After an 18-month legal battle between copyright holders and the companies involved in distributing / transmitting digital content, the UK record companies have finally agreed on an 8% royalty payment to artists for music sold online through music services and over the air to wireless mobile devices, excluding Ringtones.
According to an MCPS spokesman, organisations representing composers tried seeking a 12% share, but in the end an 8% share over a three-year agreement was accepted to help further improve digital music sales sold within the United Kingdom. The BPI originally complained about the 12% share request as they claim it is unreasonable and unsustainable, not to mention being double that of the royalty rate for music sold on CD. For music sold at a discount, this agreement requires a minimum payment of £0.04 per song to the artist, which is crucial according to the MCPS spokesman. Thanks to GristyMcFisty for letting us know about this news:
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The three-year agreement covers music sold in the United Kingdom. To accommodate discounted digital music, the agreement ensures a minimum payment to an artist of £.04 (US$.07). Further info can be read on this article on The Register. |
As online distribution does not cost the music industry anything on disc replication, jewel cases, printing out the CD inlets, not to mention no warehousing, retail shop/staff or physical transport costs, the music industry effectively gets a bigger chunk out of music download purchases than they do with CDs sold. In my opinion, with the huge cost saving the music industry makes, the artists should benefit from it also. The low cost online distribution can already be clearly seen with AllOfMP3 and the other Russian music services that the music industry are trying to shutdown, since if they were not making a decent profit from this, then obviously they would have disappeared long ago.
Source: Network World
