CANNES — A battle to determine the future of the distribution of record royalties is underway at the MIDEM music market this week, with the British royalties collection society MCPS at odds with its continental counterparts.
At the center of the dispute, and a key issue under negotiation at the market, is an unusual direct distribution deal between MCPS and music industry giant Polygram.
MCPS and Polygram agreed on a 6% commission rate for direct distribution late last year, which is substantially lower than the German collection society GEMA’s conventional collection rate of 8% or 7.8% for France’s SDRM.
Royalties are normally collected by a national collection society for records in a given territory and then distributed to other societies elsewhere. Direct distribution bypasses a collection society’s sister societies.
In retaliation, both GEMA and SDRM terminated their reciprocal distribution arrangements with MCPS effective Dec. 31, 1996. The Netherlands’ STEMRA and Italy’s SIAE have served notice that they intend to follow suit.
It is understood, however, that GEMA, SDRM and STEMRA have offered to reduce society commissions to 6.5% within two years.