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Posted by Robert
Rap News Network
3/24/2004 9:18:13 PM
Casting themselves as a collective David to an American Goliath, British and other European independent record producers threatened on Wednesday to boycott MTV channels to protest a 55 percent cut in royalties paid for music videos.
. In response, MTV said it would reopen negotiations to look for a way of defusing the crisis, which erupted this month after the music broadcaster said it would stop showing videos from companies that refused the reduced royalty payments.
. Unlike in the United States, where MTV does not pay for video clips from independent producers, European independent producers, who account for around 21 percent of the continent's $12 billion music industry, regard royalties for video clips as a significant source of funds to promote often innovative music and little-known musicians.
. But when a four-year deal worth around $3.5 million a year expired in 2002, MTV broke off negotiations with an industry royalty collection company called Video Performance Ltd., or VPL, and offered reduced payments to individual producers, said the Association of Independent Music, the independents' industry body. The new offer was worth an annual $1.6 million, less than half the previous amount, AIM said.
. The dispute affects record producers such as Beggars Banquet, Telstar and Ministry of Sound representing musicians and bands including Travis, Craig Davis, Prodigy, Carla Bruni and The White Stripes.
. In an open letter on Wednesday to MTV Networks Europe - the European subsidiary of MTV, which is owned by Viacom in New York - 288 independent producers called MTV's new terms "totally unacceptable." Reportedly, only 35 independent compa-nies had signed up with MTV for the reduced royalties.
. At a news conference in London, representatives of some independent recording labels said Wednesday that they would withdraw their videos from MTV on March 31, the deadline set by MTV for individual independents to accept its new royalty offer.
. "MTV are the bully boys in the playground," said Katherine Bell, a manager of Chrysalis Music Group, which represents composers. "MTV wouldn't exist without music, and yet it does not respect the very people who make music."
. That theme was echoed at the new conference by others such as Paul Kernick of Sanctuary Records, who said MTV was "devaluing music and it's not a deal we can subscribe to."
. In specific terms, the independent producers argued that while MTV wanted to reduce its overall royalty payments and make no provision for inflation-linked increases, the number of its channels had grown to include several new MTV outlets like MTV Dance, VH1 Classic and VH2. "All this adds up to more programming for less money," AIM said.
. MTV Networks Europe reaches more than 110 million homes on the continent and has expanded rapidly.
. Independent producers also challenged an assertion by MTV that the promotional value of videos being played on its channels offset any direct financial loss.
. A few hours after the news conference, Brent Hansen, president and chief executive of MTV Networks Europe, made public his own letter to the independent producers, saying, "In the interests of supporting the issues that the indies have raised and in a genuine effort to reach a resolution we have decided to return to the negotiating table with the VPL."
. Alison Wenham, the chairman and chief executive of the Association of Independent Music, said, "I think that the attempt by MTV to divide and rule the sector ha
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