How to calculate mechanicals in IC
Mechanicals Rate Updates!
Per the US Copyright Royalty Board, statutory US mechanical rates on physical sales and permanent downloads will now raise incrementally on an annual basis starting in 2023.
To accommodate, the Mechanicals tool in IC gets updated to include new rates when they are announced, while still allowing you to calculate mechanicals based on previous rates if needed.
To adjust the default rate for your mechanicals run, click Edit Report on the Mechanicals landing page and select the desired Default Rate from the drop-down menu as shown below.
Please note - Default Rates will not override custom rates set at the Track or Release level and custom rates must be manually edited if adjusting for these rate increases.
To enable mechanicals in your catalog, navigate to Account -> Account Settings. Scroll to the bottom of the page, check the "Enable Mechanicals" box, and click "Save".
To enable mechanicals for a release or track:
- Navigate to Catalog -> Manager
- Open the desired release and click Edit
- Check the "Enable Mechanicals" box
To enable mechanicals at the track level only, scroll down and check the "Enable Mechanicals" box for each desired track.
By default, our Mechanicals tool calculates mechanical royalties as per US Copyright Royalty Board definitions - track rates for 2024 are 12.4 cents for tracks less than 5 minutes, or 2.39 cents per minute (rounded up) for tracks longer than 5 minutes. Custom rates can be set at the release and track level to override these rates if needed, and pre-2024 rates can be enabled from the Edit Report menu from the Mechanicals tool landing page.
To calculate and create mechanicals transactions:
- Navigate Royalties -> Mechanicals
- Open the "Paid Timestamp" field, set your desired period, and click Apply
- Click "Create Transactions"
- Assign a paid timestamp to the import
- If needed, add a manufacturing run (this is only for quantity manufactured, not quantity sold. To calculate mechanicals for physical sales, contact Support)
- Click "Create Data Import"
Once the data import is complete, open the Mechanicals Import on the Data Imports page and navigate to Transactions in the top menu bar. From there, you'll see two transactions created for each item for which mechanicals were calculated, an income and an expense:
Transactions automatically get assigned the overall album contract. Change the item contract by clicking on the item name (note Mechanicals Income or Mechanicals Expense) and clicking Edit at the top of the Item summary page. More info on creating a contract in IC is in the Knowledge Base here
If the mechanicals expense is considered an advance rather than a shared expense, edit each expense transaction to a transfer:
- Click the transaction number to open the transaction summary page
- Click the "Edit" button at the top of the page
- Change transaction type from Expense to Transfer in the dropdown menu
- Complete the Payee field (the payee absorbing the mechanicals cost)
- Click "Save"