The Basics Of Mechanical Royalties

 

The professional needs to be compensated for his or her efforts. This is particularly true for the musician who puts in hours of hard work and a lot of his/her creative talents, skills and imagination. So it is only natural that the person is compensated adequately once the original work is played again. The compensation should not be just in the form of credits, it should also be monetary like the “Mechanical Royalties”.

 

What Are Mechanical Royalties?

This is the royalty that is paid to a songwriter when any song of the writer is recorded again. Also known as the Mechanical License, this is the money the songwriter can hope to earn whenever the song is used by someone else. This is a part of the Copyright Act, and since the songwriter owns the Copyright, the person is entitled to this money whenever the original work is reproduced. Though in most cases the songwriter gets the Mechanical Royalties, but sometimes it is shared with others too, particularly if the song was played by a band.

 

This is a dream come true for most songwriters and composers. Of course, every songwriter would love to come up with a big hit, but when it hits the charts and stays there, the writer can hope to earn much more from it through the royalties, than what was made initially during the composition. Naturally, Mechanical Royalties have become a very important term in the music industry today. In fact, this is often the main source of income for famous musicians.

 

Some really serious money is being made out there with Mechanical Royalties. For instance, according to estimates, if 1 million copies of the CD have been sold, and if the song is of less than 5 minutes, then the songwriter could end up earning $91,000 just for that one song. Recording companies often try to keep the rate of royalty to what it was when it was initially recorded.

 

However many songwriters insist that the rate should be what it is on the date of re-recording. The statutory mechanical rate goes up from time to time, and so by insisting this, they can earn more money.

 

Mechanical Royalties Is Not As Simple As It Seems

It might seem very simple to a lot of people. But that’s hardly the case. The fact is, Mechanical Royalties is treated differently in different countries. In fact, there is a huge difference in the way it is used in the US and elsewhere.

 

According to the US laws, only the copyright owner has the right to make records of the original work for public distribution. However there is a provision in the Copyright Act, according to which, others are allowed to compose or record the song, and that too without any negotiated license. However the original composer or the songwriter must be paid in the form of royalties.

 

And once the money is paid, the new composer has the right to record it once more. Because of this, the same song might have several versions, and all of them could be copyrighted to various artists.

 

Harry Fox Agency or the HFA is the main licensor of Mechanical Royalties in the US, and is also responsible for collecting and distributing the royalties. This is a state-approved agency that works for the Copyright owner and his/her interests. The agency is also allowed to audit the sales of the recording company. There are some other organizations too, but Harry Fox remains the #1. The agency charges 6% as the commission from the owner of the Copyright for the services offered.

 

The rate of Mechanical Royalties also varies from one country to another. In the US, as of 2006, the rate stands at 1.75 cents for each minute.