LONDON -- Pressure from European indie record labels has forced Viacom's MTV Networks Europe to restart talks with U.K. collecting society Video Performance Ltd. over licensing rights for musicvideos.
Impala, a European trade body representing 2,400 independent record companies, accused MTV of threatening to stop airing videos from indie labels unless they agreed to a 55% cut in royalties to £840,000 ($1.55 million).
MTV had been trying to bypass the VPL, describing it as a monopoly, and sign direct deals with the labels.
In an open letter, MTVNE president-CEO Brent Hansen stated: "We value our relationships with artists and labels -- having spent nearly 20 years fighting (in) their corner. Events over the last few days have jeopardized some of our most treasured relationships."
Hansen said MTV still believed collective licensing was not in the best interests of independent labels. "Direct deals offer many significant benefits. However, 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."
The spat started when MTV and VPL began renegotiating a previous five-year license to broadcast Euro independent videos across MTV's European channels. The pact expired Dec. 31 but has been extended to March 31.
MTV claimed VPL proposed a new rate equivalent to 2½ times the old rate. The indies refute that, saying they were not looking for an increase.
"We are defending a decrease," said Martin Mills, chairman of the Beggars Group stable of companies.
The proposed $1.55 million in royalties are divided between all the European indies whose videos are shown on MTV. "It costs up to £100,000 to make a musicvideo," added Mills. "MTV's total payment barely covers the cost of eight videos."
Among the artists that could be affected are the White Stripes, Badly Drawn Boy, Craig David, Coldcut and Prodigy.
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