Mechanical Royalties
Definition
Royalties paid for the reproduction of a musical composition — originally for “mechanical” reproduction on physical media (vinyl, CD), now also covering digital downloads and streaming. In the US, the statutory mechanical rate is set by the Copyright Royalty Board. Streaming mechanicals are calculated through a complex formula involving platform revenue.
Context
The biz-talk community highlights mechanical royalties as a significant but often uncollected income stream. Many songwriters register with a PRO for performance royalties but fail to register for mechanical royalty collection (through organizations like the Harry Fox Agency, Songtrust, or the Mechanical Licensing Collective). This means money is owed but never paid. Mechanical royalties are separate from performance royalties — both must be actively collected through their respective organizations.