CRB Sets 2026 Mechanical Rates, FTC Urged to Review Smaller PRO Practices, and Gene Simmons Pushes Radio Royalty Reform

How The Music Business Works - Issue #41

December 11, 2025

Welcome back to How The Music Business Works! As the year winds down, the industry is anything but quiet. This week brings major shifts across legislation, rights management, and global policy that could redefine how creators are compensated and how their work is used in the digital age.

In the US, artists and rights organizations are pressing Congress for long-awaited reforms, while new scrutiny is being placed on the practices of smaller PROs. At the same time, a fresh lawsuit against Meta highlights ongoing tensions between tech platforms and music rights holders. The Copyright Royalty Board has also released new mechanical rate updates that will shape payouts for physical and download formats in 2026.

And in Europe, policymakers are exploring a sweeping statutory licensing system to address how AI companies train on creative works, an idea with big implications for musicians, publishers, and labels worldwide.

A busy week for the business, with ripple effects that will be felt far into next year.

Here’s everything you need to know.

CRB Confirms 2026 Mechanical Royalty Rate Increase

The Copyright Royalty Board has announced the 2026 cost-of-living adjustment for US mechanical royalties on physical formats and permanent downloads. The rate will rise to 13.1¢ per work (or 2.52¢ per minute, whichever is higher), up from 12.7¢ and 2.45¢ in 2025. These annual increases were established under the Phonorecords IV settlement and apply only to physical and download formats, not streaming, where Spotify’s bundling practices and the MLC’s ongoing lawsuit remain the main battleground. Separately, Web VI negotiations (2026–2030 rates for noninteractive digital services) continue, with SoundExchange and NRBMLC recently proposing a settlement under which EMF (K-LOVE) would pay $7.13M in 2026, increasing 4% annually through 2030.

​Congressman Calls for FTC Investigation Into AllTrack and Pro Music Rights

US Representative Scott Fitzgerald has asked the FTC to investigate whether smaller PROs AllTrack and Pro Music Rights are engaging in unfair or deceptive practices. Fitzgerald argues the societies may be misrepresenting the size and makeup of their repertoires, pressuring businesses into unnecessary licenses. His concerns follow a Copyright Office inquiry highlighting transparency issues and noting that both PROs remain outside ASCAP/BMI’s Songview database. Fitzgerald points to Pro Music Rights’ claim of a 7.4% US market share and AllTrack’s website listings of major artists it doesn’t directly represent. Pro Music Rights CEO Jake Noch has rejected the allegations, insisting the organization complies fully with US law.

Gene Simmons and Michael Huppe Testify Before Congress For American Music Fairness Act

KISS’s Gene Simmons and SoundExchange CEO Michael Huppe testified before the Senate in support of the American Music Fairness Act, which would require AM/FM radio to pay artists when their recordings are played. Simmons emphasized that artists, from Frank Sinatra to Whitney Houston, have “never been paid one cent” for terrestrial radio play, despite the industry earning $14 billion this year. Huppe called the lack of a radio performance right a “glaring loophole,” noting it puts the US alongside countries known for weak property-rights enforcement and costs American artists hundreds of millions in overseas royalties. The bill, first introduced in 2022, continues to move through Congress with renewed support.

Epidemic Sound Files Second Lawsuit Against Meta Over Alleged Music Infringement

Epidemic Sound has filed a new copyright lawsuit against Meta, accusing Facebook, Instagram, and WhatsApp of continuing to use its music without a license. The suit lists 1,000 works, each registered after Epidemic’s first 2022 lawsuit, and seeks up to up to $150,000 per work infringed meaning potential damages could reach $150 million. Epidemic claims Meta has added its tracks to the Audio Library and enabled further unlicensed use through tools like Original Audio and Reels Remix. The filing also alleges that Meta has repeatedly refused Epidemic’s requests for access to a tool called Rights Manager for Music, which the company describes as a copyright management tool that helps rights holders identify, protect and monitor unauthorized use of music content on Meta’s platforms

EU-Commissioned Report Recommends Statutory Licensing for AI Training

A new report for the European Parliament argues that the most balanced way to regulate AI training on copyrighted works is a statutory licensing system, an approach neither AI companies nor rightsholders currently support. The proposal would let AI developers use any copyrighted material for training in exchange for royalties set by an independent authority. Professor Christian Peukert, the report’s author, says this model avoids costly clearance processes, ensures broad data access for AI companies, and guarantees revenue for creators. He also notes challenges, including setting fair rates and administering payments at scale. The recommendation comes as labels, publishers, and creators oppose compulsory licensing, preferring direct deals, while tech companies argue licensing requirements are unworkable.