Mechanical royalties pay the songwriter and publisher every time a song is reproduced — but the rate and the math change completely depending on the format. Physical sales (CDs, vinyl) and permanent downloads in the US pay the statutory rate: currently 12 cents per song for tracks under five minutes, set by the Copyright Royalty Board. Sell 10,000 CDs and that’s $1,200 in mechanicals owed. Simple, countable, real money.
Downloads work the same way — 12 cents per download — but the market is dying, so treat it as legacy income. Interactive streaming is the maze: there’s no flat per-stream rate. Instead, services pay a percentage of revenue into a royalty pool, and your share depends on your streams relative to everything else, with a complex formula involving the service’s revenue and subscriber counts. That’s why per-stream payouts wobble between roughly $0.003 and $0.005 and nobody can quote you an exact number.
Collection paths differ by format, and this is where indies lose money. Physical and download mechanicals in the US have traditionally flowed through the Harry Fox Agency or direct licenses. Streaming mechanicals now flow through the MLC under the blanket license. Outside the US, each country’s mechanical society handles its own. One song, three pipelines — and each one only pays if your registration and metadata are correct in that system.
The practical takeaway: don’t compare formats by rate, compare by volume. Twelve cents a CD sounds great until you realize you sold 400 copies. A third of a cent a stream sounds insulting until you have two million of them. Register everywhere — HFA or your publisher for physical and downloads, the MLC for US streaming, your PRO for performances — and let every format pay you.
About the Author – Ruben Burgos: Ruben Burgos brings over 25 years of music expertise and more than 15 years of model guidance to the table. He is the indie major pinnacle to retaining credits for musicians and helping them navigate this wicked industry without the fuckery.