IFPI Denmark has come out in support of TDC in the Danish telco's clash with collecting society KODA regarding tariffs from TDC's unlimited music service Play.
TDC Play offers broadband and mobile subscribers DRM-enabled unlimited music downloads and streams of more than 6 million tracks as part of their subscription.
However, KODA wants more money to go to publishers and song-writers. TDC's two-year license with KODA, which has 34,500 publisher and songwriter members, expired March 31.
TDC submitted its case to the Copyright License Tribunal on April 7 after the telco and KODA failed to reach accord. The Tribunal, an impartial tribunal set up by the Danish Ministry of Cultural Affairs, acts as mediator in such cases and typically spends around 12 months to make a ruling on remuneration.
Having heard both parties to the case, the Copyright License Tribunal will decide whether IFPI may intervene and be heard in the case.
TDC Play accounts for more than 80% of the Danish digital subscription market, the IFPI said. Customers have downloaded more than 200 million tracks since play was launched on April 1, 2008.
IFPI says it rarely takes a stand on cases involving other parties in the music business, but the TDC-KODA situation is an exception. The labels body cited Spotify's decision not to serve the Danish market, reportedly because of KODA's demands, which affects IFPI's label members who want to license their music to new digital services.
"IFPI works persistently to pave the way for the new business models in the music industry, from which labels and artists will make their living in the future," said IFPI Denmark chairman Henrik Daldorph in a statement. "It is very frustrating that other actors in the industry, by claiming tariffs which far exceed the level known from abroad, make the development of the digital music market come to a halt in Denmark."
Daldorph emphasizes that IFPI members negotiate individually with TDC and that all agreements with member labels have been renewed for two years and are in place until 2012.
"It is most unusual that IFPI interferes in a case involving another organization in the industry with whom we otherwise have an excellent relationship," added Daldorph. "However, one of IFPI's most important tasks is, after all, to develop the market. So we cannot just remain a spectator, when someone attempts to make the development come to a halt - whoever it may be."
KODA said it cannot disclose the terms of the present negotiations with TDC, describing the contract that expired as an experiment.
"We had no clue as to how much TDC customers would download, and we want to ensure fair payment for those we represent," says KODA's press relations manager Birgitte Henriksen.
KODA received a two-year lump sum of 40 million Danish kroner ($7.1 million), according to the Danish Musicians' Union. The Danish organization represents around 125 international companies, as well as domestic rights holders.
KODA recently cut a deal with Nordic subscription service WiMP in Denmark, although terms were not disclosed.