Although the music music industry and labels tries now and again to increase the price of online downloadable music, apparently in the UK the BPI (British Phonographic Industry) is trying to block a proposed royalty charge by the MCPS-PRS (Mechanical Copyright Protection Society - Performing Right Society) Alliance. At the moment, the royalty charge for CDs is 6.5% of the retail price and the royalty charge for radio broadcasts is 5.25% of the net revenue from advertising. However, the MCPS-PRS is proposing a hefty royalty charge of 12% for the overall revenue from most downloadable music.
Besides the BPI, several online music services are also challenging the royalty rate, which include AOL, Apple iTunes, MusicNet, Napster, RealNetworks, Sony Connect and Yahoo!. They online royalty rate applies to all online music services and not just downloads, thus threatening the success and progress of online / mobile music services. The Alliance said that they feel sorry about the BPI's decision as it went to the UK Copyright Tribunal, as it could have been avoided. For the time being, the Alliance made a suggestion of 8% royalty charge for online downloads. Quakester2000 used our news submit to submit the following news:
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The BPI - which represents more than 300 UK record labels - has joined seven online services to bring the action. They have taken the Mechanical Copyright Protection Society (MCPS) and the Performing Right Society (PRS) to a copyright tribunal. The MCPS and PRS want to charge more for songs downloaded from the internet than for those on CD. The MCPS-PRS Alliance - who set and collect royalties on behalf of composers, songwriters and publishers - are proposing a tariff of 12% of gross retail revenues on most online music. Currently, royalties on CDs stand at 6.5% of retail price, while broadcast radio rates are up to 5.25% of net advertising revenues. |
In my opinion, it seems rather greedy for the MCPS-PRS to charge such a hefty royalty for online downloads, especially since consumers don't get as high quality of a product as with physical media. Also, online music sales are expensive enough as it is, especially when considering that there is no cost involved for shops & staff (apart from the online store), disc & jewel case inlet costs as well as transport costs to distribute the music to the different shops. Finally, there is no 'Out of Stock' issue to worry about also with online stores.
Feel free to discuss and find out more about online music services on our Music Download, Peer to Peer (P2P) & Legal Issues forum.
Source: BBC News - Entertainment
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