The Copyright Royalty Board (CRB) released a ruling to increase mechanical royalties for songwriters by 32 percent, from 9.1 cents to 12 cents per track in the form of physical products (CDs, vinyl, cassettes) downloads (streaming, downloads), ringtones, and music bundles.
Though the CRB still needs to approve the proposed new rate, major label members of the Recording Industry Association of America (RIAA), members of the National Music Publishers Association (NMPA), the Nashville Songwriters Association International, Sony Music Entertainment, Universal Music Group, and Warner Music Group, and qualified copyright owners have also agreed to the rate change, which would take effect in 2023.
“I want to applaud the NMPA and RIAA for working together to act in the best interest of songwriters,” said Harvey Mason Jr, CEO of the Recording Academy, in a statement. “This settlement demonstrates that when the music community acts collaboratively, we can achieve meaningful progress for music creators.”
“After wide consultation with songwriters, publishers, and labels, we are glad to have reached a solution we believe addresses the core concerns of the CRB judges and the individuals and organizations who shared their views during this proceeding,” said Mitch Glazer, CEO, RIAA, in a statement. “As a music community, we are strongest when we come together to forge lasting and sustainable win-win deals.”
Throughout the years, the rate had been disputed and led to deadlocks in a decision as songwriters, or song rights owners, and trade groups were targeting an increase of 15 cents. The 9.1 cent rate was originally set in 2008 at the beginning of the Phono IV, covering royalties for physical and digital formats.
“This new settlement gives songwriters a 32 percent 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,” said David Israelite, CEO at the National Music Publishers Association. “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”.
The proposed rate approval would mark a new milestone for songwriters and publishers, who have argued that song creators are rarely compensated fairly for their contributions to the recorded work. Music streaming is still the most dominant format for music, with $12 billion in revenue in 2021, while vinyl sales have continued to see an uptick and have grown into a billion-dollar business.
“This settlement is a meaningful win for songwriters who will see a [nearly] 33 percent jump in royalties for physical music sales and downloads starting in 2023 while locking in future increases to keep up with inflation for the life of the deal,” said the Artists Rights Alliance. “We are so grateful to the many grassroots songwriter advocates who refused to accept a status quo settlement and kept banging on the door of the CRB until they were heard.”
Here is what others within the industry have to say about the proposed increase in royalties:
“SONA enthusiastically supports the proposed phonorecords IV subpart B settlement, which controls how much songwriters and publishers are paid for digital permanent downloads, vinyl, and 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.” —Michelle Lewis, Executive Director at Songwriters Of North America:
“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.” — Bart Herbison, Executive Director at Nashville Songwriters Association International
“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.” —Association Of Independent Music Publishers
“The Ivors Academy of UK songwriters and composers welcomes the news that the value of songwriting and publishing rights are beginning to be better recognized. This is an important settlement and indicates the necessary direction of travel.” – Graham Davies, Chief Executive at the Ivors Academy
“This unprecedented rate increase for vinyl, CDs, and downloads will have a significant impact on our industry and hopefully points to potentially higher rates for streaming from the CRB. We appreciate the efforts to come to this agreement and thank NMPA for working on behalf of songwriters and publishers.” — Brittain Ashford, Executive Director at the Music Publishers Association Of The United States:
“Music Artists Coalition applauds and endorses the proposed CRB settlement which gives songwriters a much-deserved raise on physical sales and downloads. The songwriting community has successfully advocated for this rate adjustment and will continue to fight for an increase where it really matters – streaming. Finally some good news for music creators!” —Susan Genco, Board Member at the Music Artists Coalition:
“BMAC supports the proposed phonorecords IV subpart B settlement. Our organization applauds the negotiators for proposing to increase payment for artists by 33%, and we are particularly happy to see the acknowledgments of cost of living adjustments for songwriters. As we recognize there’s still much more to be done, we must acknowledge each step made in the right direction towards equality for the songwriter.” —Prophet, Co-Founder/Co-Chair of the Black Music Action Coalition:
“We are very pleased with the 32% increase included in the Subpart B settlement negotiated by the NMPA. Songwriters are in great need of better rates that more fully reflect their contributions. We hope that the CRB will recognize this in the larger streaming fight happening this year and that this bodes well for things to come.” —Don Cason, CEO of the Church Music Publishers Association
“This new settlement is a massive step forward for all composers and songwriters and will be of great benefit to many thousands of production music creators whose also works are offered for sale to the public through CDs, vinyl, and digital platforms. We thank the NMPA for negotiating a 32% raise and continuing to fight for higher, fairer streaming rates in the CRB this fall.” —Adam Taylor, Chairman at the Production Music Association
“With the sale of vinyl and CDs continuing to rise, songwriters getting a royalty increase shows that labels are beginning to see that we deserve better rates. We hope that with the impending CRB trial, all parties will try to work together so that songwriters can get closer to having a livable wage.” —Tiffany Red, Founder and Executive Director of The 100 Percenters