UK record companies agree on digital royalties

Recording artists such as the Rolling Stones, Elton John and Paul McCartney will get 8% of the sale of their music sold through online services and mobile networks in the United Kingdom under a compromise reached on Thursday with content sellers.

The agreement comes after an 18-month legal battle between songwriters and companies selling and transmitting digital content, such as Apple's iTunes Music Store, Napster LLC and British mobile operators such as O2 PLC and T-Mobile UK Ltd.

Organizations representing composers sought a 12% share, said a spokesman for the Mechanical-Copyright Protection Society (MCPS) in London, which manages music licensing for artists. The 8% rate was accepted to help further investment and growth in digital music sales, he said.

The three-year agreement covers music sold in the United Kingdom. To accommodate discounted digital music, the agreement ensures a minimum payment to an artist of £.04 (US$.07).

"For us, it was crucial that we got some minimum value written into the license," the MCPS spokesman said.

The agreement resolves the largest issue the two sides were scheduled to address in the United Kingdom Copyright Tribunal Thursday this week. However, the tribunal will reconvene in November to define what constitutes gross revenue for content sellers and other small technical issues.

The British Phonographic Industry, a record industry trade organization, reported U.K. consumers had downloaded 24.3 million tracks as of July, a figure likely to overtake the previous year's total of 26.4 million songs.

The IDG News Service is a Network World affiliate.