What are mechanical royalties?
Mechanical royalties must be paid by a third-party for the recording, manufacture, and distribution of copyright-protected music. Yes, there are mechanical royalties for streaming services like Spotify.
Digital mechanical royalties include
- All mechanical royalties from Spotify, Apple Music, and other streaming sites. These are generated from every single stream.
- All international mechanical royalties from download stores like iTunes. These are generated from every single sale.
- All performance royalties from streaming services (like Spotify), radio, TV, live concert performances and much more.
- Global YouTube Sync Publishing royalties for any video on YouTube that contains your song.
The current statutory mechanical royalty rate for physical recordings (such as CDs) and permanent digital downloads is 9.1¢ for recordings of a song 5 minutes or less, and 1.75¢ per minute or fraction thereof for those over 5 minutes. These rates only apply to compulsory licenses as outlined in Section 115 of the 1976 U.S. Copyright Act.
Streaming platforms have a mechanical rate that varies in the range from roughly 4% to 6.75% of revenue.
You are also able to directly negotiate regarding the terms of mechanical licenses you issue – whether to your record label or other artists/labels seeking to cover your songs. CDB Pro Publishing Administration does not offer any advice with regards to these sorts of agreements. We will also not be collecting mechanicals from releases that an artist puts out through their own label.
What are performance royalties?
Performance royalties are paid by Performing Rights Organizations to songwriters and publishers for the public broadcast of music. These royalties come from blanket license fees paid to Performing Rights Organizations by businesses who broadcast music (e.g. radio / TV stations, live venues, restaurants).
There is no set rate for performance royalties – they vary quarter-by-quarter depending on variable factors, such as the total amount of license fees collected by the Performing Rights Organization.