An agreement was reached by various music business trade organizations on Thursday (May 5) to increase the mechanical rate for physical and download sales to 12 cents per song. If agreed to by the Copyright Royalty Board (CRB), the rate will increase from the 9.1 cent rate per track that has been in place since 2006.
The settlement was reached between the Recording Industry Association of America (RIAA)—who represents the interest of Universal Music Group, Sony Music Entertainment and Warner Music Group—with National Music Publishers’ Association and the Nashville Songwriters International Association.
This news breaks as the CRB is currently in the midst of proceedings that will set mechanical rates for 2023-2027.
According to NMPA President & CEO, David Israelite, “This new settlement gives songwriters a 32% raise on sales of vinyl, CDs and downloads—raising the rate from 9.1 cents to 12 cents—and critically also includes a yearly cost of living adjustment to address inflation. This extremely positive result is due in large part to the creators who made their voices heard in the CRB process. With this settlement filed, we clear the way to focus solely and tirelessly on raising streaming rates. As we battle the biggest companies in the world, who are pushing for the lowest royalty rates in history, songwriters and their advocates stand more united than ever.”
NSAI Executive Director, Bart Herbison, adds, “We want to thank the CRB for signaling an opportunity for an increase on physical rates. The 32% increase on CDs, Vinyl and downloads is welcome and the fact that the cost of living adjustment is built in helps us maintain increases in the future.”
Other trade organizations have voiced their approval of the settlement.
Harvey Mason jr., CEO of the Recording Academy, says, “I want to applaud the NMPA and RIAA for working together to act in the best interest of songwriters. This settlement demonstrates that when the music community acts collaboratively, we can achieve meaningful progress for music creators.”
In a joint statement, the Association of Independent Music Publishers offers, “The AIMP fully endorses the proposed CRB Subpart B settlement, which would increase the mechanical rate for physical sales and digital downloads from 9.1 cents to 12 cents. This is a step in the right direction and will be a significant boon for the independent music publishing community. Moving forward, nearly all independent publishers will tell you that the future of the music business is in streaming, and we applaud the continued efforts of the NMPA to fight for better streaming rates for all independent music publishers and songwriters.”
Michelle Lewis, Executive Director, Songwriters of North America, shares, “SONA enthusiastically supports the proposed phonorecords IV Subpart B settlement, which controls how much songwriters and publishers are paid for Digital Permanent Downloads, Vinyl & CD sales. Big or small, all songwriters should always have a voice in the decisions that govern and affect our livelihood. We are grateful that our collective voice has been heard. This is a long overdue step in correcting the low rates historically paid to songwriters and it’s about time a song’s inherent value is properly recognized.”