Who Pays Mechanical Royalties?

Question: Who Pays Mechanical Royalties?

Answer:

Mechanical royalties are royalties that are paid to a songwriter every time a song they have written is copied, as opposed to performing rights royalties which are paid when a song is performed (or when a recorded performance of the song is played). Generally speaking, the person responsible for paying the mechanical royalties is the person who makes the copy of the song, which means that record labels often foot the bill for the mechanicals.

When a record label presses an album, then they owe a mechanical royalty to the songwriter.

The way these royalties are collected can differ a lot depending on location (different countries, different rules) and personal deals between the artist and whoever makes the copy. A common scenario is that a record label will make a payment to the mechanical royalty collection group in their country for each copy of an album they press, and then the collection group distributes the royalties accordingly to songwriters or publishers - whoever owns the copyright. In some instances, a label can pay royalties on the albums they sell instead of the total amount they press, and they can usually press a pre-set number of copies royalty free to use as promotional copies. Usually, this relationship between mechanical royalty collection groups and labels is guided by a license issued to the label by the collection group.

The constraints of this license usually supersedes any side agreement made between labels and artists about the management of mechanical royalties. In other words, if you're a small label and an artist agrees to waive the mechanical royalties for their album so you have money in the coffers to promote the album, this deal is un-enforceable.

Mechanical royalties can be collected from labels even over the artist's objection.

Mechanical royalty collection groups are tied to the country in which they operate, and they collect royalties only for artists in those territories. In the USA, this group is Harry Fox. In the UK, it is the MCPS. When you register with a collection group in your territory - something you can do on your own as a songwriter - the group will then collect money on your behalf and distribute it to, less a fee for their services. The rate of mechanical royalties also varies from place to place. In the US, the current rate is 9.1 cents or 1.75 cents per minute - whichever is greater. These rates are periodically reviewed and can be adjusted as deemed necessary. 

For songwriters, understanding mechanical royalties and publishing is an essential part of protecting your rights. You can delve deeper into this complex topic with these resources:

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