Apple's iTunes and mobile network operators have agreed a deal that means composers, song writers and publishers will receive an 8 per cent royalty on songs sold.
The deal also sets a lower 6.5 per cent royalty rate for non-demand services, such as music subscription services. The parties have also agreed to a minimum royalty rate, to cater for situations in which the initial price of music sold online falls.
The three-year deal has been agreed between the MCPS-PRS Alliance representing songwriters, composers and music publishers, British recorded music trade association the BPI, iTunes, and four UK mobile network operators, O2, Orange, T-Mobile and Vodafone.
The UK music download market is the biggest in Europe with sales of 34 million units so far this year according to the Official UK Charts Company, already more than in the whole of 2005.
"All parties to the settlement welcome this agreement, which will help drive the on-going growth of the legitimate digital music market," an MCPS-PRS statement said.
Some disagreements remain between the online services and artist royalty collectors, but these are likely to be resolved by the end of the year.