How important are the sales of CDs, vinyl records and downloads to artists, songwriters, composers and record labels?
This question has become a hot topic recently in regard to mechanical royalty rates for CDs, vinyl and downloads in the world’s largest music market, the US, where the rate for the next 5 years is being decided.
Some music industry groups maintain that these uses and revenues are no longer significant, and therefore freezing the mechanical rate at the 9.1 cents US per sale or download for the next five years is OK. That is where the rate has been since January 1st, 2006.
But the 2021 report on global recorded music revenues shown above (data from IFPI representing recording labels internationally) paints a very different picture.
The report shows that CDs, vinyl and downloads combined, still make up over 25% of total revenues, a significant share in absolute terms, and vital to the sustainability of many music creators. After all, a single physical sale can earn a creator the same amount as hundreds, or even thousands of digital streams.
A coalition of music creator groups, including MCNA and Fair Trade Music are currently advocating for an equitable increase in mechanical rates to at least reflect the rise in the cost of living over the last fourteen years, and to do so going forward for the proposed term.