Knowledge Base Article: KB3903
Topic: Publishing Administration, Royalty Issues, YouTube Content ID Issues

Title: Streaming Mechanical Royalty Earnings Information


Last Reviewed: Jul 14, 2017
Keywords:

Streaming Mechanical Royalty Earnings Information

This article explains what "streaming mechanicals" are, how they work, and how you can earn money from it.


Q.  What is a mechanical from a stream?

A.  Mechanicals from streams aka streaming mechanicals: A mechanical royalty is a royalty paid to a songwriter whenever a copy of his or her song is streamed via an interactive service.


Q.  What’s an Interactive Service vs. Non-Interactive Service?

A.  The difference between these two different types of digital music services is as follows:

Interactive Service: The user selects the specific song so a mechanical royalty is due (e.g. Spotify, Rhapsody)

Non-Interactive: The user does not select a specific song so only a performance royalty is due (e.g. Pandora, Rdio)


Q.  So streaming mechanical royalties are earned for each play of my song on an interactive service?

A.  Yes, however, only for those interactive services where the streaming mechanical rights are licensed via a statutory licensing process. For direct-licensing situations, the pricing includes compensation for all necessary rights, including streaming mechanical rights.


Q.  So how does it work?

A.  Whenever a song is streamed via any interactive service (e.g. on Spotify, Rhapsody, Zune), a mechanical royalty is owed to the Songwriter/Publisher. The royalty owed varies by digital service and is based on subscriptions and ad revenue. On average, a mechanical stream pays around $.0008 per stream.


Q.  What happens when a song is streamed in the U.S.?

A.  In the United States, the mechanical royalties are deducted by the digital store and held until they are notified by the Songwriter/Publisher of where to send the royalties. These royalties are NOT paid through with your performance royalties by your composer society.  If you are represented by AudioSparx Music Publishing Administration service, we register your compositions directly with the digital stores in the United States so you get paid. Remember, being affiliated with ASCAP, BMI, or SESAC will not get you your streaming mechanical royalties. They are performance societies and do not collect or license mechanical rights.


Q.  What happens when a song is streamed outside of the U.S.?

A.  For any stream outside of the U.S. (e.g .on Spotify, Deezer, Simfy), a mechanical royalty is deducted and paid to the local collection society (e.g. JASRAC in Japan, MCPS in the UK, GEMA in Germany etc.).  This is then paid to you through your Performing Rights Organization society.


Q.  So should I register with all the societies in the world?

A.  Composer societies will not let you affiliate with multiple different societies simultaenously.  For example, in Japan and Australia, if you are already affiliated as a songwriter with any other society in the world (like ASCAP, BMI, PRS/MCPS, GEMA, SACEM, etc.) you cannot become a member of JASRAC in Japan or APRA/ AMCOS in Australia.  Additionally, in both cases you must also be a resident of that country. 


Q.  So how do I get the ball rolling?

A.  By opting into AudioSparx's Music Publishing Administration service, we handle all of this for you. We will register your compositions as your administrator, and you are still listed as the publisher if you have previously affiliated as one. We do the registrations electronically, within one week of receiving your information.


Q.  How do I communicate the necessary track-level info to AudioSparx?

A.  For the tracks you upload to AudioSparx, make sure to configure all the composers associated with each of your tracks, including their society, IPI number, and earnings share.


Q.  When will I get paid?

A.  The answer depends on the collecting society, but this process usually takes between twelve and eighteen months. Why? Some of the societies account quarterly and some every six months.  Also, if your mechanical royalties have been sitting unclaimed, the society will have to sort through their back log of data to locate your mechanicals due for the streams from previous quarters.


To learn more about participating in AudioSparx's Music Publishing Administration service, please see this article:

Publishing Administration and Performance Royalty Issues


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