The company that operates music telly channels Chart Show TV, The Vault and NME TV has scored a victory at the Copyright Tribunal which will see the broadcaster's royalty obligations cut quite considerably.
CSC Media Group licences the music videos it plays via VPL, the video-focused sister organisation to recording rights collecting society PPL. VPL's deal with CSC is based on a percentage of gross revenue. The collecting society had been demanding a 20% cut of the cash, a figure which CSC argued was "unreasonably high". After negotiations failed to reach an agreement CSC took the issue to Tribunal, the statutory body that has the right to rule on royalty disputes relating to compulsory blanket licences.
CSC's legal team presented the tried and tested (and some at the labels might argue, somewhat dated) argument to the Tribunal that record companies received a promotional benefit from having their videos played on their channels. That promotional benefit, CSC argued, had not been taken into consideration by VPL before deciding on the revenue cut it demanded.
The telly firm ultimately won the argument, persuading the Tribunal to set a royalty rate of 12.5% of gross revenue, more than the 8% the broadcaster was hoping for, but a lot less than the 20% VPL had been demanding.
Commenting on the Tribunal ruling, one of the legal men involved in CSC's case, Kevin Bays, told Music Week: "This case once again raised the issue of the promotional benefit received from the broadcast of copyright material. There is no doubt that this must be taken into account in fixing a reasonable royalty for the use of this material".
A VPL spokesman said: "This is a very disappointing result for our members who invest a great deal of time and money in creating this valuable repertoire, albeit the Tribunal did not go as far as awarding the 8% that was being sought by CSC Media Group Ltd. We fundamentally disagree with a number of the key conclusions that led the Tribunal to make its decision".
While collecting societies do, as a general rule, ask, by default, for more money than they are probably due (you might argue that's their job), the promotional value argument, used by MTV for years to pay nothing to the record companies, is an interesting one. There is an argument that the plethora of rolling music channels that appeared in the late nineties were as much to blame for a slump in record sales as P2P file-sharing, putting, as they did, music on tap long before the YouTube revolution.