The music industry just doesn’t seem to get it…the Mechanical Copyright Protection Society (MCPS) and the Performing Right Society (PRS) in the UK have set the royalties for online and mobile music at 12% of gross revenue — twice the level set for CDs (6.5% of retail price) andbroadcast radio rates (5.25% of net advertising revenues).
The result is that the BPI — which represents more than 300 UK record labels — has joined seven online services (AOL, Apple iTunes, MusicNet, Napster, RealNetworks, Sony Connect and Yahoo!) to take the issue to the copyright tribunal.
Aside from putting online music at a distinct disadvantage to physical sales for no readily apparent reason and therefore hindering the development of the online music market, the BPI and friends claim the level is unfair because “a change in the technical means of delivering music to the consumer does not warrant a sudden increase in royalties for using compositions — particularly since the Alliance and its members, unlike the online music services and record labels, have not had to invest heavily in creating new legal online services and fighting internet piracy”. I assume the record labels part of that investment was “fighting internet piracy” by suing people…
The other factor is that the level is set at 12% of gross revenue without taking into account the nature of the music service offered. So if a 3G service offers streaming music included in their service, for example, they have to pay 12% of the revenues collected for that service despite the fact it would also include other content such as news, videos and games…
Related stories:
–Ringtones Make Sweet Music For Record Label
–ASCAP’s $5 Million Ringtone Bounty
–Mobile Music Royalty Explained
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