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It’s always a great feeling when you find out that a song you’ve written has been placed on an album set for release. Once this excitement wears off, you could be left wondering… when/how do I get paid? It all depends on the use.

As Part I of a series I’d like to call “Where’s My Money?”, we’re going to talk about the royalties generated from the sale of music on CD, vinyl, cassette (yes, they still exist) and/or digital download format. These are called mechanical royalties.

What is a mechanical?

The term “mechanical” goes back to the early 20th Century, when Congress passed a copyright law that made it so music publishers were paid for the right to mechanically reproduce music compositions onto piano rolls for self-playing pianos. Once this law passed, publishers began issuing “mechanical licenses” to piano manufactures and collecting royalties from these sales.

Though the medium through which music is sold has shifted from piano rolls to vinyl, vinyl to tape, tape to CDs and CDs to digital downloads, we still use the term “mechanical” to describe the sale of music.

How Do Mechanicals Work?

A mechanical royalty is generated whenever a song is sold (via CD, vinyl or digital download). The label responsible for the song’s release collects the revenue, then pays the mechanical royalties to the rights holder of the composition (i.e. the music publisher).

If the song has never been released before, the owner of the composition must give the label consent to its release; this is called the first use clause. Once it is released, anyone can record their version of the song under the compulsory mechanical license granted by law after the release of the first use. However, the terms of a standard mechanical license are much more lenient to the labels than compulsory, and labels only use compulsory in two cases: (1) if the publisher demands it, or (2) if the publisher won’t sign or issue a mechanical license.

The standard mechanical royalty rate in the United States is 9.1 cents per song sold (or 1.75 cents per minute if the song is 5:01 or longer). This royalty is split among the rights holders according to their share of the pie. For example, if you have two writers who are self-published, they each get 4.5 cents per song sold. In this case, if their song was purchased 100,000 times, they will each receive $4,500.

If your song is selected to be on an album, the label will contact you (or your publisher) to license the use of your song. This process will also include submitting proper tax payee forms: in the United States, a W-9 is needed for US citizens/companies; for others, a W-8BEN.

Once the license is signed and payee information is received, they will set you up in their royalties system and you can sit back and wait for your check.

Where’s My Money?

If you find yourself in the situation where your song was placed on a major record that was released, and you haven’t seen any money from it, don’t fret just yet. Typically royalties are paid out quarterly and checks are issued 45 days after the end of the quarter.

For example, if the album came out in January (1st quarter) and you were all set up in the label’s royalty system, you can expect to see a check sometime around May 15th, since the 1st quarter ended on March 31st.

If the song was released on a major label and no one has contacted you for a license, contact their business affairs department. If it’s a smaller label, call and ask who handles the mechanical royalties. Don’t assume that the label just wants to keep your money; with the 2008 Copyright Royalty Board ruling that labels have to pay late fees to music publishers for late payments, it’s more beneficial to the label to pay you.

Be cordial, but be persistent: you deserve to be paid, but you want to avoid burning any bridges. This industry is too small to act out and expect no repercussions.

Here are some things you can do to make sure you get your money:

1. Register your songs with a Performance Rights Society. This not only allows your work to generate performance royalties, but this is one of the main ways labels locate writers. You can’t get paid if they can’t find you.

2. Complete a split sheet for every song, especially if you have co-writers. This can prevent any split disputes in the future, a scenario in which no one gets paid until all parties agree on who owns what percentage of the song.

3. Respond to inquiries in a timely manner. If I had a dollar for every time a writer who ignored license requests yet got mad because they didn’t get paid, I could buy a whole new wardrobe.

It’s called the music business for a reason: you have to take care of the business part.

Orondé

Orondé Jenkins is a multidisciplinary artist and media consultant based in Nashville. No Average Journey was born out of his desire to help artists grow in their lives and careers.