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Record companies agree on digital royalties

Deal struck after epic legal battle

Recording artists such as the Rolling Stones, Elton John and Paul McCartney will get an 8 percent slice from the sale of their music sold through online services and mobile networks in the UK under a compromise reached last week with content sellers.

The agreement comes after an 18-month legal battle between songwriters and companies selling and transmitting digital content, such as Apple's iTunes Music Store, Napster and British mobile operators such as O2 and T-Mobile.

Organisations representing composers sought a 12 percent cut, said a spokesman for the MCPS (Mechanical-Copyright Protection Society) in London, which manages music licensing for artists. The 8 percent rate was accepted to help further investment and growth in digital music sales, he said.

The three-year agreement covers music sold in the UK. To accommodate discounted digital music, the agreement ensures a minimum payment to an artist of £0.04.

"For us, it was crucial that we got some minimum value written into the licence," the MCPS spokesman said.

The agreement resolves the largest issue the two sides were scheduled to address in the UK Copyright Tribunal last week. However, the tribunal will reconvene in November to define what constitutes gross revenue for content sellers and other small technical issues.

The British Phonographic Industry, a record industry trade organisation, reported UK consumers had downloaded 24.3 million tracks as of July, a figure suggesting the yearly total will easily overtake the previous year's total of 26.4 million songs.

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