What are mechanical royalties?
Music royalties are generated through the licensed use of musical copyrights. There are two copyrights associated with every record. One for the song as it is written down (the composition) and the other for the recording (the master).
Composers, songwriters, and publishers receive royalties from the composition copyright while performers and record labels royalties’ come from the master copyright.
Mechanical royalties are owed to songwriters, composers, and publishers when their songs are reproduced as physical products, such as CDs, Vinyl, and DVDs, streamed or downloaded, and used in TV, film, and radio.
What is the MCPS?
In the United Kingdom, mechanical royalties are collected and distributed by the Mechanical Copyright Protection Society (MCPS).
If you’re a composer or songwriter and you’re not working with a publishing company, signing up with the MCPS can help you to make sure you receive any mechanical royalties owing to you.
When do I need to apply for a license with MCPS?
If you’re planning to commercially release music in a physical format like CD, vinyl, DVD, cassette and so on, then it’s important that you have been granted an Audio Product License from the MCPS.
There are two types of Audio Product Licences available:
AP1 – a licence is required before manufacture and must cover all copies made.
AP2 – this is a blanket licence where royalties are paid quarterly in arrears covering copies shipped from distributors and retailers.
If you plan to press under 3k units, the most common Audio Product License type is an AP2.
Audio Product License fees are payable by the record label manufacturing and commercially releasing physical product and are calculated at 8.5% of the Published Dealer Price (PDP). If the PDP is unavailable, the license is calculated at 6.5% of the Retail Price multiplied by the number of copies to be pressed.
How can I apply for an AP2 License?
The MCPS will send an invoice to you within 10 days of receiving your Audio Product License application. Your invoice must be paid within 28 days of issue and before any manufacturing begins.
AP2 promotional allowance & exclusions
If you’re planning to manufacture over 500 units, you can opt for a promotional allowance of up to 25%. The maximum number of promo copies allowed under an AP2 agreement is 250.
MCPS songwriter, composer and publisher members have the right to set up an exclusion of their own record company from royalty collection arrangements.