Music Download Royalties – Deal Nearly Done

It looks as if the fight between Artist’s and Music Distributors is coming to a close on the eve of entering a costly court battle. The joint announcement today between the MCPS-PRS alliance, BPI, Apple, o2, Vodafone, T-Mobile and Orange signifies a final settlement is close.

Under terms of the deal, Apple Computer Inc. and four mobile operators will pay 8 percent of gross revenue, excluding VAT, for all music sold digitally excluding ringtones. A lower 6.5 percent rate was agreed for non-on-demand services such as streaming…
Also included in the deal is the agreement of a minimum price rate which ensures the music creators would still receive a rate, even if the price of music drops significantly…
Jamieson and Adam Singer, the Alliance's outgoing Chief Executive, told Reuters there were still some small unresolved issues regarding the definition of revenue and these would be examined at a later date in November.

It is interesting that only Apple is represented from the online world: although Apple claim to have a 80% market share, I would have other outlets such as HMV, Virgin and Napster would be happy to put the case behind them. For each 79p Apple download the artists will get 5.38p.

Surprisingly from the mobile world, H3G UK, are not part of the deal: they are the people who are bundling “free downloads” as part of their service and presumably would have to part a minimum price going forward. H3G UK claim to be the biggest download service in the UK mobile space. On a Vodafone 99p full track download, the artists will earn 6.74p, who knows for the H3G UK bundled type approach.