What Are Statutory Mechanical Royalty Rates Under Section 115?

The statutory mechanical royalty rates under Section 115 for 2026 are 13.1 cents per song, or 2.52 cents per minute of playing time for longer tracks, whichever is greater, on physical copies and permanent downloads.¹ Interactive streaming services pay on a different scale: 15.3% of service revenue as the headline rate, run through a multi-step formula that also weighs total content costs and applies per-subscriber floors.² Both rate structures come from Section 115 of the Copyright Act, which lets anyone record and distribute a previously released song without the copyright owner’s direct permission, provided they follow the statutory process and pay.³

Physical Copies and Permanent Downloads

The per-unit royalty for CDs, vinyl, and permanent digital downloads adjusts each year for inflation. The base rate from the Phonorecords IV proceeding was 12 cents per song, or 2.31 cents per minute for longer works, with a built-in escalator tied to the Consumer Price Index for All Urban Consumers. For 2026 the formula yields 13.1 cents per song or 2.52 cents per minute, whichever is larger.⁴

The per-minute calculation applies to any track over five minutes, and fractions of a minute round up. A recording running seven minutes and fifteen seconds is billed at eight minutes times 2.52 cents, which comes to 20.16 cents per copy rather than the flat 13.1 cents.

Every physical unit manufactured and distributed triggers the royalty, even units that sit in a warehouse and never sell. Each permanent download sold triggers it too. The obligation attaches at manufacture, not at sale, so labels and independent artists need this cost in the production budget before pressing a single disc.

Interactive Streaming Royalties

Streaming royalties work nothing like the clean per-unit math above. Services like Spotify and Apple Music pay through an “all-in” formula that runs several calculations each month and pays the largest result. The process has three steps, laid out at 37 CFR 385.21.²

Step one compares two figures and takes the greater. The first is the headline percentage of the service’s total revenue: 15.3% for 2026, rising to 15.35% in 2027.² The second is a percentage of the service’s total content costs, meaning the money it pays labels for the right to stream sound recordings. That percentage is 26.2% of total content costs for most offering types, and 24.5% for bundled subscriptions.⁵ The content-cost prong ties songwriter pay to what labels negotiate for themselves: when labels win bigger deals, the songwriter floor rises with them.

Step two subtracts the performance royalties the service already paid to performing rights organizations like ASCAP and BMI for public performance of the same songs. What’s left is the mechanical royalty owed to songwriters and publishers.

Step three applies a per-subscriber floor. If step two comes in below the floor, the service pays the floor instead. The floors vary by offering:

Standalone portable subscriptions: 60 cents per subscriber per month
Bundled subscriptions: 33 cents per active subscriber per month
Non-portable streaming-only subscriptions: 18 cents per subscriber per month
Non-portable mixed subscriptions: 36 cents per subscriber per month
Ad-supported free tiers: no per-subscriber floor

Free ad-supported tiers skip the floor and rely only on the greater-of comparison between the revenue percentage and the content-cost percentage.² Each offering a service provides (paid tier, family plan, free tier) is calculated separately, using only the revenue, costs, and subscribers tied to that offering.

An individual songwriter’s share of the monthly pool depends on that songwriter’s proportion of total plays on the service during the period. A song that accounts for one ten-thousandth of all streams receives one ten-thousandth of the pool. Per-stream payouts therefore move month to month with the service’s revenue, its content costs, and the total volume of plays.

What Section 115 Does Not Cover

The compulsory license has hard limits that catch people who assume it lets them use a song any way they want. It does not cover synchronization, meaning the pairing of music with visual content like film, television, advertisements, or video games. The statute specifically excludes sounds accompanying a motion picture or other audiovisual work from the definition of a digital phonorecord delivery.³ A YouTube video, a podcast with visual elements, or a commercial needs a separate sync license negotiated directly with the copyright owner. There is no compulsory sync license, so the owner can refuse or name any price.

The license also applies only to nondramatic musical works. Operas, musical theater scores, and other compositions that are part of a dramatic work fall outside its scope. And the song must have been previously distributed to the public with the copyright owner’s authorization. Section 115 cannot be used to be the first to release a recording of someone else’s unpublished song.

Getting a Compulsory License

The path depends on whether you’re distributing physical copies or running a digital streaming service.

Physical Formats and Individual Downloads

Anyone pressing CDs, vinyl, or distributing individual downloads outside the blanket license system must serve a Notice of Intent on the copyright owner before making the first copy, or no later than 30 days after making it but before distributing it.³ The notice must identify the licensee’s full legal name and address, the song’s title and authorship, the format being produced, the expected distribution date, and the principal recording artist.⁶

If public Copyright Office records do not identify the copyright owner or their address, you file the Notice of Intent with the Copyright Office instead. The filing fee is $75, with additional charges of $20 per group of up to 10 titles for paper filings or $10 per group of up to 100 titles for online filings.⁷

Missing this step is not something you can fix later. Failing to serve or file the Notice of Intent permanently forecloses the compulsory license for those phonorecords, and without a voluntary license every copy made and distributed becomes an act of infringement.³

Interactive Streaming Services

Digital music providers offering interactive streaming or on-demand downloads use a different path: the blanket license administered by the Mechanical Licensing Collective. Rather than filing individual notices for every song, a qualifying service submits a single notice of license to the MLC specifying the activities it wants covered. Unless the MLC rejects the notice in writing within 30 days, the blanket license takes effect as of the date the notice was sent.⁸ The service then reports usage and pays royalties to the MLC monthly, with reports due 45 calendar days after the end of each reporting period. The MLC, a nonprofit designated by the U.S. Copyright Office under the Music Modernization Act of 2018, has administered this system since January 2021.⁹ Songwriters and publishers register their works in the MLC’s portal to receive payment; unclaimed songs accumulate unpaid royalties.¹⁰

Payment Deadlines, Reporting, and Late Fees

For physical licensees operating under individual compulsory licenses, monthly royalty statements and payments must reach the copyright owner by the 20th of the following month.¹¹ Statements are not informal invoices. The regulations require detailed accounting: number of copies made, number distributed (broken down by sales, returns, and reserves), the per-unit rate applied, and identifying information for each song including title, songwriter names, ISRC codes, and principal recording artist.

Streaming services under the percentage-rate structure must provide a step-by-step accounting of the royalty calculation sufficient for the copyright owner to verify accuracy, along with the number of plays or other payable units for each sound recording.¹¹ Every statement, in either format, must be certified by a named individual who attests to the accuracy of the data and the adequacy of the licensee’s internal controls.

Late payments carry interest at 1.5% per month (or the highest lawful rate, whichever is lower), accruing from the original due date until the copyright owner or the MLC receives payment.¹² That’s effectively 18% annualized, and it compounds quickly on large catalogs. The late fee amount must also be itemized in the monthly statement.

How Rates Get Set and When They Change

None of these rates are permanent. The Copyright Royalty Board, a panel of three judges within the Library of Congress, conducts rate-setting proceedings roughly every five years.¹³ Known as Phonorecords proceedings, they set royalty rates and terms for the upcoming cycle. The current rates come from Phonorecords IV, which covers 2024 through 2028.⁵

Once the judges reach a decision, or the parties settle as they did in Phonorecords IV, the final rates are published in the Federal Register and codified in the Code of Federal Regulations. They carry the force of law for the full five-year cycle. Physical and download rates then receive annual cost-of-living adjustments on top of the base rate, and the streaming headline percentage follows a preset schedule that steps up slightly each year.⁴

What Infringement Costs

Reproducing and distributing a song without a valid compulsory or voluntary license exposes you to copyright infringement liability under 17 U.S.C. 504. A copyright owner can elect statutory damages instead of proving actual losses, and the range is $750 to $30,000 per work as the court sees fit. If the infringement was willful, the ceiling rises to $150,000 per work.¹⁴ On a ten-song album, that’s potential exposure of $1.5 million before attorneys’ fees. The statutory damages framework is what gives the licensing rules real teeth: whether the copyright owner lost any actual revenue is beside the point, because the damages are set by law rather than by proof of harm.

1
Federal Register. Cost of Living Adjustment to Royalty Rates and Terms for Making and Distributing Phonorecords
2
eCFR. 37 CFR 385.21 – Royalty Rates and Calculations
3
Office of the Law Revision Counsel. 17 USC 115 – Scope of Exclusive Rights in Nondramatic Musical Works: Compulsory License for Making and Distributing Phonorecords
4
eCFR. 37 CFR Part 385 Subpart B – Physical Phonorecord Deliveries, Permanent Downloads, and Ringtones
5
Federal Register. Determination of Royalty Rates and Terms for Making and Distributing Phonorecords (Phonorecords IV)
6
eCFR. 37 CFR 201.18 – Notice of Intention to Obtain a Compulsory License for Making and Distributing Phonorecords of Nondramatic Musical Works
7
U.S. Copyright Office. Fees
8
GovInfo. 17 USC 115 – Scope of Exclusive Rights in Nondramatic Musical Works
9
U.S. Copyright Office. Music Modernization Act
10
The Mechanical Licensing Collective. About
11
eCFR. 37 CFR 210.6 – Monthly Statements of Account
12
eCFR. 37 CFR 385.3 – Late Payments
13
Copyright Royalty Board. About the Copyright Royalty Board
14
Office of the Law Revision Counsel. 17 USC 504 – Remedies for Infringement: Damages and Profits