On October 2, 2008, the Copyright Royalty Board announced the first-ever mechanical royalty rate terms for on-demand streams, limited downloads and ringtones.

The new mechanical rates for physical recordings and permanent digital downloads are 9.1 cents for recordings with duration of five minutes or less, and for recordings over 5 minutes, the rate is 1.75 cents per minute, rounded up.

The new mechanical rate for mastertone ringtunes is 24 cents. Monophonic and polyphonic ringtones are not included.

The rates for on-demand streams and limited downloads vary by service offering.

As anticipated, our existing royalty examination procedures for digital services already included the areas of review related to the announced rate terms and calculations. In addition, Royalty Review Council will be updating its royalty accounting software and processes to handle both retroactive and future rates.