UK Digital Download Dispute Settled

US UK music industry agrees on artist's royalties share 04/10/06

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UK record companies have finally agreed on an 8% royalty payment to artists for music sold online through music services and over the air to wireless mobile devices, excluding Ringtones. This follows an 18 month legal battle between copyright holders and the companies involved in distributing / transmitting digital content.
As there are less overheads for record companies with digital downloads as opposed to CDs, the MCPS and PRS organizations representing composers sought a 12% share (the rate on CDs is 6.5%). The 8% rate was accepted in the end to help further investment and growth in digital music sales.
The three-year agreement covers music sold in the United Kingdom. To accommodate discounted digital music, the agreement ensures a minimum payment to an artist of Â£.04 per song if tracks are discounted.
Here's a press statement put out by the MCPS-PRS Alliance...
Companies representing a substantial majority of the UK digital music market have reached a settlement relating to the royalties paid to composers, songwriters and music publishers for the digital delivery of music (such as full track downloads but not including ringtones) for online and mobile use.
The agreement amounts to a partial settlement of a case which is due to begin at the Copyright Tribunal today (Thursday September 28).
The three-year deal has been agreed between the MCPS-PRS Alliance representing songwriters, composers and music publishers, British recorded music trade association the BPI, iTunes and four UK mobile network operators, O2, Orange, T-Mobile and Vodafone. It sets a rate of 8% of Gross Revenue less VAT to be paid to composers, songwriters and publishers when their music is offered in a digital environment, with a lower rate (6.5%) for non-on-demand services. These rates are subject to minimum royalties.
All parties to the settlement welcome this agreement, which will help drive the on-going growth of the legitimate digital music market. The UK music download market is the biggest in Europe with sales of 34m units so far this year according to the Official UK Charts Company, already more than in the whole of 2005.
The Copyright Tribunal proceedings will continue in respect of issues which remain unresolved between the MCPS-PRS Alliance and the other parties as well as a single issue that remains outstanding for the mobile network operators and iTunes.
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