Mechanical Royalties are paid whenever a song is reproduced. For example, when a song is pressed to Vinyl or CD, a Mechanical Royalty is owed for each copy pressed. Digital Mechanical Royalties are paid for each digital download or stream of a song.
Record Labels and Digital Streaming Platforms ( Apple Music, Spotify etc.) pay licence fees to Rights Management Agencies ( Harry Fox Agency, MCPS etc. ) in order to reproduce music in physical or digital form. These licence fees are distributed to songwriters and publishing rights holders in the form of Mechanical Royalties. Mechanical Royalties are often one of the most lucrative streams of income for songwriters and music publishers, because one single song can be reproduced an unlimited amount of times and each reproduction produces a Mechanical Royalty.
Which is why it is important as a songwriter to understand what Mechanical Royalties are and how to collect them.Mechanical Royalties are collected by publishing companies on behalf of songwriters. When you enter a publishing deal, the publisher works to maximise the royalties generated for your songs by seeking out opportunities to place the song on tv, film, compilations etc. They also actively track down anywhere your song has been used and ensure all Royalties owed are paid. Publishing companies take a percentage of the Royalties and usually a percentage of the publishing rights (ownership of the song) as part of the deal.
If you do not have a publishing deal, then you are self-published and the songwriter(s) own all of the rights to the song. However, collecting Mechanical Royalties is difficult for self-published songwriters because the collection societies only payout to bonafide publishing companies. For this reason it is important to use a service such as Songtrust that collect Mechanical Royalties on behalf of self-published and independent songwriters.