Mechanical Licensing
A mechanical license grants the right to reproduce and distribute a copyrighted musical composition in a recorded format — whether on CD, digital download, or interactive audio stream. The term 'mechanical' dates to the era of player piano rolls, the first mechanical reproduction of music. In the streaming era, mechanical licenses for interactive streaming services are issued by the Mechanical Licensing Collective (MLC) under a compulsory license rate set by the Copyright Royalty Board. Cover songs, sample-based recordings, and all commercial releases of existing compositions require mechanical licenses.
Mechanical licensing generates one of the primary revenue streams for songwriters and music publishers. The Music Modernization Act of 2018 fundamentally restructured mechanical licensing for the digital era, replacing a broken song-by-song voluntary licensing system with a blanket compulsory license administered by the MLC. Understanding mechanical licensing is essential for any attorney advising music creators, publishers, labels, or digital music services.
The compulsory mechanical license — allows anyone to make and distribute phonorecords of a previously released musical composition by complying with statutory notice and royalty requirements. The foundational provision for the mechanical licensing system.
Established the Mechanical Licensing Collective (MLC), created a blanket compulsory license for digital music services, updated the royalty rate-setting process, and modernized mechanical licensing for the streaming era.
The most recent CRB proceeding setting mechanical royalty rates for interactive streaming services through 2027 — currently approximately 15.1% of service revenue allocated to all musical compositions streamed.
The MMA fundamentally changed the mechanical licensing landscape — eliminating the underpayment problem that had plagued streaming services and providing publishers and songwriters a more reliable revenue stream. However, the blanket license system has also shifted negotiating leverage: digital services now deal with the MLC rather than individual publishers, reducing publishers' ability to negotiate above-statutory rates for interactive streaming. Physical and download mechanical rates remain separately negotiated.
Advise songwriter clients that mechanical royalties from streaming flow through the MLC — they must register their works at themlc.com to receive payments.
For cover song releases, confirm mechanical license clearance before distribution — digital distributors like DistroKid include mechanical licensing through the MLC as part of their service, but physical releases require separate licensing.
The statutory mechanical rate (currently 9.1 cents per copy for songs under 5 minutes) applies only to physical and permanent downloads — streaming rates are a percentage of service revenue, not per-stream.
Controlled composition clauses in recording agreements typically reduce mechanical rates to 75% of statutory for artist-written songs on their own albums — advise songwriter-artists to negotiate this provision carefully.
Register compositions with the MLC before a streaming release — royalties for unregistered works are held in reserve, and late registration delays payment.
A mechanical license is required for every reproduction of a copyrighted composition in a recorded format — including interactive streams.
The MLC administers the blanket mechanical license for interactive streaming services — digital services pay the MLC, which distributes to publishers and self-administered songwriters.
Physical and download mechanical rates are statutory — currently 9.1 cents per copy for songs under 5 minutes.
Streaming mechanical rates are a percentage of service revenue set by the CRB — currently approximately 15.1% of applicable revenue allocated among all songs streamed.
Controlled composition clauses in recording agreements can reduce mechanical royalties for artist-written compositions — a significant issue for songwriter-artists.
Yes. Recording and distributing a cover of a previously released song requires a mechanical license. For digital distribution, services like DistroKid and CD Baby include mechanical licensing through the MLC. For physical releases, obtain a license directly from the publisher or through a mechanical licensing agency like Harry Fox.
For physical recordings and permanent downloads: 9.1 cents per copy for songs 5 minutes or under (prorated for longer songs). For interactive streaming: approximately 15.1% of applicable service revenue, allocated among all compositions streamed — not a per-stream rate.
The Mechanical Licensing Collective (themlc.com) administers the blanket mechanical license for digital streaming services, collects royalties from Spotify, Apple Music, Amazon, and other interactive services, and distributes them to music publishers and self-administered songwriters. Before the MLC, significant mechanical royalties went unpaid because services couldn't identify rights holders. Registration with the MLC is now essential for songwriters and publishers to receive streaming mechanical royalties.