Standard Contract test

The Standard Contract is negotiated between BIEM and the International Federation of the Phonographic Industry (IFPI). It lays down the general terms and conditions under which record producers can use the repertoire of BIEM Member Societies on releases of audio-only recordings. The Standard Contract is implemented in one form or another in most countries – unless local laws or conditions dictate otherwise.

The Standard Contract effectively provides a licence for the reproduction of musical works and means that record producers can avail themselves of a "one-stop shop" for clearing the rights in songs.

It is essential in maximising efficiency gains in the administration of those rights for both rights owners and users.

The royalty rate agreed between BIEM and IFPI for mechanical reproduction rights is 11% on the Published Price to Dealers (PPD - the highest price charged by a record producer to a retailer selling directly to consumers) and concerns physical audio products only.
Two deductions are applied on the gross royalty rate: 12% for rebates and discounts and 10% for packaging costs. This results in an effective rate of 8.712% of PPD.

Rates for audio-visual use of protected works are negotiated on a territory-by-territory basis, as rates for Internet and other usages.

The Standard Contract provides for a minimum royalty equal to two-thirds of the normal royalty rate. There is also a provision for a minimum budget royalty equal to 57% of the normal minimum royalty and concerns only re-releases of carriers not less than one year after the original release, priced at least 35% below the original price.

The last amendment of the Standard Contract (No.8) came into effect on 1st January 2014.

The National Conditions applied by each BIEM society are detailed with the licensing conditions (national conditions are displayed in the contract's comments or in the table as the case may be).

1975

Implementation of the Standard Contract

Basis rate of 8% RRP* ; packaging adjustment of 2.5%, 4% or 6% (discs) or 17% tapes.

1980

1st amendment to the contract

Basis rate of 8% most generally practiced retail price** or RRP ; packaging adjustment of 2.5%, 4% or 6% (discs) or 17% tapes.

1985

2nd amendment to the contract

Basis rate of 11% highest PPD or 8% RRP ; rebates on PPD locally negociated ; packaging adjustments of 10% (PPD) or 7.5% (Retail price)

1988

3rd amendment to the contract (1)

Basis rate of 11% highest PPD or 8% RRP ; rebates on PPD Locally negociated (with a max of 4%) ; packaging adjustments of 10% (PPD) or 7.5% (Retail price) ; RRP net rate of 7.4% ; deduction on PPD for CDs

1988

3rd amendment to the contract (2)

Basis rate of 11% highest PPD or 8% RRP ; rebates on PPD of 4% ; packaging adjustments of 10% (PPD) or 7.5% (Retail price) ; PPD net rate of 9.504% ; RRP net rate of 7.4% ; deduction on PPD of 20% for CDs