Online music providers agree deal on royalties

Apple and mobile firms agree rate with songwriters and publishers

A joint statement by the BPI and the MCPS-PRS Alliance has today announced a resolution to the dispute over the royalties payable to songwriters and publishers for UK music downloads, on the day the long-running row was due to go to a hearing before the Copyright Tribunal.

Apple’s iTunes and mobile operators including Vodafone, Orange and T-Mobile will now pay 8% of gross revenue, excluding VAT, for all music downloads excluding ringtones. A lower rate of 6.5% will apply to non-on-demand services such as streaming. The Alliance had previously been demanding 12% on behalf of songwriters and publishers, while record companies had offered the 6.5% that presently applies to physical formats. The deal, which lasts for three years, also guarantees a minimum rate of 4p per download for a simple download. 

It is likely that the UK deal will influence negotiations on the issue throughout Europe and in the United States.

“All parties to the settlement welcome this agreement, which will help drive the on-going growth of the legitimate digital music market,” said the joint statement.