# Mechanical and Statutory Royalties - any good guides out there?



## rgames (Jan 10, 2021)

I've always focused on performance royalties but I'm starting to release some music on Spotify and elsewhere that might generate other kinds of royalties (e.g. mechanical). But I've never completely understood how that world works. I have both a writer and publisher account with ASCAP.

For example, what, exactly, is SoundExchange? They say they're a digital rights manager for statutory licenses for "featured artists and sound recoding copyright owners" when their music is played on "non-interactive digital sources". I'm not sure what "non-interactive" means but the rest sounds like mechanical royalties. I registered with them a while back but I'm confused every time I go to the website and try to figure out what's going on.

But the Harry Fox agency governs mech royalties in the US (right?). So what's the difference between SoundExchange and Harry Fox? Harry Fox also handles physical media, I know, but if you're digital-only then are they the same thing, like ASCAP and BMI? So you register for one but not the other?

And what about SongTrust? It seems like they're kind-of a one-stop middle-man where you can register your music and they'll deal with both PROs and Harry Fox. I think that's the same service CDBaby offers with their "Pro Publishing" option (right?). But does SongTrust/CDBaby also handle statutory royalties from SoundExchange? And if I register directly with Harry Fox and ASCAP and SoundExchange then I don't need SongTrust/CDBaby Pro Publishing, right?

I'm the only musician and copyright owner on most of my releases, so I think I'm elegible for mechanical and statutory royalties on those tracks (right?). So it seems like I need to figure out the mech royalties world if I'm going to start releasing some music that is not primarily for music libraries.

If anybody knows of a good resource to sort through all of the non-PRO royalties (especially which agencies do the same thing) then I'd greatly appreciate it.

Thanks in advance,

rgames


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## davidanthony (Jan 10, 2021)

Would read that first and then the rest should fall into place!


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## SergeD (Jan 11, 2021)

Some time ago I stumbled on this, it may give you some answer


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## rgames (Jan 11, 2021)

SergeD said:


> Some time ago I stumbled on this, it may give you some answer



Thanks - that video did clear up a few things (assuming he knows what he's talking about...).

I'm surprised that he didn't mention Harry Fox. They're the primary name I've heard in regards to non-PRO royalties. I think SongTrust acts as an intermediary but I'm still not sure what the advantage is of registering with SongTrust if you've registerd with the other agencies.

And I'm still not sure what "statutory" royalties are (as mentioned in the SoundExchange FAQ). I think it's just due to the fact that mechanical royalties are defined in a statute and, therefore, are the same thing but can't say for certain.

rgames


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## Mike Greene (Jan 11, 2021)

rgames said:


> And I'm still not sure what "statutory" royalties are (as mentioned in the SoundExchange FAQ). I think it's just due to the fact that mechanical royalties are defined in a statute and, therefore, are the same thing but can't say for certain.


Things have changed since I was in the records game, so don't quote me on this, but the "statutory rate" was a default rate (set by the government) for how much royalties the songwriters and publisher would get per song/per copy.

A typical use for it would be where permission is not required to use the song. In the film/tv world, sync uses _always_ require permission, of course, but in the record world, actual _permission_ is only needed for the first time a song is released. After than, anyone can do a cover of the song, no permission required, as long as they register it (typically through Harry Fox) and pay the royalties. That royalty amount would be whatever the statutory rate is at that time (it increases each year), although the record company will often negotiate a lower rate (often 75% of the statutory rate.) But if those negotiations are unsuccessful, they can still release the record and simply pay the statutory rate.

If it's your record and your songs and you can control everything, then you can pay whatever rate you want, of course, since you're negotiating with yourself, although I'm years removed from this game, so iTunes or whoever your streaming through may something to say about that.


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## Greg (Jan 11, 2021)

This is the best explanation I've found online and he definitely knows what hes talking about (founder of Tunecore)



You absolutely should register the cues with the HFA asap. Also you should register with the MLC who is taking over collecting back pay (unclaimed mechanicals) for publishers.

"One of the main goals of The MLC is to locate the owners of unmatched https://help.themlc.com/en/support/solutions/articles/60000682711-what-is-a-mechanical-royalty-and-how-is-it-paid-what-are-the-rates- (digital audio mechanical royalties) and fairly distribute the royalties. 
The MLC will make data on unclaimed works and unmatched uses available to be searched by registered users of The MLC Portal and the public at large. Registered users will also be able to submit claims for unmatched activity that they believe relates to their musical works via The MLC Portal. The MLC will continue to reprocess unmatched activity regularly, using any new data and claims we receive. Our goal is to match as much activity as possible."

Thank god the MLC was formed because HFA absolutely sucks. Their customer service is horrible, and their system does not accurately connect cues with publishers and pay properly. I don't know if thats entirely their fault or Spotify's, but it seems borderline criminal, as I've been waiting for them to pay my mechanicals for over a year.


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## Polkasound (Jan 11, 2021)

I don't consider myself an expert in this area, but I've had to deal with it a lot over the years so maybe this information will help. (And my information may not explain everything these services provide, but only what I've used these services for, since I have no involvement in films, games, or videos.)

Non-interactive means you cannot interact with the service to listen to tracks on demand — instead it's the service that determines what you hear when you listen. For example, an internet radio station or podcast is non-interactive digital streaming, whereas Spotify with their playlists is interactive. (Most of my Sound Exchange royalties come from satellite radio and other odd, non-interactive sources like airlines.) Sound Exchange distributes royalties from non-interactive digital streaming services to artists and sound recording owners. Sound Exchange does not pay anything to songwriters or publishers.

If a band releases a cover of your song and mechanically licenses the cover, that will translate to a royalty paid to your song's publisher via Harry Fox Agency. Statutory means that with compulsory licensing whereby the permission is automatically granted via a mechanical license, the rate is fixed. (Songwriters still reserve the right to omit themselves from the mechanical licensing process, although it's rare. I believe Prince is one musician who did that so that he had full control over who could record covers of his music.)

CD Baby can collect Sound Exchange royalties for you and take a cut, or you can register with Sound Exchange yourself and collect 100% directly. Since I do not have a music publishing account with Harry Fox, CD Baby Pro Publishing will collect any mechanical royalties that may come from HFA.

I'm not familiar with SongTrust.


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## rgames (Jan 11, 2021)

Greg said:


> This is the best explanation I've found online and he definitely knows what hes talking about (founder of Tunecore)
> 
> 
> 
> ...



Great info - thanks.

I hadn't heard of MLC - what's the difference between HFA and MLC - MLC only collects for past mechanicals? Other than the fact that HFA, apparently, sucks 

Also, did you look into SongTrust? It seems they're an intermediary that handles the relationship with HFA along with a few other agencies. Both HFA and SongTrust cost $100 to register so if SongTrust includes HFA access along with some other benefits, maybe it's a better option...???

rgames


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## michalioz (Jan 11, 2021)

Greg said:


> This is the best explanation I've found online and he definitely knows what hes talking about (founder of Tunecore)



Τhanks for sharing this. I live in the UK, does it apply to the US only?


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## Greg (Jan 11, 2021)

The MLC is taking over HFA's mechanical distribution duties in a more transparent manner. https://themlc.com/how-it-works

I looked into song trust a little bit but their cut of 15% of all PRO royalties scared me away. I read about some other composers having success with song trust collecting overseas royalties that they weren't getting however the 15% blanket on all PRO income made it a wash. I did ask song trust if they would only collect overseas royalties and cut out the US / bmi side but they said no.

I think song trust exists for artists that don't want a traditional publisher, but also don't want to be bothered with ANY pub admin duties, even the simple stuff like registering cues with pro's.


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## tressie5 (Oct 11, 2022)

Promoting your music is such a rabbit hole! Today, I thought I'd try to get my releases on AccuRadio since they have ambient, electronica, & new age channels. They said I first have to register with SoundExchange, so I did. That took a while. I then emailed AccuRadio for their upload link. Hopefully, they'll give me positive news in a few days.


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## Kyle Preston (Oct 12, 2022)

Most of the questions in this thread are answered in this post: https://aristake.com/what-is-sounde...echanicals-and-how-to-get-all-your-royalties/

It also lightly covers Neighboring Rights, which for me are important. I’m in the U.S. but most of my music is _performed_ in Europe — where neighboring rights are actually collected. NRG is my agency, they’re fantastic!

Because SongTrust collects foreign mechanicals, for me, they’re an easy yes, regardless of the 15% publishing cut. They’ve also _repeatedly _found performances that ASCAP hasn’t found, for me they’re absolutely worth it. I register everything with ASCAP as songwriter and publisher first, then submit to SongTrust, that way all ISRCs and ISWCs match and there’s no ambiguity. Also, if you’re with SongTrust, you don’t have to worry about the MLC, your work is already looked after.

I think YouTube Content ID royalties are a waste of time, unless you’re Beyoncé or U2.

Thank you for posting that video @SergeD, didn’t realize I need to check back in with SoundExchange, it’s been a few years.

As for distributors, definitely do your homework, your genre could be important. I’ve worked/work with:
- Distrokid
- AWAL
- GyroStream
- SootheSounds
- EmuBands
- LANDR
- TuneCore

I’ve got plenty of stories I could tell, depending on the genre ☺️. Some distributors take a % cut, some charge a flat yearly fee, some charge per release. Depending on how many streams you get, the cost is all over the place, so definitely do the math.


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