FAQ - What are mechanical royalties?
Mechanical royalties are per-unit payments collected by record companies for the manufacture and distribution of songs on CDs and tapes, usually based on the current statutory rate as fixed by the Copyright Act. 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.
who pays the record company these royalties ?
the record stores or users who sale music pay the record label then the label pays the songwriter, producer and/or publisher.
So, how much does the songwriter typically get?
Once a song is recorded and released to market, anyone can record it legally by paying a Mechanical Royalty fee to the owners. Harry Fox Agency (HFA) collects Mech. Royalties and pays the owners. Check out their website; http://www.harryfoxagency.com to see how it works. (I don’t know.) There may be other companies that do it these days. The business has changed a lot.
It seems logical that you (or your publisher, if other than yourself, or the record label, anyone with a legal interest in the song) would need to register your song, once it was released, with HFA to have them represent you in this way.
At one time a fee of $45 would authorize you to make a run of 1,000 hard copies of the song (1,000 CD’s) for example. If an artist had a hit with it and wanted to sell more I’m sure the fee structure could be obtained from HFA. How much of that $45 or other amount gets paid to the song-owner? Check out the website.
More profitable are Songwriting Royalties and Publishing Royalties. As the songwriter you own 100% of Songwriting Royalties and 100% of Publishing Royalties. When your song is played in a revenue-generating venue, like radio, the radio station reports the plays to Performance Rights Organizations (PRO’s). BMI, owner of http://www.Songwriter101.com , is a PRO. They calculate the plays and the songs that got played the most earn royalties.