James Delahunty
1 Jul 2005 10:20
The British Phonographic Industry (BPI) has announced that it is taking MCPS (the Mechanical Copyright Protection Society) to the copyright tribunal over its charging of online music subscriptions and legal downloads. The BPI claims that MCPS is charging too much for music downloads and is supported in this action by Apple's iTunes, AOL, MusicNet, Napster, Real, Sony Connect and Yahoo!. They are all annoyed because the charges set on digital downloads (or "mechanical reproduction") is much higher than charges on CDs.
The charge on downloads is about 50% - 100% higher than the charge of making physical copies of music, such as copies of music on CDs. "The licence that the Alliance is trying to impose for online music is unreasonable and unsustainable. It is charging a royalty rate on a download that is double the rate it charges for a song on a CD. It applies this excessive rate to a whole range of online music services, without taking into account their different characteristics. The Alliance's tariff threatens to seriously harm the development of the legal online and mobile music markets." said Geoff Taylor, general counsel for BPI.
According to the BPI, publishing royalties are set as 6.5% of retail prices and the rates for broadcasting radio ranges from 3% - 5.25% of net advertising revenue. However the rate on music downloads is allegedly 12% of gross retail revenues, but is temporarily set at 8% now. Adam Singer, the new group chief executive of the MCPS-PRS Alliance is unhappy with the BPI's decision.
"This is a disappointing Tribunal reference by the BPI and the digital service providers, and one that could have been avoided. Industry observers must be baffled by record companies taking the publishing divisions of their own companies through a Tribunal procedure - spending millions that neither side can afford. This Tribunal reference does tremendous damage to the Industry as a whole, not least in the eyes of Government. For a creative industry this demonstrates a complete lack of imagination." Singer said.
Source:
The Register