No. 11Financial Terms
Mechanical Royalties
Also called mechanicals, mechanical rights, compulsory licence, controlled composition
Royalties paid to songwriters for each reproduction of their composition, and how labels try to reduce them.
High risk
Controlled composition clauses can cut songwriter income by 25–75% compared to the statutory rate.
- Appears in
- Recording Agreement, Publishing Deal, 360 Deal
- Topic
- Publishing & Composition
- Jurisdiction
- United States
- Reviewed
- July 2026
In plain English
Mechanical royalties are paid to the songwriter (or their publisher) every time a recording of their composition is reproduced, on a CD, download, or stream. The statutory rate in the US is set by the Copyright Royalty Board. Labels often include 'controlled composition clauses' that cut this rate by 25–75% for songs written by the artist.
Why it matters
If you write your own songs, a controlled composition clause means you are paid less than the statutory rate for reproductions of your own work. You pay for being your own songwriter.
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.
- Controlled composition clause caps mechanicals at 75% or less of the statutory rate
- Mechanical cap applies to all tracks on an album regardless of who wrote them
- No mechanical royalties paid on 'free goods' or promotional copies
- Statutory rate locked to rate at time of contract signing rather than rate at time of release
- Label has right to licence compositions at reduced rates to affiliated companies
- No controlled composition clause, full statutory rate paid on all compositions
- Statutory rate updated at time of each release, not locked at signing
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.