16 July 2007
For immediate release
Online Copyright Tribunal decision
The UK Copyright Tribunal has returned its decision in relation to the rate paid to songwriters and composers when their music is used in online music services.
The Tribunal has endorsed a settlement agreement negotiated in September 2006 between the Music Alliance - representing composers and songwriters - and the majority of the online music industry. The Tribunal concluded that this agreement, freely made between these parties, should be the basis for the template for online licensing in the future.
The Tribunal decision confirms that songwriters, composers and their publishers should receive 8% of gross revenues from online music service providers for on-demand services including downloads and subscription streaming services, 6.5% of revenues for interactive webcasting services and 5.75% for non-interactive webcasting. The concept of minimum royalties for all types of online use has been strongly confirmed, which was a key part of the Music Alliance’s case to protect its members’ rights and revenues.
Steve Porter, Chief Executive of the Music Alliance said: ‘This is a great result for music creators. We are happy that the Tribunal has endorsed our approach to the licensing of music used in online services.
‘The uncertainty has finally been removed and we have a template for the future that recognises and affirms the value of the creative process to the online music business.’
ENDS
CONTACT:
Contact: Dorota Nosowicz/Adrian Crookes
Telephone: 020 7306 4777
Email: press@mcps-prs-alliance.co.uk
Notes to editors
The MCPS-PRS Alliance (the Music Alliance). MCPS and PRS are the not-for-profit UK collecting societies that ensure composers, songwriters and publishers are paid royalties when their music is used: from live performance to TV and radio, CDs to DVDs, downloads, streams and everything in between. Royalties create a future for music by supporting creators while they continue to write. MCPS and PRS are committed to delivering maximum royalties and world-class service. They work together in an operational alliance to get the best value for the music use of composers and songwriters everywhere. www.mcps-prs-alliance.co.uk
Digital royalties in the UK
The royalty rate to composers, songwriters and music publishers when their works are exploited for online and mobile in the UK has been under scrutiny for the last two years.
In June 2005, the MCPS-PRS Alliance was referred to the UK Copyright Tribunal by a consortium of music users. This was made up of: The BPI (representing over 300 record companies), The Digital Service Providers (AOL, Apple iTunes, MusicNet, Napster, RealNetworks, SonyCONNECT and Yahoo), and The Mobile Network Operators (O2, Orange, T-Mobile and Vodafone).
In September 2006, the BPI withdrew from the Tribunal process by signing a settlement agreement with the Alliance which sees composers, songwriters and publishers receiving 8% of gross revenue (excluding VAT) when their music is made available for download, limited download or by on-demand streaming. A rate of 6.5% was negotiated for webcast services. Importantly the concept of minimum royalties was agreed for all services. This ensures that music creators receive proper payment for their work when it is used online in all cases, for example, where music is bundled with other products and services, offered free as an attraction for other products, or as a loss leader.
Four of the Digital Service Providers (iTunes, MusicNet, Napster and SonyCONNECT) and four UK mobile network operators (O2, Orange, T-Mobile and Vodafone) also agreed these rates. The Mobile Network Operators and iTunes sought additional clarity from the Tribunal on two discrete issues relating to how revenue is defined.
Regrettably, the Alliance was not able to reach a settlement with the remaining Digital Service Providers (AOL, Real and Yahoo) who continued with their reference to the Copyright Tribunal.
Between September 2006 and January 2007, the Tribunal sat to hear the case brought by AOL, Real and Yahoo and to determine the remaining issues on the revenue definition brought by iTunes and the four mobile network operators.