The US Copyright Royalty Board has published a proposed settlement that would govern mechanical royalty rates for physical music, permanent downloads, ringtones, and music bundles in the United States from 2028 through 2032.
The deal would leave the existing rate structure in place through 2032, save for annual adjustments in line with inflation.
The Board is now accepting comments and objections on the proposal, which are due by August 10, according to a notice in the Federal Register.
Phonorecords V is the latest installment in a five-yearly cycle in which the Board sets the statutory mechanical rate under Section 115 of the US Copyright Act – the royalty owed each time a song is reproduced and distributed, from a vinyl pressing to a download.
The settlement was filed on June 29 by the three major record companies, indie labels, and the industry’s main publisher and songwriter bodies.
They are Sony Music Entertainment, UMG Recordings, and Warner Music Group, together with the American Association of Independent Music (A2IM), the National Music Publishers’ Association (NMPA), the Nashville Songwriters Association International (NSAI), and the Music Artists Coalition (MAC)
Under their proposal, the current rates “should not be amended except for continuing inflation adjustments to the rates for physical phonorecords and permanent downloads,” the parties told the Board.
The 2026 statutory rate is 13.1 cents per track, or 2.52 cents per minute of playing time, whichever is larger – a rate the Board lifts each year in step with the Consumer Price Index.
Not every participant in Phonorecords V is on board.
The Songwriters Guild of America, Word Collections, and Nashville songwriter George Johnson are not among the settlement’s signatories.
If any of them files an objection before the August 10 deadline, the Board can decline to adopt the settlement, provided the judges find it does not offer a reasonable basis for the rates.
The physical and download rate has a contested recent history at the Board.
It held at 9.1 cents per track from 2006, and successive deals between publishers and record companies proposed keeping it there.
But in 2022, the Board rejected a proposed freeze for the 2023-2027 period, with then-Chief Copyright Royalty Judge Suzanne Barnett writing that a static rate held for sixteen years was “unreasonable” in the face of inflation.
The parties then agreed to raise the rate to 12 cents per track with built-in cost-of-living increases – the structure the new settlement would extend into 2028-2032.
The settlement has emerged alongside a separate skirmish over who gets a seat at the Phonorecords V table.
On April 15, four streaming services – Spotify, Amazon, Pandora and Apple, later joined by Google – filed a joint motion asking the Board to deny the petition of Global Music Rights (GMR) to take part.
GMR is the performance-rights organization founded by music executive Irving Azoff.
“GMR is a performing rights organization (‘PRO’) representing songwriters and composers in the licensing of public performance rights,” the services argued in their motion.
“GMR thus lacks the ‘significant interest’ required to participate in this proceeding, which will set rates and terms for a distinct set of rights – mechanical rights under Section 115 of the Copyright Act.”
The services added that no PRO had ever formally taken part in a Phonorecords proceeding, noting that ASCAP and BMI had withdrawn from earlier cases.
The NMPA and NSAI told the Board they took no position on the motion.
GMR subsequently withdrew from the proceeding altogether, the Board confirmed in its Federal Register notice.
The exit is less clean than it looks: the Music Artists Coalition, which Azoff co-founded, is itself among the parties backing the settlement.
For all the maneuvering, the proposed settlement does not touch the interactive-streaming rates paid by services such as Spotify and Apple Music.
Those on-demand rates are set separately, and they are where the NMPA‘s toughest fight now sits.
Under Phonorecords IV, songwriters and publishers are paid a headline rate that climbs to 15.35% of a service’s US revenue by 2027.
That framework also lets services pay a lower rate on “bundles” than on standalone music subscriptions – the provision Spotify invoked in 2024 when it reclassified its Premium tiers as bundles of music and audiobooks.
The NMPA has projected that the move could cost publishers more than USD $3.1 billion through 2032, and has warned that Amazon has since adopted a similar approach.
None of that streaming dispute is resolved by the Subpart B settlement.
If participants cannot agree on the remaining rates, the Board has directed them to file written direct statements by October 5, a step that would set up a possible trial.
Until then, the Board’s judges – led by interim Chief Copyright Royalty Judge Trevor Jefferson – have one month to weigh objections to the physical-and-download deal before deciding whether to adopt it.
The larger question – what Spotify, Apple and Amazon will pay songwriters for streaming from 2028 – remains to be settled.Music Business Worldwide
