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As promised we are tackling mechanical royalties this week. Let’s go -
By definition mechanical royalties are the royalties paid to a songwriter when a hard copy or digital copy of their song is manufactured and distributed. The mechanical license is basically a license to sell (not perform, like the performance license). Primarily this applies to record companies or third party entities that press CD’s, or vinyl, download stores like iTunes, streaming platforms like Spotify or Pandora, and YouTube, that’s right YouTube. Based on the interactive stream of your song, this money goes to the songwriter. Now just so you know, the PRO’s (Performing Rights Organizations) do NOT pay mechanical royalties; only performance royalties ya dig? There are several companies that collect these royalties and send them to the songwriters; Harry Fox Agency represents all of the major publishers in the US, therefore takes care of you signed to label folks. However, companies like Easy Song Licensing issue mechanicals for covers and YouTube performances. Additionally, distributors like CDBaby, Distrokid, Tunecore and Songtradr are options for digital mechanical royalties. Again, the mechanical royalty goes to the songwriter and that includes all the songwriters who share in the copyright.
As always the question is how much do I get paid? Currently in the US, the statutory rate for mechanical royalties on physical product and digital downloads is 9.1 cents for songs that are 5 minutes or less, and 1.75 cents per minute over that. Now for streaming, long sigh, it’s a different story and each platform has a different pay rate. For example as of last year it will take you 229 streams on Spotify to make one dollar; crazy huh, y’all better keep gigging and selling CD’s at the club, church or the family reunion. Here’s a breakdown from the visual capitalist. An easy to understand resource is a book by Eric Willis called Handle Your Business: Music Publisher.
One last thing, even though you have a DIY distributor remember they do not market your product, so you’ll need someone like me to help with that.
Ok that’s it for mechanicals, next week, let’s talk about synchronisation licence.
This week's Independent Business of the Week is Jazz Becuzz Art Center, Click on the name, scroll down the page to hear, buy and support.
For more information or to hire Unda The Hat as your brand or label consultant send a message on undathehat.com. See you next week.