay the publisher/writer that mechanical royalty.

    @ChrisRobley

    • dinocelotti

      Thanks Chris,
      That’s helpful!

    • dinocelotti

      Hi again Chris. Hope you don’t me asking another clarifying question. If I was getting download cards made for inclusion with vinyls that are being distributed globally. Who is responsible for mechanicals. And is the rate based on where they’re downloaded from (the host / CDBaby) or downloaded to (location of the purchaser of the vinyl)? (Also not sure how the fact that they are “free” downloads when included with the vinyl purchase impacts this answer) thanks again!

  • Keep in mind, I’m not a lawyer, so this isn’t expert legal advice, but my understanding is:

    The cost/revenue isn’t really a factor. The publisher is owed their 9.1 cents per reproduction (which includes digital reproductions in the form of a download). Also, it’s the location of the retailer that’s important. So, if it was a download from CD Baby, you would be responsible for paying those mechanicals out of what you earn from the sale of the download card (or wrapepd up in the sale of the vinyl). That means you might actually have to pay double the mechanicals on those vinyl sales that come bundled with download cards that are eventually redeemed. Make sense?

    @ChrisRobley

  • Keep in mind, I’m not a lawyer, so this isn’t expert legal advice, but my understanding is:

    The cost/revenue isn’t really a factor. The publisher is owed their 9.1 cents per reproduction (which includes digital reproductions in the form of a download). Also, it’s the location of the retailer that’s important. So, if it was a download from CD Baby, you would be responsible for paying those mechanicals out of what you earn from the sale of the download card (or wrapepd up in the sale of the vinyl). That means you might actually have to pay double the mechanicals on those vinyl sales that come bundled with download cards that are eventually redeemed. Make sense?

    @ChrisRobley

  • Lisa

    I want to add a short clip of me as a child singing raindrops keep falling on my head to my cd. It would not be sold separately. It would only be included on the purchase of the full cd. It’s a terrible recording made on a cassette tape.

    Would I Have copyright issues?

  • Would it be a standalone song? Or is that audio used in the context of one of your original songs? For the former, you’d need to get the mechanical license to distribute the cover song. For the latter, you’d need to get the permission of the songwriter/publisher in order to use their copyrighted material in a new derivative work.

    @ChrisRobley

  • Would it be a standalone song? Or is that audio used in the context of one of your original songs? For the former, you’d need to get the mechanical license to distribute the cover song. For the latter, you’d need to get the permission of the songwriter/publisher in order to use their copyrighted material in a new derivative work.

    @ChrisRobley

  • Freyja

    I recently reinterpreted and recorded a song written by a friend of mine. I’m curious to know if I should use CD baby standard, or if there is any reason to use pro with this song.

  • Freyja

    I recently reinterpreted and recorded a song written by a friend of mine. I’m curious to know if I should use CD baby standard, or if there is any reason to use pro with this song.

  • GIGOLO

    I wrote a song with another composer 50/50 (i did NOT negociated my share as a publisher)

    he than had Universal administrate his publishing company.

    #1 do I still get as a writer any type of MECHANICAL royalties even thou I dont have/own ANY part of the publishing?

    #2 on another note, I band will be releasing one of my songs (composed by me ONLY) so i have a 100% of the publishing royalties aswell, i have my publshing company thrue ascap, what percentage can i offer to a companie to administrate MY ascap publishing company? what percentage to administrate a song are this HUGE companies asking nowadays?

  • Renato Sebastiani

    Hi Chris
    this article is very helpful’
    I have a question: the label I’m signing with demands all the publishings in order to trade them with radios and so on.
    If I own only the author/composer rights to the songs, do I still get paid for downloads, CD’s or any mechanical use?

  • That all depends on what’s in your contract. Your performance royalties for radio will automatically be split between the publisher (which would be your label if you sign the deal), and the writer (you). However, all the other publishing rights are negotiable, so you’d want to make sure you’re not granting your label EVERYTHING. Seems like you would still want to collect publishing revenue on downloads, CDs, and such (which you WOULD be owed if you retained your publishing rights).

    @ChrisRobley

  • The splits differ depending on the publishing deal you set up. However, have you looked into CD Baby Pro for publishing administration services?

    As for the mechanicals,… did you sign away your publishing rights to your co-written song? Seems to me that you’d still be the publisher for your 50% of the song, even if his half is controlled by Universal.

    @ChrisRobley

  • Coldbeats

    Hi, thanks for the insights. I still have some questions regarding royalty collecting. You often speak of “it makes it easier because services like songtrust/CD Baby Pro collect royalties for you”. This is what I don’t understand. I thought copyright collecting societies do that for you and have reciprocal relationships with societies in other major music markets. I live in Austria and I am registered with AKM/AustroMechana. They collect mechanical and performance royalties from all over the world for me (I am self-published and produce). So why should I register with songtrust/CD Baby Pro? Why is that easier? I have to register my songs with my collecting society anyway, so I don’t see the benefit. Thanks a lot for clarification.

  • Lashawn

    Hi, I’m curious on how I get paid for publishing? If I’m not registered with a company? I’m independent I just write and engineer songs for local artists.

  • Not directly, no. That’s part of the process we handle for you when you use CD Baby Pro.

    @ChrisRobley

  • All your publishing royalties would/should be split according to your ownership share in the song. So you’d receive 30% of the mechanicals, 30% of the performance royalties, 30% of sync licensing, etc.

    @ChrisRobley