No. 12Financial Terms

Controlled Composition Clause

Also called controlled composition, controlled compositions, three-quarter rate, mechanical cap, frozen mechanicals

A recording-contract term that lets the label pay less than the full statutory mechanical rate on songs the artist writes or controls.

High risk

It cuts the artist's mechanical income on their own songs for the whole deal, and the cap and a frozen rate can cut it further.

Appears in
Recording Agreement, Multi-Album Deal, 360 Deal
Topic
Publishing & Composition
Jurisdiction
United States
Reviewed
October 2026

In plain English

Every time a song is reproduced on a physical copy or a download, its owner is owed a mechanical royalty at the statutory rate. In a controlled composition clause, the artist agrees that the label will pay a reduced rate, commonly three-quarters of the statutory rate, on every song the artist writes, co-writes or controls the publishing of. It usually adds a ceiling, so the label pays mechanicals on no more than about ten songs per album, and it often fixes the rate at a point in time instead of letting it rise with the statutory rate. Most streaming mechanicals are paid by the streaming service rather than the label, so the clause matters most for physical copies and downloads, but a broadly drafted one can reach further.

Why it matters

The clause moves money from the songwriter to the label without ever appearing in the royalty rate. An artist who writes their own songs is paid less for the same song than an outside writer would be, and on a ten-song album at the three-quarter rate that is the same as leaving two and a half songs unpaid on every copy. When outside songs or extra tracks push total mechanicals past the cap, the label can deduct the excess from the artist's record royalties.

Where it can land

The same clause is drafted three ways. These are the positions we see, worst first, so you can tell at a glance which one is in front of you.

Off marketPush back
  • Rate set below three-quarters of the statutory rate
  • Rate frozen at the date of signing, so later statutory increases never reach the artist
  • A cap on total mechanicals per album that does not grow with the number of tracks
  • Excess mechanicals on outside songs deducted from the artist's record royalties
  • Wording that reaches co-writers who never signed the agreement
StandardWorth negotiating
  • Three-quarter rate with a ten-song cap, which is where labels usually open
  • Rate fixed at first release or delivery instead of following the statutory rate for each sale
  • A definition of covered uses wide enough to reach more than physical copies and downloads
Artist-friendlyWhat fair looks like
  • Full statutory rate on every song, with no reduction
  • Rate follows the statutory rate in force when each copy is distributed
  • Outside songs paid in full by the label, with nothing deducted from the artist's record royalties

The language

The drafting language and the negotiation moves for this clause are part of the workspace.

You have read what the clause means and where the risk sits. The rest is the side-by-side of how it reads when it is against you and when it is not, plus the specific moves that get it there.

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Sources

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