2026 Royalty Rate Adjustment for Sound Recordings by New Subscription Services and Ephemeral Recordings
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The Copyright Royalty Judges (CRJ) have issued a CPI-U (Consumer Price Index for All Urban Consumers) based inflation adjustment to the royalty rates applicable to digital performances of sound recordings by new subscription services for the year 2026. This adjustment is a routine annual recalibration rather than a fundamental policy change, ensuring that royalty payments keep pace with inflation. The adjustment also covers the making of ephemeral recordings — temporary copies made by a service in the course of transmitting sound recordings — which are a technical necessity for streaming and digital distribution. These ephemeral copies require their own license under copyright law, and their rates are similarly indexed to CPI-U. New subscription services, defined as digital music services that launched after a specific regulatory threshold and operate on a subscription model, are subject to these adjusted rates beginning in 2026. Rights holders, including record labels and artists whose works are distributed through these platforms, will receive royalties at the newly adjusted rates. This rule does not introduce new licensing categories or alter the underlying rate structure established in prior CRJ proceedings; it is solely a mechanical CPI-U-driven upward adjustment to maintain the real value of royalties paid to copyright owners.
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Key Changes
- Royalty rates for digital performances of sound recordings by new subscription services are adjusted upward for 2026 based on CPI-U inflation figures
- Ephemeral recording license rates — covering temporary copies made during digital transmission — are similarly adjusted for 2026 using CPI-U
- Adjustment is effective for the 2026 calendar year; new subscription services must apply updated rates immediately upon enactment
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Obligations
What this law requires
New subscription services must pay adjusted royalty rates for digital performances of sound recordings effective January 1, 2026, calculated using the CPI-U adjustment factor announced by the Copyright Royalty Judges
New subscription services must obtain and maintain a license for the making of ephemeral recordings (temporary copies made during transmission of sound recordings) and pay the adjusted CPI-U-indexed royalty rates for such ephemeral copies
New subscription services must remit royalty payments to rights holders at the newly adjusted 2026 rates rather than the previous year's rates
Services must calculate the adjusted royalty rates using the CPI-U (Consumer Price Index for All Urban Consumers) figures as specified by the Copyright Royalty Judges for 2026