Mechanical Royalties Explained: The Hidden Income Stream for Songwriters

As a songwriter, you may be familiar with performance royalties, but there's another crucial income stream you might be overlooking: mechanical royalties. These royalties are generated whenever your musical work is reproduced or distributed.

What Are Mechanical Royalties?

Mechanical royalties are payments made to the songwriter and publisher for the right to reproduce and distribute a copyrighted musical composition. This is different from performance royalties, which are paid when a song is publicly performed. Think of it this way: performance royalties are for the "playing" of a song, while mechanical royalties are for the "making copies" of a song.

When Are They Generated?

Mechanical royalties are created in several scenarios, both physical and digital:

• Physical Sales: When a song is reproduced on physical formats like CDs or vinyl records.

• Digital Downloads: When a user buys a song from a digital store like iTunes.

• Interactive Streaming: When a user actively chooses a specific song to listen to on a service like Spotify or Apple Music. This is different from non-interactive streaming (like on Pandora), which generates performance royalties.

In the United States, these royalties are collected and paid out by organizations like the Harry Fox Agency and, more recently, the MLC (Mechanical Licensing Collective), which was created under the Music Modernization Act to handle digital mechanical royalties.

Are you missing out on mechanical royalties? It's time to find out!