U.K. authors and publishers are challenging record companies to declare the details of the revenues they obtain from legal downloads.
The proposal came in a legal Answer the Mechanical-Copyright Protection Society-Performing Right Society Alliance submitted today (Dec. 2) to the U.K. Copyright Tribunal. The document is a formal response to labels body the British Phonographic Industry’s June 29 referral to the Tribunal of its proposal to reduce the amount paid for composer and author online music rights to between 3.33% and 4.33% of gross retail revenues.
The BPI was joined in its action by seven leading online music platforms, including iTunes, Napster and AOL (U.K.).
The MCPS-PRS Alliance’s online tariff proposals have been in place since 2002. The tariff sets the rate for online usage of music on the Internet and on wireless devices at a rate of 12% of gross retail revenues. This rate is currently subject to a temporary discount to 8%.
In its Dec. 2 Answer, the MCPS-PRS Alliance made two proposals. One was that the rate should stay at 12%. In a statement, the Alliance claimed its research indicates this figure is “realistic, fair and easily supported by the current business economics.”
According to MCPS-PRS, authors currently earn around £0.05 ($0.09) from the sale of a single download at the 8% rate. The BPI proposals would reduce that to £0.025 ($0.045). The authors’ bodies also claim that labels’ share of the same sale currently equals between £0.40 ($0.69) and £0.50 ($0.86).
The second proposal by the Alliance is a demand for “full disclosure of the terms upon which BPI companies are licensing providers of online services for the use of sound recordings.” MCPS-PRS says that it reserves the right to “review and revise” its own online pricing in the light of this information being provided.
In a statement, MCPS-PRS Alliance CEO Adam Singer said: “We believe that this dynamic digital market should not be stultified in the aspic of analog thought; we should recognize that digital liberates margin and why writers should share in the new wealth that modern record companies will be able to create.”
The BPI and the online companies have until Feb. 2, 2006 to submit to the Copyright Tribunal their replies to the MCPS-PRS Alliance document. BPI representatives could not be reached for comment.