BRITAIN’S leading online music services have taken an alliance representing singers, composers and publishers to the Copyright Tribunal after the two groups failed to agree licence terms for song downloads despite three years of negotiation.
Seven online services, including Apple iTunes, Napster and Yahoo!, and the British Phonograghic Industry (BPI) want the tribunal to mediate in discussions with the Mechanical Copyright Protection Society (MCPS), which represents 44,000 songwriters, music publishers and composers, and the Performing Rights Society (PRS), which collects licence fees for the public performance and broadcast of musical works.
The BPI and the MCPS-PRS alliance have been at loggerheads over how much the alliance’s members should be paid for allowing their works to be downloaded from music websites.
Musicians and music publishers are paid 6.5 per cent of the retail price of CDs and other physical music products, while broadcast radio rates range from 3 per cent to 5.25 per cent of net advertising revenues.
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But the MCPS argued that its members should receive 12 per cent of the price of music downloads because the sale prices were lower and online music service providers had lower overheads.
Although insiders said that the alliance would have been willing to accept 8 per cent, the BPI and online providers opted to take the argument to the Copyright Tribunal, which is responsible for ensuring that terms demanded by licensing bodies for the use of copyright works are reasonable.
Sources close to the BPI said that the alliance had refused to move on its demands, causing a stalemate. They said that music providers had spent huge sums developing their services.
Adam Singer, group chief executive of the alliance, said that the BPI’s call for mediation was disappointing.
“This tribunal reference does tremendous damage to the industry as a whole, not least in the eyes of government,” Mr Singer said. “For a creative industry this demonstrates a complete lack of imagination.”
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Geoff Taylor, general counsel for the BPI, described the alliance’s demands as “unreasonable and unsustainable”. The 8 per cent offer had been a just a “temporary discount”, he said.
Mr Taylor said: “The alliance’s tariff threatens to seriously harm the development of the legal online and mobile music markets”.
It is not yet known how long the tribunal’s mediation will take.