What Are Mechanical Royalties?

- manufactured and sold on physical CD/vinyl products

- manufactured digitally and sold in digital retailers (iTunes, Beatport, etc.) outside of the U.S. **

- manufactured digitally and streamed through interactive streaming services (Spotify, Rdio, Beats, etc.)

**There’s one vital, mind-numbing trick here: In the U.S., 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 outside of the U.S., the mechanical royalty is instead allocated from the retailer (iTunes, Beatport etc.) to mechanical royalty collection societies 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 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 them 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.

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