updated 06:35 pm EDT, Thu September 28, 2006
UK music royalty agreement
Apple's iTunes and mobile operators including Vodafone on Thursday agreed on royalty rates to pay song writers and music publishers for digital downloads in Britain to partly resolve a dispute, according to Reuters. Under terms of the deal, Apple and four mobile operators will pay 8 percent of gross revenue, excluding VAT, for all music sold digitally excluding ringtones--extending a reduced price agreement that has been in place for four years. Under a previous deal, the law stated that the song writers and publishers must receive 12 percent; however, the royalty had been temporarily reduced to 8 percent based on a mutual agreement. The new agreement also implements a 6.5 percent royalty rate for non-on-demand services such as streaming, according to the report. The deal was announced in a joint statement by the trade group representing record labels, BPI, and MCPS-PRS Alliance, which fixes and collects royalties on behalf of the composers, song writers and music publishers.
"All parties to the settlement welcome this agreement, which will help drive the on-going growth of the legitimate digital music market," the statement said. The agreement also included mobile operators O2, France Telecom's Orange and Deutsche Telecom's T-Mobile.
The publication also reports that the agreement includes a minimum price rate which ensures the music creators would still receive a rate, even if the price of music drops significantly.
"This is a balanced voluntary settlement in which both sides can draw not just comfort from, but excitement that they can go forward and build a business together based on an understanding that will work to the benefit of all," BPI Chairman Peter Jamieson told Reuters.