UK Music Streaming Royalty Rates Halved

What does it all mean?      27/05/09

Buying Choices
Via PaidContent.co.uk In a move aimed at "stimulating digital music business growth", rather than "re-pricing as the fees were totally unrealistic". PRS (Performing Rights Society) - the royalty collection organization that is responsible for collection of musicians fees for the UK, has cut the cost per on demand music stream from £0.0022 to £0.00085 per track from July 1st. This means that if you are streaming to an audience of 1000 listeners at 15 tracks per hour, your royalty costs have reduced to £12.75 per hour, where they would have been £33 per streaming hour, a reduction of more than 50%. This makes online radio stations and other streaming services such as Spotify a more realistic business possibility, although you still need to factor in your streaming costs and wages (assuming anyone is getting paid). PRS said the move "reflects the changes that have occurred in this part of the digital marketplace since the Copyright Tribunal's 2007 decision". The fees set here and recently enforced, resulted in Youtube pulling a load of official music videos (not the unofficial ones of course) as they felt they couldn't afford additional burden of streaming royalties - a move calculated to force the hand of the PRS and ensure a more reasonable fee structure - which does on the face of it appear to have worked. Its a tricky balance as in this world of free content, it's hard to get anyone to cough up for the penniless musician - its hard enough to actually figure out any way for the newly formed band to make any dosh right now, but this may at least uphold the principle that artists deserve to be paid every time their work is streamed, and actually make more legitimate sites like We7 and YouTube viable. Me personally, I still favour the subscription model where we the users pay a fee per month to access any music we want online. For me the best service so far is Spotify, although I do still feel that £10 ($15/16) per month is on the high side - many people don't spend anywhere near £120 per year on music purchases, but if they halved this fee, more listeners would take up the offer. Of course, the problem is with all of these, what happens when you are not online? How do you listen to your music then, and what devices are supported? It's an issue that still needs to be solved before we get any closer to a solution for digital distribution.

z

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