Mechanical Rights Royalties are one of many revenue streams available to artists. If you write or contribute to a musical composition – the original lyrics, melodies, or other components of a song – you may be eligible to collect mechanical royalty payments.
Unlike performance royalties owed when your music is publicly performed, mechanical royalties are owed whenever a physical or digital copy of your music is made and distributed. Physical copies include vinyl, CDs, cassette tapes, and you are owed royalties whether or not copies are ever sold. As soon as a vinyl record is produced, a mechanical royalty is born. Digital copies – also known as digital distributions or interactive streams – refer to music distributed on an on-demand streaming platform.
While public performance royalties are tied to the exclusive right to perform the musical work publically, mechanical royalties are designed as compensation to songwriters for the reproduction of their compositions.
Sometimes, those two types of royalties can go hand in hand — that is the case of music streaming, for example. Whenever a Spotify user chooses a song to stream, they trigger both types of royalties. Firstly, since the listener doesn’t actually own the track, the stream qualifies as a public performance.
Then, since to play the track, the streaming service has to reproduce the underlying composition, the mechanical royalties are due. The listener’s choice is a significant distinction when it comes to mechanical royalties.
What are Mechanical Rights Royalties?
Mechanical royalties are royalties that are generated each time a musical composition is reproduced, whether physically or digitally via on-demand streaming or download-to-own services. A nice way to wrap your head around mechanics is to trace them back to their origins.
Back in the day, whenever a label wanted to put out some music for sale, it had to mechanically reproduce the composition by printing it on a blank vinyl disc. Here is where the royalty got its name — whenever the label wanted to print new physical mediums, it had to compensate the songwriter for the use of the composition.
Then, as the music industry entered the 21st century, music sales shifted to digital platforms — first, iTunes, and then streaming services spearheaded by Spotify. However, mechanical royalties didn’t go anywhere — though the processes of their calculation and distribution have become much more complicated.
How are Mechanical Royalties paid?
Major music platforms pay mechanical royalties for streams, sales, and downloads to mechanical right collection societies. Most countries have their own mechanical right society and any mechanical royalties generated in that region are paid to the local society.
For example, in the US mechanical royalties are collected by Mechanical Licensing Collective (MLC) and Harry Fox Agency (HFA). While in the UK they’re processed by the Mechanical-Copyright Protection Society (MCPS).
In Nigeria, Musical Copyrights Society of Nigeria (MCSN) collects and distributes mechanical royalties to Members when their works have been copied or reproduced.
Here’s a list of some other mechanical rights societies around the world – some of which are in partnership with Performing Rights organizations, or are also Performing Rights Organisations as well;
- Australia – AMCOS (in partnership with APRA)
- Austria – AUSTRO-MECHANA
- Belgium – SABAM
- Brazil – UBC
- Canada – CMRRA
- France – SDRM (in partnership with SACEM)
- Germany – GEMA
- Mexico – SACM
- Netherlands – STEMRA
- Nigeria – MCSN
- Italy – SIAE
- Japan – JASRAC
- Portugal – SPA
- Scandinavia – NCB
- South Africa – CAPASSO
- Spain – SGAE
- Switzerland – SUISA
- UK – MCPS
- USA – MLC and HFA
Who gets paid Mechanical Royalties?
So, as you probably know already, there are two sets of copyrights behind every single song: the musical composition (harmony, melody, lyrics, and so forth), which belongs to songwriters, and the master recording, which is a particular audio expression of that underlying composition.
The important thing is that when it comes to mechanical royalties, it’s the composition owners (i.e., songwriters and their publishers) that get paid. In fact, mechanical royalties will often flow from the owners of master copyright (i.e., record label) to songwriters. That is the case whenever the label wants to produce physical copies of the song — and even whenever the music is sold on download-to-own platforms like iTunes.
On the songwriter’s side, the exact profit split for mechanical royalties will depend on the deal that the publishing deal is in place. Some deals give the songwriter as much as 90% of the profits — but the writer is guaranteed a minimum of 50% of the mechanical royalties (which is known as a writer’s share). Additionally, if the writer is self-published, meaning they serve as their own publisher, they can receive up to 100% of the mechanical royalties.
Who collects and distributes mechanical royalties?
In the US, mechanical royalties are collected and distributed by the Harry Fox Agency and the Mechanical Licensing Collective (The MLC). If you anticipate collecting royalties internationally, you need to register with the appropriate collection society in each country. In territories outside the US, mechanical royalties can be collected by either the Performing Rights Organization (“PRO”) or its partner Collective Management Organization (“CMO”).
Musical Copyright Society of Nigeria (MCSN) is an approved Collective Management Organization (CMO). We represent and license mechanical rights in Nigeria on behalf of our Members (songwriters, composers, lyricists, music publishers, and publishing administrators) and collect royalties for the reproduction of their works. This includes works that are:
- commercially released by a record company on a CD, DVD, or LP
- recorded and used by a radio or TV program
- recorded and used for an audiovisual or multimedia production
- used online (streaming or downloading).
Do streaming services pay mechanical royalties?
The term ‘mechanical’ dates back to when music was sold primarily on physical music formats; piano rolls in the early twentieth century, then vinyl, cassette tapes, and CDs. But mechanical royalties also now apply to interactive streams and digital downloads. That means iTunes and other digital services such as Spotify, Apple Music, Tidal, and Amazon, where listeners can choose the music they want to listen to.
However, not all digital platforms owe mechanical royalties. Non-interactive streaming platforms, where you can select a style of music but not a specific artist, song, or album to play, owe royalties under a blanket music license. Non-interactive streaming services include Pandora, SiriusXM, and Last.FM.
What is the MCSN?
In Nigeria, mechanical royalties are collected and distributed by the Musical Copyright Society Nigeria (MCSN). If you’re a composer or songwriter, signing up with the MCSN can help you to make sure you receive any mechanical royalties owing to you.
If you’re not already receiving mechanical royalties, then you’re missing out! Every single stream or download generates these additional payments, so make sure you’re not leaving the money you deserve on the table.