Mechanical royalty

A mechanical royalty pays for the reproduction of a song, as distinct from its public performance. Every time a composition is pressed to a disc, sold as a download, or streamed on demand, a copy is made, and the writers and publishers of that composition are owed for it. The name is a holdover from mechanical piano rolls; the right long outlived the format.

In the United States the reproduction right is one of the exclusive rights in section 106 of the Copyright Act, and section 115 turns it into a compulsory licence: once a song has been distributed to the public with the owner's permission, anyone else may record and release their own version without asking, provided they licence it and pay the statutory rate. The rate is set by the Copyright Royalty Board rather than negotiated. For physical copies and permanent downloads it sat at 9.1 cents per song of five minutes or less from 2006 through 2022, rose to 12.4 cents for 2023, and is adjusted annually for inflation from there — so check the current year's figure rather than quoting an old one.

Streaming mechanicals work differently. They are calculated as a share of the service's revenue against alternative floors rather than as a per-copy penny rate, and in the US they are licensed in bulk through a statutory blanket licence created by the Music Modernization Act of 2018, with a designated collective matching uses to songs and paying the owners. Outside the US, mechanical collection is usually handled by a national society or by the publisher directly.

Two things routinely reduce what actually arrives. A controlled composition clause in a recording agreement can cut the rate paid on songs the artist wrote, often to a fraction of statutory and capped per album. And unmatched income — money collected for songs nobody has registered — sits undistributed rather than reaching the writer.