Are pop videos overrated?

Last week Mr Justice Floyd allowed an appeal from a decision of the Copyright Tribunal over the royalty TV channels should pay for broadcasting music videos. CSC Media Group, which operates seven TV music channels, licenses its videos from Video Performance Ltd (VPL). As VPL is a collective licensing body, CSC had the right to refer the terms of its expiring licence to the Copyright Tribunal. Last year, the Tribunal determined that the correct fee for CSC to pay VPL should be 12.5% of revenues rather than the existing 20% (pro-rated according to amount of VPL content used).

Decisions of the Tribunal can be appealed on a point of law. The Copyright, Designs and Patents Act 1988 requires the Tribunal to set reasonable terms and in determining what is reasonable it should have regard to the terms of other similar licences. The High Court argued that the most relevant licence for the Tribunal to consider was VPL’s licence to BSkyB, which had a 20% royalty. Although the Tribunal had referred to the BSkyB licence, it only did so after it had already made its mind up that the royalty should fall within a window of 10–15%. This meant that the BSkyB licence was given insufficient weight in its decision-making process. The Tribunal had ‘had regard’ to it, but not primary regard. The Tribunal had erred in law: it had jumped through the right hoops – but in the wrong order.

But is it really undisputable good sense to use the BSkyB licence as the principal measuring stick for the CSC licence when both were from the same collective-licensing body? Both licensees must have experienced a similar imbalance of bargaining power – VPL was the only possible licensor for the content they required and it had apparently made the 20% non-negotiable for years. If anything, BSkyB may have been even more unenthusiastic about the terms than CSC – unable to make good business out of music video, it wasted no time in selling off its channels even before its licence was signed.