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Online Music Royalty Rate Set

September 29, 2006|From Bloomberg News

Apple Computer Inc., Sony Corp. and other digital music providers Thursday settled a dispute with songwriters over the royalties collected on online music sales in Britain.

The providers, together with four mobile-phone operators and the British Phonographic Industry, a record label trade group, agreed to a royalty rate of 8% of gross revenue on digital sales, minus value-added tax. That's less than the maximum 12% first proposed by a group representing more than 40,000 music creators and publishers in Britain.

"I'm delighted that record companies, music publishers and some key distributors have found a way through the complex issues associated with the British music industry's transition to digital," said Eric Nicoli, chairman of EMI Group. "This new agreement will allow us all to concentrate our management and financial resources on building the digital music business."

The dispute was scheduled to come before a copyright tribunal in London this week. The settlement will head off most of that hearing, with some unresolved issues still to be determined.

The 8% rate will be subject to minimum royalties and doesn't cover ring-tone downloads. The accord also imposes a 6.5% rate for so-called "non-on-demand services," such as Internet radio.

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