A Mechanical license gives a record label or other entity the rights to reproduce or re-record a song previously commercially released.
In order for someone to re-produce or re-record a song that has previously been commercially released, you need to obtain a mechanical license from the owner who has rights to the song. An example of this are any artists or musicians who do cover songs of someone’s previously released commercial songs.
So for example every time Michale Buble` does an old Senatra song or Chris Brown remakes a Michal Jackson classic, they need to first pay a mechanical license fee to the record label that owns the rights to those songs, before they can re-record them or use them at performances. All artists or entities can re-record and re-release music previously recorded and released by someone else as long as it’s non-dramatic.
The Mechanical license is a creation of the U.S. Copyright Act and all fees are set by it. The current Statutory Royalty Rates for physical recording and permanent digital downloads is:
9.1 cents per copy for songs 5 minutes or less and 1.75 cents per minute per copy for songs over 5 minutes. The Statutory Royalty Rate for Permanent Digital Downloads is 9.1 cents for recordings five minutes or less and for recordings over 5 minutes it’s 1.75 for each minute rounded up. For Mastertone Ringtunes tones is 24 cents per copy. When I say copy I mean the amount of cd’s you’re going to press with this licensed song.
Collecting royalties , negotiating, and doing the paperwork to issue your mechanical license takes a lot of time and can be confusing so the best thing to do is get a company to represent you and they will handle that stuff for you. The biggest agency in America that represents music publishers in the issuing and collection of musical licenses is The Terry Fox Agency of course there are other agencies that issue and collect license fees for their clients and you would have to see which ones are in your country and which one suits your needs.
If you need more information on how the issuing of music license goes you can always search the website or contact the Agency in your country that provides these services.