“Every time your song is streamed, downloaded, or reproduced—a mechanical license is earning you money”
This guide covers: What mechanical licenses are, the statutory rate and cost calculations, licensing process, how to collect royalties, relationship to sync and master rights, common mistakes, and step-by-step action plan. By the end, you’ll understand one of music’s most important (yet least understood) revenue sources.
1. What Is a Mechanical License?
Definition: Mechanical License
A mechanical license is the legal permission to reproduce a musical composition (song) in any form—physical copies, digital downloads, streams, or remixes. It grants the right to make a copy of your song, whether it’s a cover version, a remix, or even a karaoke track.
The word “mechanical” comes from the era when player pianos and mechanical music boxes reproduced songs. The license type stuck around, even though reproduction today happens digitally.
Key Concept: Compulsory Licensing
Critical distinction: Once your song is commercially released, you cannot refuse a mechanical license. It’s called a “compulsory license”—anyone can obtain it at a set statutory rate. You can’t say “no, I don’t want my song covered.” The law requires you to license it.
This is different from sync licenses (you can refuse), master rights (you control), or publishing rights (you control). Mechanical licenses are mandatory by law.
What Mechanical Licenses Cover
- Cover versions: Artists recording their own version of your song
- Streaming: Every stream of any version of your song
- Digital downloads: iTunes, Bandcamp, or any digital store selling your composition
- Physical copies: CDs, vinyl, or any physical media containing your composition
- Remixes: DJ or producer remixing your track
- Samples/interpolations: Another artist using substantial portion of your composition
- Karaoke versions: Karaoke backing tracks of your song
- Music boxes & ringtones: Any reproduction of the composition
Who Issues Mechanical Licenses?
- Music publishers: Direct licensing from the songwriter’s publisher (preferred method)
- Harry Fox Agency: Aggregates mechanical licenses for thousands of publishers
- Spotify/Apple/YouTube: Issue mechanical licenses automatically when music is distributed to their platforms
- SoundExchange: Handles mechanical royalties for digital performances
- Direct from songwriter: If songwriter hasn’t assigned to publisher, you can license directly
Why Mechanical Licenses Matter to You
- Passive income: Earn money without promoting or marketing
- Guaranteed payment: Statutory rate = no negotiation, automatic payment
- Lifetime earnings: Your song earns mechanical royalties for your entire life + 70 years after
- Multiple revenue streams: Same song can generate mechanical royalties from streams, covers, downloads, samples
2. Mechanical Rights vs Sync Rights vs Master Rights: The Difference
Three Completely Different Rights
Every song has three separate ownership layers. Understanding the difference is critical to managing your music business.
| Right Type | What It Covers | Who Owns It | How You Get Paid | Refusable? |
|---|---|---|---|---|
| Mechanical License | Permission to reproduce/copy the song (composition) | Songwriter or music publisher | Statutory rate ($0.091/track) or negotiated | No (compulsory) |
| Sync License | Permission to pair song with visual media | Publisher (for composition only) | Negotiated per-project ($500-$500,000+) | Yes (you can refuse) |
| Master Rights | Ownership of the specific recording/audio | Artist or record label | Streaming royalties, sample clearance fees | Yes (you control it) |
| Performance Royalties | Payment for public performance (radio, live, venue) | Publisher + artist through PRO | PRO collects from radio, venues, streaming | No (automatic collection) |
Real-World Comparison
Mechanical Example
Artist covers your song. New recording is mechanically reproduced (new master). They pay mechanical royalties to you (the composer) because they reproduced your composition.
Sync Example
Film director wants to use YOUR version of YOUR song in a movie. You (or your publisher) negotiate a sync fee. This is separate from mechanical—it’s for pairing the song with visuals.
Master Example
Streaming platform pays master royalties when your recording is streamed. This goes to whoever owns the master (you if independent, label if signed). Separate from mechanical.
Performance Example
Your song plays on radio. Radio station pays performing rights organization (ASCAP/BMI). PRO distributes to you. Separate from mechanical royalties.
3. The Statutory Rate: How Much Mechanical Licenses Cost
What Is the Statutory Rate?
The statutory rate is the government-set price for mechanical licenses. The U.S. Copyright Office adjusts it annually based on inflation. As of 2024, the rate is $0.091 per track.
Translation: Every time someone creates a reproduction of your song (stream, download, remix, cover), they owe you $0.091. No negotiation, no discussion. It’s law.
Statutory Rate Changes (Recent Years)
| Year | Statutory Rate | Change |
|---|---|---|
| 2022 | $0.091 | No change |
| 2023 | $0.091 | No change |
| 2024 | $0.091 | No change |
| 2025 | $0.091 (projected) | No change likely |
Note: Rate is adjusted every January 1st by the Copyright Royalty Board. Check copyright.gov for most current rate.
How the Statutory Rate Works in Practice
Example 1: One Stream
Your song streams 1 time on Spotify. Mechanical royalty: $0.091 owed to you (songwriter/publisher).
Example 2: 1,000 Streams
1,000 streams × $0.091 = $91 owed in mechanical royalties
Example 3: 1,000,000 Streams (1M)
1,000,000 × $0.091 = $91,000 owed in mechanical royalties
Example 4: 10,000,000 Streams (10M)
10,000,000 × $0.091 = $910,000 owed in mechanical royalties
Who Pays the Mechanical Royalties?
- Streaming platforms: Spotify, Apple Music, YouTube report to Harry Fox/PRO
- Record labels: When distributing physical copies or downloads
- Digital retailers: iTunes, Bandcamp, etc. when selling digital downloads
- Artists covering your song: When they commercially release their version
Why Everyone Uses the Statutory Rate
The statutory rate is compulsory—nobody negotiates it. It’s set by law. A struggling independent artist pays the same $0.091 as Taylor Swift covering a song. A major label cover version uses the same rate. No exceptions.
This is actually good for songwriters: Everyone pays the same, reliably. No haggling, no refusals. The rate is automatic.
4. How to License Your Composition: Step-by-Step
The Basic Process
1
Song Must Be Commercially Released
Your song needs to be released on a commercial platform (Spotify, Apple Music, YouTube, etc.). Until then, no one can obtain a mechanical license.
2
Register Your Copyright
Register your composition with the U.S. Copyright Office. File PA form (Performing/Audio work). Cost: $65. This creates official proof of ownership.
3
Register with a PRO
Register with ASCAP, BMI, or SESAC (pick one). Cost: $50-200/year. They collect mechanical royalties from streams and make it automatic.
4
Register with Harry Fox Agency (Optional)
Harry Fox collects mechanical royalties from digital services. Some PROs handle this; others don’t. Verify your PRO covers it, or register with Harry Fox separately ($0 sign-up, percentage-based fees on collection).
5
Artists Obtain Licenses & Pay
When another artist wants to cover your song or remix it, they obtain a mechanical license (usually through Harry Fox or directly from your publisher). They pay the statutory rate automatically.
6
Receive Royalty Payments
Mechanical royalties are collected and paid monthly/quarterly. Your PRO or Harry Fox sends payments directly to you. Monitor your account for accuracy.
Automatic Collection (Most Common Path)
Here’s what usually happens without you doing anything special:
- You release your song on Spotify/Apple/YouTube (through aggregator)
- Your aggregator or PRO registers it for mechanical collection
- Streams happen automatically
- Mechanical royalties accrue monthly
- Payments distributed quarterly
Key point: With streaming, mechanical collection is mostly automated. You don’t need to do anything special except ensure your song is properly registered.
5. Mechanical License Costs: Real Examples
Scenario 1: Your Song Streams 1 Million Times
1,000,000 streams × $0.091 = $91,000 total mechanical royalties
How it’s distributed: Your aggregator or PRO collects from Spotify/Apple, takes 15-20% fee, sends you remainder. You receive: ~$72,800-$77,350.
Timeline: Payments arrive 1-3 months after streams (quarterly reporting).
Scenario 2: Cover Artist Records Your Song
Your song: “Beautiful Day” (composition)
Cover artist: Acoustic folk version of “Beautiful Day”
Their release streams: 500,000 in first 6 months
Mechanical owed: 500,000 × $0.091 = $45,500 (paid to you, the original songwriter)
Your income: You earn this separate from your own version’s streaming revenue. Same composition, multiple artists, multiple income streams.
Scenario 3: Major Label Release
Physical sales: 1,000,000 copies × $0.091 = $91,000
Streaming: 10,000,000 streams × $0.091 = $910,000
Total mechanical royalties: $1,001,000 (just from mechanical, separate from performance royalties)
Your take: If you own 100% publishing, you get it all minus PRO fees (~$850,000-$900,000). If publisher owns half, you get half.
Scenario 4: Negotiated Rate (Below Statutory)
Scenario: Indie artist wants to sample heavily from your song. 30% of their track is your composition.
Negotiated rate: 30% of statutory rate = $0.0273 per stream
Their streams: 500,000
Mechanical owed: 500,000 × $0.0273 = $13,650 (vs $45,500 at full statutory)
Advantage: Artist gets better deal; you still get paid fairly for proportional use.
Calculating Your Mechanical Royalty Income
Simple formula: Total Streams × $0.091 = Total Mechanical Owed
Account for:
- PRO collection fees: 15-20% (varies by service)
- Aggregator fees: 0-20% (if using one)
- Harry Fox fees: ~10% (if using their service)
- Publishing ownership: If split with publisher, you receive your percentage
Example: 1,000,000 streams → $91,000 gross → 18% collection fees → $74,620 net to you (if you own 100% publishing).
6. Who Owns and Controls Mechanical Rights?
Ownership Scenarios
Scenario A: You Wrote the Song (Independent)
You automatically own the composition and mechanical rights unless you’ve signed them away. You can license them directly or through a publisher. You receive 100% of mechanical royalties (minus collection fees).
Scenario B: Signed Publishing Deal
Your publisher owns or controls your mechanical rights. They collect royalties and pay you according to contract (typically 50-75% of mechanical revenue). Publisher keeps the administration fee.
Scenario C: Record Label Controls Publishing
Some recording contracts include publishing rights. Label owns or controls both master and mechanical rights. You receive percentage per contract (usually 10-25% of mechanical revenue). Label takes the rest.
Scenario D: Co-Written Song
If you co-wrote the song with others, you own a percentage of mechanical rights proportional to your writing credit. All co-writers receive mechanical royalties split by ownership percentage.
Verifying Who Owns Your Mechanical Rights
- Check your contracts: Any publishing deal, record deal, or songwriter agreement should specify mechanical ownership
- Search PRO databases: ASCAP.org, BMI.org show who collects mechanical royalties for each song
- Contact your aggregator: If you distributed through DistroKid, CD Baby, etc., they can show mechanical ownership
- Harry Fox Agency: Harry Fox database shows registered mechanical rights holders
7. Common Mistakes (And How to Avoid Them)
Mistake #1: Not Registering Your Copyright
Problem: Your song is streamed millions of times, but without copyright registration, you have weaker claim to royalties. Harder to prove ownership in disputes.
Solution: Register with U.S. Copyright Office (PA form, $65) immediately after creating each song. Takes 15 minutes online.
Mistake #2: Not Registering with a PRO
Problem: Your songs stream but mechanical royalties go uncollected. PROs aren’t automatically notified—you must register.
Solution: Register with ASCAP, BMI, or SESAC ($50-200/year). They’ll collect mechanical royalties from streaming platforms automatically.
Mistake #3: Confusing Mechanical with Performance Royalties
Problem: You think you’re getting mechanical royalties from Spotify, but you’re only getting master royalties. You miss mechanical royalties entirely.
Solution: Understand the difference. Mechanical = composition reproduction. Performance = public performance. Both can happen from the same stream. Ensure PRO collects both.
Mistake #4: Signing Away Mechanical Rights to Publishers Without Negotiating
Problem: Publisher takes 50% of mechanical royalties. Better publishers might take 25-30% if you negotiate.
Solution: Negotiate publishing deals. Ask about mechanical royalty splits specifically. 85-90% to you (15-10% admin fee) is reasonable.
Mistake #5: Not Tracking Co-Written Songs
Problem: You co-write a hit song but never register your writing percentage. Co-writer claims 100%. You get nothing.
Solution: Register writing credits with PRO and SoundExchange. Specify your percentage (33% for 3-way split, etc.). Document in writing with co-writers.
Mistake #6: Accepting Below-Statutory Rates Without Understanding
Problem: Artist covers your song at $0.05 per stream (below $0.091 statutory). You agreed without knowing market rate.
Solution: Most artists/labels use statutory rate automatically. Only negotiate below-statutory if song is very new or sampling is partial. Know the statutory rate ($0.091).
Mistake #7: Not Monitoring Mechanical Payments
Problem: PRO collects mechanical royalties, but mistakes happen. Wrong number of streams reported, incorrect songwriter credit, missing payments. You don’t notice for months.
Solution: Check your PRO account monthly. Verify stream counts match your actual streams. Report discrepancies immediately.
8. Quick Reference: Three Rights Compared
| Aspect | Mechanical License | Sync License | Master Rights |
|---|---|---|---|
| Grants | Right to reproduce composition | Right to pair with visuals | Ownership of specific recording |
| Owns | Songwriter/publisher | Publisher | Artist/label |
| Cost | $0.091 per reproduction (statutory) | Negotiated per use ($500-$500k+) | Varies by platform |
| Can Refuse? | No (compulsory) | Yes | Yes |
| Automatic? | Yes (once registered) | No (case-by-case) | Yes (streaming only) |
| Covers Streams? | Yes | Only with visuals | Yes |
| Covers Downloads? | Yes | Only with visuals | No |
| Covers Covers? | Yes | No | No |
9. Your Action Plan: Maximize Mechanical License Income
- Register your copyright: Go to copyright.gov. File PA form for each composition. Cost: $65. Takes 15 minutes. Provides legal ownership proof.
- Pick a PRO and register: Choose ASCAP, BMI, or SESAC. Register your songs. Cost: $50-200/year. This enables automatic mechanical collection.
- Register with Harry Fox (optional): If your PRO doesn’t collect mechanical from all services, register separately. Harry Fox handles mechanical licensing for independent publishers.
- Verify ownership percentages: For co-written songs, ensure all writers are registered with correct percentages. Prevent disputes and ensure fair payment.
- Monitor streams and payments: Check your PRO account monthly. Verify stream counts match your actual streams. Report discrepancies.
- Track mechanical income: Use spreadsheet to track mechanical royalties by song/month. Understand which songs generate most income.
10. Mechanical License FAQ
Mechanical Licenses Are Your Reliable Income Stream
Mechanical licenses are one of the most underrated income sources in music. Unlike negotiated deals that vary wildly, mechanical royalties are automatic, compulsory, and reliable. The rate is set by law. Payment is guaranteed. And it scales with your success.
A song that gets 1 million streams generates $91,000 in mechanical royalties—money that flows directly to the songwriter and publisher, separate from master royalties, performance royalties, and sync fees. That’s income that doesn’t require marketing, touring, or negotiation. It’s passive.
The key difference between musicians who capture this income and those who don’t? Registration. Copyright office. PRO membership. Three simple steps that take less than an hour and cost under $100.
Start today: Register your copyright, join a PRO, and start collecting mechanical royalties on every stream, download, and cover version. Over a career, mechanical royalties can add up to six or seven figures.