Page last updated at 13:22 GMT, Tuesday, 26 May 2009 14:22 UK

New rate for music digital stream

Glastonbury disco stream
All forms of music streaming will pay a lower charge from July 2009

Music collection society PRS has unveiled a new pricing plan it hopes may entice YouTube and Pandora back to the UK market.

From 1 July, firms will have to pay 0.085p for each track streamed, down from the previous rate of 0.22p.

PRS for Music says the new plan will "enable the digital market to grow".

Earlier this year, YouTube started removing premium music videos to UK users after failing to reach a new licensing agreement with the PRS.

Companies wishing to play or stream music over the internet are legally obliged to pay royalties to songwriters and performers. However, many companies said the old rate was prohibitive.

The radio streaming service Pandora ended its UK stream at the start of 2008 and YouTube announced in March 2009 that it was removing all premium music videos to UK users after failing to reach a new licensing agreement with the PRS.

Pandora letter
It remains to be seen if the new rate will entice Pandora back to the UK

The PRS, which distributes royalties to songwriters, collected a record £117 million in the first three months of 2009.

Steve Purdham, head of the music streaming service We7, told BBC News he welcomed the new charges.

"It's brilliant. Not so much the rates but the realisation by the PRS that things have to change in the digital world.

"Till now it's felt like they were not listening," he said.

The PRS's managing director, Andrew Shaw, told the BBC that its hands had been somewhat tied by a previous tribunal ruling.

"You need to understand the background. In 2007 we published the proposed rates and there were a number of services who objected and so it went to the tribunal, who fixed the rates for a two year period.

"That said, we are not a commercial organisation; we're a not-for-profit organisation owned by its members and they control what we do," he said.

"Back then our members were uncertain whether streaming services were viable and had spent millions on a tribunal and, at the time, were not minded to throw it all away."

Reverend Keith Kimber
The PRS hope the new rates will enable digital music to reach a wider audience.

Mr Purdham said it remained to be seen if it would be enough to lure YouTube and Pandora back to the UK market.

"They [the PRS] are getting in touch with the reality of the digital world," he said.

"It's a big step and a good indicator that YouTube and Pandora may come back. The PRS have shown that it is no longer a one sided argument any more."

Mr Shaw said it was now down to firms to respond.

"We've laid our stall out and listened to everyone who would engage with us. We've consulted with the 25 firms that represent 97% of our revenue over the past six months and have been given opinions from many others.

"We need to ensure the music artists are paid for their work, but we also wanted to make sure that the framework was in place to enable the digital market to grow," he said.

YouTube issued a statement that said: "We welcome any efforts to make licensing costs more realistic, but as we're still in discussions with the PRS to agree license terms for YouTube we're unable to comment further."

Print Sponsor

YouTube stands by UK video block
10 Mar 09 |  Technology
Pandora to cut off UK listeners
09 Jan 08 |  Technology
Royalties threaten internet radio
08 Mar 07 |  Technology
US copyright lobby out-of-touch
20 Feb 07 |  Technology

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific