The U.S. Copyright Office sets a statutory mechanical royalty rate that requires a certain payment for each reproduction of a copyrighted work.
Physical sales and digital downloads have a flat fee of 9.1 cents for songs under five minutes.
- Works over five minutes long get a rate of 1.75 cents per minute.
- Ringtones have a rate of 24 cents per ringtone.
Digital audio mechanical royalties from interactive on-demand streaming via digital service providers (DSPs) are more complex and do not have a set rate. They are based on the DSPs’ revenue, the number of subscribers, money paid to the sound recording owners, and performance royalties.
The MLC will pay out mechanical royalties to self-administered songwriters, composers and lyricists; music publishers; and administrators after it has matched usage data from DSPs. The MLC will distribute 100% of the royalties it collects from DSPs - it does not keep a percentage of the royalties.