The US Copyright Royalty Board (CRB) has published a proposed settlement that would freeze the statutory mechanical royalty structure for physical music and permanent downloads through 2032, sparing only annual inflation adjustments. This move directly impacts labels, publishers, and songwriters by extending the current rate framework for seven additional years beyond the existing 2023–2027 Phonorecords IV cycle, effectively delaying the next major rate-setting battle until the late 2030s.
Industry Giants Back Rate Freeze
The settlement was filed by a coalition of major record companies, independent labels, and the industry’s primary publishing and songwriter organizations. Signatories include Sony Music Entertainment, Universal Music Group, the American Association of Independent Music, the National Music Publishers’ Association, the Nashville Songwriters Association International, and the Music Artists Coalition. Under their proposal, the current rates should not be amended except for continuing inflation adjustments tied to the Consumer Price Index. The existing rate structure, which currently sits at 12.4 cents per track or 2.38 cents per minute of playing time whichever is larger, would remain in place through the end of the decade.
This agreement represents the latest installment in the Board’s five-yearly cycle mandated under Section 115 of the US Copyright Act, which governs the royalty owed each time a song is reproduced and distributed from a vinyl pressing to a download. The deal preserves the rate increase to 12 cents per track that was agreed to in 2022 after the Board previously rejected a proposal to freeze the rate at 9.1 cents.
Outsiders and Streaming Disputes Loom
Not every stakeholder in the mechanical rights ecosystem has signed on. The Songwriters Guild of America and certain Nashville songwriter groups are not among the settlement’s signatories. If any of these non-signatories files a formal objection before the deadline, the Board’s judges can decline to adopt the settlement if they find it lacks a reasonable basis for the rates. The Board is currently accepting comments and objections on the proposal, with judges led by interim Chief Copyright Royalty Judge having one month to weigh any objections before deciding on adoption.
Crucially, this proposed settlement does not touch interactive-streaming rates paid by services like Spotify or Apple Music. Those on-demand rates are set separately and remain the site of the industry’s most contentious fights. Songwriters and publishers currently receive a headline rate climbing to 15.1 percent of a service’s US revenue, a framework that allows services to pay lower rates on “bundles” than standalone subscriptions. This provision was heavily utilized by Amazon when it reclassified Premium tiers as bundles of music and audiobooks, a move projected to cost publishers more than $3.1 billion through 2032. While the physical and download deal moves toward finalization, the larger question of what streaming services will pay songwriters from 2028 onward remains entirely unsettled.
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