2025 Mechanical Rates announced by Copyright Royalty Board
The Copyright Royalty Board has revealed the 2025 cost-of-living adjustment for mechanical royalty rates. Here’s how this update impacts music royalties.
2025 Mechanical Rates announced by Copyright Royalty Board
by CHRIS CASTLE via Music Tech Policy
Recall that the statutory mechanical royalty for physical and permanent downloads was adjusted from 9.1¢ to 12¢ in the current 5 year rate period (thanks to the “frozen mechanicals” backlash from many songwriters). In addition, the Judges recognized the devastation of inflation in the US economy and determined that an annual cost of living adjustment to the new 12¢ rate was reasonable to take into account songwriters’ inability to renegotiate their rates for five years under the compulsory license. The record companies agreed and voluntarily included an annual cost of living adjustment.
It must be said that the Judges deserve great credit for rejecting the prior mechanical royalty settlement that would have frozen mechanical rates for another 5 years on top of the 15 the rates had already been frozen. Were it not for the Judge’s assertive action–historic action–songwriters would be stuck in a financial doom loop similar to streaming.
Note that this reasonable “COLA” adjustment only applies to mechanical royalties paid by record companies and not streaming mechanicals paid by the largest corporations in commercial history. There is no reasonable explanation for this arbitrary distinction. The COLA should apply to both, or rather all.
2025 Music Mechanical Rates
This “COLA” is announced in December of each year, thus setting the new contemporary benchmark for the value of the compulsory license at least as applied to physical and downloads. The Judges have announced that the new rates starting January 1 will be 12.7 cents for the minimum statutory rate and 2.45 cents for the per-minute (or “long song”) rate.
The new mechanical royalty rates for 2025, adjusted for cost of living, reflect fairer compensation for songwriters. Kudos to the Judges for their progressive action!