How to Collect Mechanical Royalties: Artists' Guide

Kristian Gorenc Z

Mar 25, 2024

As a musician or songwriter, understanding the nuances of mechanical royalties is crucial for ensuring you're fully compensated for your creative work. This article aims to demystify the process of collecting mechanical royalties, offering a step-by-step guide to navigate this complex but rewarding aspect of the music industry.

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Understanding Mechanical Royalties

Before diving into the collection process, it's essential to grasp what mechanical royalties are. If you've ever written or contributed to a musical composition, you're potentially eligible to collect these payments. Mechanical royalties are generated every time a physical or digital copy of your music is made and distributed. This includes vinyl, CDs, cassette tapes, digital downloads, and streams on interactive platforms like Spotify and Apple Music.

Interestingly, the term 'mechanical' has its roots in the era of physical music formats, starting with piano rolls in the early twentieth century, then evolving to vinyl, cassette tapes, and CDs. But in today's digital age, mechanical royalties have expanded to encompass interactive streams and digital downloads.

The Source of Mechanical Royalties

Mechanical royalties are born from various sources. For physical copies such as vinyl, CDs, and cassette tapes, you're owed royalties irrespective of whether these copies are sold. As soon as a vinyl record is produced, a mechanical royalty is due to you. In the realm of digital copies, which include music distributed on on-demand streaming platforms, mechanical royalties are also generated.

However, it's vital to note that not all digital platforms owe mechanical royalties. Non-interactive streaming platforms, like Pandora or SiriusXM, where listeners cannot choose specific songs or albums, fall under a different type of royalty structure.

Royalty Rates and Their Calculation

In the United States, the mechanical royalty payment rates are set by the US Copyright Act and the Copyright Royalty Board, with reevaluations every five years. For physical media and downloads, the rate is 9.1 cents per copy, while streaming services pay on a per-stream basis, with rates averaging around $.0005 per stream. However, these rates can vary based on the streaming platform.

Collecting Your Mechanical Royalties

1. Understand Your Eligibility

First, determine if you are eligible for mechanical royalties. If you've contributed to a song's composition, you're likely entitled to these payments.

2. Register with Relevant Organizations

In the US, mechanical royalties from digital streams are collected by The Mechanical Licensing Collective (MLC). If you're not registered with the MLC or a publishing administrator, you could miss out on these earnings. Therefore, ensuring your music is properly registered is critical.

3. Work with a Publisher or Administrator

Often, a music publisher or administrative entity can facilitate the collection of mechanical royalties. They can track down earnings due to you, but be mindful that they might take a cut of the royalties.

4. Keep Track of Sales and Streams

Monitoring your music's sales and streams can help you estimate the mechanical royalties owed. Remember, these royalties are due whether or not the physical copies are sold, and for streams, regardless of the streaming platform.

5. Understanding the Splits

If your music involves multiple rights holders or songwriters, the mechanical royalties must be split accordingly. Ensure there's clarity and agreement on these splits to avoid disputes.

6. Stay Updated on Rates and Policies

Since mechanical royalty rates can change and policies vary across platforms, staying informed is crucial. Regularly check for updates in royalty rates and distribution policies.

Final Thoughts

Collecting mechanical royalties might seem daunting, but it's a vital part of ensuring you're compensated for your creative work. By understanding the basics, registering with the right organizations, and keeping track of your music's distribution, you can efficiently collect what you're owed.

At Viberate, we're committed to helping artists navigate the complex landscape of the music industry. While we do not directly collect mechanical royalties, our insights and analytics can guide you in understanding your music's reach and potential earnings. Remember, getting a royalty check is not just a one-off win; it's a recurring revenue stream that rewards your hard work and talent. So, take the time to understand and manage your mechanical royalties – your music career will thank you for it.