"Dear Label Partners,
In January, Beatport will celebrate its five year anniversary. Along with our business planning for 2009, Beatport is announcing some enhancements to our business that better reflect the needs of both our label partners as well as our loyal customers. These changes are in response to the issues brought to us by our labels partners and customers over the past few weeks.
Changes for Labels:
Mechanical Royalties: In the past weeks Beatport has heard concerns raised by our labels about music publishing monies. These labels were concerned that Beatport would seek repayment from them as Beatport itself has been forced to make retroactive payments by the music publishing rights societies on downloads made since Beatport.com was launched. In response to these concerns and in the spirit of unity and a sign of good faith, Beatport is announcing that it will relieve our label partners from all mechanical royalty back-payment liabilities prior to Q3 2008 for the territory of the world excluding the United States. For all labels, this represents an average bonus of about 10% of the total sales price generated by track downloads. Even though the legal responsibilities have always been clearly defined in our existing contracts, we understand that the practical impact of potential back payment liabilities would be time consuming and chaotic for many labels.
Commencing with the period Q3 2008, for sales throughout the world, excluding the US, Beatport will deduct the music publishing royalties payable on downloads from all labels and remit it to the applicable music publishing rights collection society. For sales within the US, Labels will still be responsible for paying all music publishing royalties to the appropriate parties as is contemplated in the Beatport content contract.
Standard Label Agreements: As an additional concession towards our label partners, Beatport has decided to dispose of the allowable expenses charge starting Q2 of 2009. These changes will be stated in a new agreement, which will need to be signed by all label partners prior to that start of Q2 of 2009 in order for this change to be effective.
Exclusive Label Agreements: For our exclusive label partners, we will be offering a more flexible time frame for the sale of exclusive content on Beatport. As with the Standard Label Agreement, the Exclusive Label Agreement will also have any provision for allowable expenses removed and the current higher split of Net Revenues shall remain in place regardless of the agreed exclusivity time frames. Further details will be announced in the coming weeks.
Changes for Customers:
New Pricing: In an effort to stay ahead of the changing global economy, Beatport is making proactive adjustments to its content pricing strategy in the European and UK markets. The new prices are a reflection of the rapidly changing digital environment and the greater economic challenges our customers are facing. Effective Wednesday December 03, 2008, prices will be as follows:
Exclusive Classic / New Release General
USD $2.49 $1.99 $1.49
GBP £1.73 £1.30 £1.12
EUR €2.17 €1.56 €1.30
Lastly, while there may be tough economic conditions worldwide, Beatport will continue to defend the value of your music against market forces that benefit from discounting or stealing your content. Beatport is continuously monitoring unusual shopping behavior, blacklisting customers who purchase to upload music for free downloads and processing take down notices with music blog sites worldwide on a weekly basis.
As always, we are grateful for your partnership and continued support in our efforts to support electronic music around the world.
Beatport Management "