2025 Update:
For all releases after January 1, 2025, the Copyright Royalty Board (CRB) has confirmed an increase in the "per unit" statutory mechanical royalty rate for physical media and digital downloads from 12.4 cents / 2.38 cents per minute (or fraction thereof) to 12.7 cents / 2.45 cents per minute (or fraction thereof).
How Royalty Rates Are Calculated
Royalty rate |
x |
Quantity |
CDs, vinyl, tapes: $0.124 | Physical product: Quantity made | |
Digital downloads: $0.124 | Digital releases: Estimated upfront | |
Ringtones: $0.24 |
Rates for CDs, downloads and all other physical releases are a little higher for songs over five minutes.
Statutory Royalty Rate - How Royalty Rates Are Determined:
In the United States, the statutory mechanical royalty rate used in compulsory mechanical licensing (AKA Cover Song Licensing) is determined by the Copyright Royalty Board (CRB).
Rulings on royalty rates are segmented into periods of five years, and we are currently in "Phonorecords IV" which is a period covering from January 1, 2023 to December 31, 2027. For this period, the CRB has ruled to increase royalty rates with the cost of living each year. They review the Consumer Price Index for all urban consumers in the United States, calculate the appropriate increase to the royalty rate, and report the new royalty rate in the Federal Register.
5:00 or Less |
5:01 or More |
12.4 cents for songs five minutes or less |
2.38 cents per minute (or fraction thereof) over 5 minutes |
Example: |
Example: |
0:35 = $0.124 |
5:01 to 6:00 = $0.1428 (6 x $0.0238) |
2:35 = $0.124 |
6:01 to 7:00 = $0.1666 (7 x $0.0238) |
4:55 = $0.124 |
7:01 to 8:00 = $0.1904 (8 x $0.0238) |
5:00 = $0.124 |
8:01 to 9:00 = $0.2142 (9 x $0.0238) |
Sources:
Code of Federal Regulations, Title 37, Section 385
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