2018 Mechanical Rates (Downloads, CDs, Vinyl and Ringtones)

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By Todd Brabec & Jeffrey Brabec

There is currently a proceeding before the Copyright Royalty Board (the “CRB”) which will determine the mechanical royalty rates for a five (5) year period commencing on January 1, 2018.

The parties involved in the current trial are the National Music Publishers Association (NMPA), the Nashville Songwriters Association (“NSAI”) and the major digital service providers.

Rate issues in the trial relate to the mechanical royalty rates which will be payable for the use of music in inter-active services and a final decision will be made by December 15, 2017.

Notwithstanding the trial, the CRB has published the new rates relating to physical product (CDs, Vinyl, etc.), permanent digital downloads and ringtones which will become effective unless an interested party challenges the rates by appealing to the D.C. Circuit Court by April 27, 2017.

This result was achieved because an agreement was reached by the NMPA, NSAI, UMG Recordings (“UMG”), Warner Music Group (“WMG”) and Sony Music Entertainment (“SME”) to continue the current rates with no changes for five (5) years and this voluntary settlement was adopted by the CRB.

Therefore, the statutory mechanical rates for physical product and digital downloads will remain at 9.1 cents or 1.75 cents per minute for a recording of a composition longer than 5 minutes. Ringtones will also remain at 24 cents.

© 2016 Jeff Brabec, Todd Brabec

This article is based on information contained in the new, revised 7th edition of the book "Music, Money, And Success: The Insider's Guide To Making Money In The Music Business" written by Jeffrey Brabec and Todd Brabec (Published by Schirmer Trade Books/Music Sales).  See also www.musicandmoney.com.