The Stage

Songwriters could see download income halved in legal showdown

Published Tuesday 6 December 2005 at 13:35 by Nuala Calvi

Songwriters and composers face losing 50% of their income from music downloads if a landmark tribunal case being brought by record companies, online music providers and mobile phone networks is successful.

A consortium worth $600 billion, including Apple iTunes, Napster, EMI, Sony BMG, O2 and Orange, is taking not-for-profit royalties collection agency the Music Alliance - formerly the MCPS-PRS alliance - to the tribunal to try to reduce the amount songwriters earn from a 79p download from 5p to 2.5p.

The MA, which represents 44,000 songwriters and composers, responded this month with a counter-claim calling for an increase in royalties to between 7p and 9p per download, which it says reflects the savings made by record companies by online distribution. It claims companies pocket more than 50p for the same 79p download.

The tribunal, which will be held next year, is expected to cost as much as £12 million. Online royalties currently amount to just £1 million a year, although the market is expected to more than double over the next 12 months and eventually overtake offline sales.

MA chief executive Adam Singer said: “We have been taken to the tribunal, so we have no choice but to defend ourselves - remembering that the money we have to spend to defend is that earned by our members. But reducing our members’ rights to half of what they were is not something we can let go. We need to make sure they get the right value for their music.

“In the online world, where there are no manufacturing or distribution costs, the estimate is that, from a download, the record companies make around 40p or 50p. We don’t think it’s unreasonable that composers should earn 7p to 9p. It’s about what they’d expect to receive in the offline world.”

The MA began issuing temporary online licences in 2000 but these were replaced in 2002 with the Joint Online Licence, which has provided the framework for companies such as Apple iTunes to sell music downloads legitimately in the UK. It agreed a 12% share for composers and songwriters, to be temporarily discounted to 8% to help fund the growth of the market. The MA now wants to enforce the full 12% but the BPI claims this means members would be getting almost twice the share from a download as from a CD sale, for which they receive 6.5%.

BPI chairman Peter Jamieson said: “The Alliance’s attempt to nearly double song writing royalties from 6.5% to 12% is as unrealistic today as it has always been. Raising royalties in the middle of the tribunal process is provocative and divisive. Songwriters have rights, but so do performers and the companies who invest in them.”

Meanwhile, the Music Managers Forum, the trade body for managers of music acts, said the BPI claim was part of an ongoing attack on artists’ incomes.

An MMF spokesman said: “This is a battle between the suits and the talent, and we are on the side of the talent. It’s the talent which creates the wealth in the first place - performers who are often writers. The music industry hasn’t handled the online market very well, and now they’ve got into bed with the online providers and are attempting to squeeze the income of the artists.”