Sometimes, those two types of royalties can go hand in hand — that is the case of music streaming, for example. Whenever a Spotify user chooses a song to stream, they trigger both types of royalties. Then, since to play the track, the streaming service has to reproduce the underlying composition, the mechanical royalties are due. Mechanical royalties are royalties that are generated each time a musical composition is reproduced, whether physically or digitally via on-demand streaming or download-to-own services.
A nice way to wrap your head around mechanics is to trace them back to their origins. Back in the day, whenever a label wanted to put out some music for sale, it had to mechanically reproduce the composition by printing it on a blank vinyl disc. Here is where the royalty got its name — whenever the label wanted to print new physical mediums, it had to compensate the songwriter for the use of the composition. Then, as the music industry has entered the 21st century, music sales have shifted to the digital platforms — first, iTunes, and then streaming services spearheaded by Spotify.
So, as you probably know already, there are two sets of copyrights behind every single song: the musical composition harmony, melody, lyrics, and so forth , which belongs to songwriters, and the master recording, which is a particular audio expression of that underlying composition.
In fact, mechanical royalties will often flow from the owners of master copyright i. That is the case whenever the label wants to produce physical copies of the song — and even whenever the music is sold on download-to-own platforms like iTunes.
For example, in a major royalty producing territory such as France, both mechanical and performance royalties will be collected and paid through the same entity, SACEM. For physical and downloads, the U. The effective rate currently is 8. This means the international streaming services pay a fee based on a percentage of their annual revenue to the mechanical collection society.
The society is then responsible for matching payments. This international collection aspect is crucial for anyone with songwriting and publishing credit for songs with international recognition. Time is limited to claim the unclaimed royalty funds, usually around 3 years for mechanical royalties, depending on the country.
The Music Modernization Act of helped update various aspects of the music publishing sector, especially for the mechanical streaming royalty rate. As previously mentioned, the MMA creates a mechanical licensing collective similar to how Europe handles its interactive streaming royalties. This blanket license system is designed to make it easier for streaming services to license songs without fear of copyright infringement for not correctly matching payments.
This removal of legal liability was a big reason the major streaming services supported the MMA. Under this law, virtually all U. Many of the woes that brought MMA to law were due to sloppy record keeping and incomplete registration data from rights holders and creators. Additionally, the MMA has changed the rate setting proceedings for how the CRB can consider future mechanical royalty rates. In the past, the judges were barred from considering other free market rates such as what a song could earn in a TV show or movie.
Under the new MMA law, judges will be able to consider rates under a willing-buyer, willing-seller standard. This means a fair-market value will be considered in future mechanical royalty rate proceedings, which has never been done before. A good resource to check is the website www. But be careful: while the song may be in public domain, the particular arrangement you chose may currently be under copyright and the song will need to be licensed. So how do you obtain this mythical mechanical license?
There are several methods. One is directly from the music publisher. Finally, you can obtain a compulsory license as described in the U. Copyright Act; however, most people do not go this route as it is very labor intensive and requires quite a bit of ongoing administration and reporting after the license is issued.
You will also need to supply the name of your recording and its projected release date the date you intend to begin to distribute copies of the recording. You may also be asked for the record company name, which is the entity that is officially responsible for the recording — probably the school or your department. Under current U. Actively scan device characteristics for identification. Use precise geolocation data.
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