A mechanical royalty is paid on a physical (or digital) copy of a recorded song. The term "mechanical royalty" comes from the days when records were made "mechanically," which may help you remember the definition. A mechanical royalty is paid by record labels to songwriters for the albums they press featuring the songwriters' material. Mechanicals sometimes are paid on all of the albums a label presses, and sometimes they are paid on all of the albums that are pressed and distributed. In that case, a label doesn't have to pay on what it doesn't sell.

The rate at which mechanicals are paid is negotiable and varies from country to country, but there is usually a minimum rate that has to be met.