BIEM [Bureau International des Sociétés gérant les droits d'enregistrement et de reproduction mécanique] is an international organisation representing mechanical rights societies.
Mechanical rights societies exist in most countries. They license the reproduction of songs (including in musical, literary and dramatic works). Their members are composers, authors and publishers, and their clients are record companies, production companies, and other users of recorded music. They also license the mechanical aspects of online music exploitation including streaming and downloads.
Every time a CD or LP containing protected musical works is manufactured, the producers require a licence from the owner of the works and they must pay royalties for each copy they manufacture or sell.
The term "mechanical rights" dates back to the time when all reproductions of music were carried out by a mechanical process. Even though nowadays reproductions are carried out in a variety of electronic and digital ways, the term "mechanicals" has become enshrined into industry jargon.
The BIEM/IFPI Standard Contract
BIEM negotiates a standard agreement with representatives of the International Federation of the Phonographic Industry (IFPI), fixing the conditions for the use of the repertoire of Societies. The standard agreement is applied by member societies to the extent that there is no compulsory licence or statutory licence in their territory.
The royalty rate agreed between BIEM and IFPI for mechanical reproduction rights is 11% on the Published Price to Dealers (PPD - the highest price charged by a record producer to a retailer selling directly to consumers) and concerns physical audio products only. Two deductions are applied on the gross royalty rate: 12% for rebates and discounts, and 10% for packaging costs. This results in an effective rate of 8.712% of PPD. Rates for audiovisual use of protected works are negotiated on a territory-by-territory basis, as are rates for Internet (streaming, downloading, etc.) and other usages.