Mechanical Royalties
Royalties paid to songwriters and publishers when a musical composition is reproduced or distributed.
What it means
Mechanical royalties are payments made to the owners of a musical composition whenever that composition is reproduced. The term "mechanical" dates back to the era of player pianos and music boxes, when compositions were literally reproduced mechanically. Today, mechanical royalties are generated every time a song is pressed onto a CD, downloaded digitally, or streamed on platforms like Spotify, Apple Music, or YouTube Music. In the streaming era, mechanical royalties have become one of the primary revenue streams for songwriters and publishers. Unlike performance royalties (which are paid when music is played publicly), mechanical royalties are specifically tied to the act of reproduction — each stream counts as a mechanical reproduction of the underlying composition. For ambient and meditation music creators, mechanical royalties represent a steady income stream because listeners tend to play these genres on repeat for extended sessions, generating multiple streams per listening session. The rates for streaming mechanicals are set through complex industry agreements and vary by platform, territory, and whether the listener is on a free or paid tier.
Technical details
In the United States, statutory mechanical royalty rates are set by the Copyright Royalty Board (CRB). As of 2023, the rate for physical and permanent digital downloads is 12 cents per unit for songs over 5 minutes, or 9.1 cents for songs 5 minutes or under. For interactive streaming, mechanical royalties are calculated using a complex formula established in the Phonorecords IV proceedings, involving a percentage of revenue, per-subscriber minimums, and a total content cost pool. The Harry Fox Agency (HFA) and the Mechanical Licensing Collective (MLC) are the primary organizations that administer mechanical licenses and royalties in the US. Internationally, mechanical rates vary significantly — in Europe, BIEM/CISAC agreements typically set rates as a percentage of the published price to dealer (PPD).
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