A Guest Post by Symphonic Distribution
Mechanical royalties are an absolutely vital source of income for the independent artist who writes his/her own songs.
What are mechanical royalties?
Mechanical royalties are earned per-unit when a song is sold on a “mechanically reproduced” physical medium (think vinyl, physical CDs), and nowadays, this includes digital downloads and internet streaming as well.
So in the most general sense, a mechanical right is the right to mechanically “fix” a musical composition onto some form of media (digital or physical) as a sound recording, and thereafter to reproduce it.
This means that you as the songwriter/composer get to control who records and releases the first recording of your musical composition, who records and releases new recordings (a.k.a. cover versions) thereafter, who gets to print and release printed sheet music of your songs, and who gets to re-release any recording made of your song (i.e. on a soundtrack/compilation album). You, the songwriter, have a say in all of this and have the right to receive royalties from the reproductions of your songs.
Why are they called “mechanical” royalties?
“Mechanical” can sound like a confusing word to us in the digital age. The word “mechanical” stems from the fact that back in the early days of the music industry, compositions were physically, or mechanically, manufactured and reproduced onto physical products for public consumption. When music first became fixed into a physical product to be reproduced and distributed to the masses, the first physical recording of a song was on a “piano roll.” A piano roll was to be played on a “player piano.” It was a roll of paper with a bunch of holes. When placed into a player piano, the piano mechanically played the song embedded into the piano roll.
How do I know if I’m earning mechanical royalties?
In essence, if you are distributing your music to stores and streaming platforms worldwide using a digital music distributor like Symphonic Distribution, and if you are seeing sales and streams result, then you are definitely earning mechanical royalties.
More specifically, you’re earning mechanical royalties when your song is:
*Manufactured and sold on physical CD/vinyl products
*Reproduced into ringtones and sold as a ringtone
*Streamed through interactive streaming services (on Spotify, Rdio, Beats, Deezer, etc.)
*Sold in digital retailers for digital downloads (on iTunes, Beatport, Amazon, etc.) outside of the USA.
Problem #1: The Clusterf*ck of International Copyright Law Differences
…outside of the USA. Notice this phrase we threw in above there. Mechanical royalty structure is dictated based on the location of the digital download sale or digital stream. In order to understand your mechanical royalty payments and how to earn them, you have to understand an essential component of international copyright law.
And this is the vital, mind-numbing fact to know: In the USA, the mechanical royalty portion, precisely 9.1 cents, is lumped into the total sum delivered from the retailer (iTunes, Beatport etc.) to your distributor, record label, etc. But in territories outside of the USA, the mechanical royalty is instead allocated from the retailer (iTunes, Beatport, etc.) to mechanical royalty collection agencies in each territory.
Therefore, if you are having high digital download sales or interactive streams in any territory outside of the USA, you have had a chunk of your mechanical royalties sitting in mechanical collection societies in your top-selling territories. If you’re not registered as a songwriter with the societies, they haven’t gone to you for you to claim because the societies don’t know who you are, and they don’t have your songwriter registration on hand. Even if you’re registered with a PRO like ASCAP or BMI, it doesn’t matter – PROs only collect performance royalties, NOT mechanical royalties.
And what do those societies do with your royalties you haven’t claimed? After a certain amount of time passes (this time period differs according to the laws of each society), the organization reserves the right to do with the money as it sees fit.
Problem #2: You, the independent songwriter, can’t collect your mechanicals directly from many collection agencies because you’re not signed to a major publisher.
Mechanical collection societies collect mechanical royalties on behalf of publishers and songwriters. All major countries in the world have a mechanical collection society. For example: Harry Fox Agency (USA), GEMA (Germany), MCPS (Britain), CMRRA (Canada), AMCOS (Australia), etc.
But unlike Performance Rights Organizations (PROs), individual independent songwriters can’t affiliate with just any mechanical collection agency.
Because many mechanical collection agencies only work with publishers, the legitimate publishing companies – NOT individual songwriters. Many of these agencies do not allow individual songwriters to affiliate to collect the royalties that are rightfully owed to them. This includes the Harry Fox Agency, USA’s mechanical collection agency. That means that unless you’re signed to a major publisher, it’s your loss. Not to mention that even if the foreign society does allow songwriters to join, it’s often a complex process of paperwork, tax info, fees, and more headaches.
The good news is that today’s Publishing Administrators, like Symphonic Publishing Administration, have arisen out of a dire need for independent songwriters to be given a voice to these societies. We represent independent songwriters’ compositions to the world’s mechanical collection agencies. We work 110% for the songwriter to register songs with each individual mechanical collection society in 60+ territories. We even dig out the the mechanical royalties from past quarters owed to you.
Publishing Administration services like Symphonic’s have paved the way for the independent songwriter to have a voice and to collect all royalties rightfully owed to them. To navigate the complex world of mechanicals and of publishing in general, we recommend considering a publishing deal with a publishing administrator. Point blank: The entire reason publishing administrators exist is to help independent songwriters!
By Kaitlyn Raterman
Managing Director of Licensing & Publishing of Symphonic Distribution