In the case of CSC Media Group Limited v Video Performance Limited, the Copyright Tribunal has, for the first time, considered the royalty rate payable for broadcasting music videos.
CSC, which runs seven music video channels, disputed the 20% headline royalty rate and the £700,000 advance demanded by VPL to broadcast its repertoire on CSC’s channels.
The Copyright Tribunal considered that although music video was clearly worth more than commercial radio as a licensable commodity, VPL could not justify demanding a royalty rate of 4 times the maximum payable for commercial radio. Taking into account:
- Other music video licences;
- The decline in advertising in music video channels due to increased internet usage;
- The promotional effect of music videos; and
- CSC’s profitability
the Tribunal decided that a reasonable royalty rate would be 12.5% of CSC’s gross revenue subject to the deduction of advertising and other costs. It also decided that 30% of the anticipated royalty should be paid in advance.