Brussels, 14/10/2005 (Agence Europe) - On 12 October, the European Commission adopted a recommendation on the management of online rights in musical works. The recommendation puts forward measures for improving the EU-wide licensing of copyright for online services. In a press release, European Internal Market Commissioner Charlie McCreevy said: “I want to foster a climate where EU-wide licenses are more readily available for legitimate online music service providers.” He urged Member States to revise their national legislation and adjust it where necessary to remove obstacles to the granting of pan-European online music licences, warning: “I am making a recommendation as to how the market should develop. I will be monitoring the situation closely and, if I am not satisfied that sufficient progress is being made, I will take tougher action.” The recommendation was adopted following consultation with all stakeholders - copyright holders, rights management societies and commercial users of online music.
The recommendation encourages Member States to establish a regulatory environment better adapted to the EU-wide licencing of copyright for online music services. National legislation must ensure rights holders (composers, lyric writers, singers and musicians) can have royalty fees collected by the rights management body of their choice anywhere in the EU for online music. Failing which, they must have the option of withdrawing the right to play their music online and transfer management of their rights to another rights management body. Improvements are necessary because new Internet-based services such as webcasting or on on-demand music downloads need a license that covers their activities throughout the EU. The absence of EU-wide copyright licenses has been one factor that has made it difficult for new Internet-based music services to develop their full potential.
The Commission recommends that right-holders and commercial users of copyright-protected material should be given a choice as to their preferred model of licensing. Different online services might require different forms of EU-wide licensing policies. The recommendation therefore proposes the elimination of territorial restrictions and customer allocation provisions in existing licensing contracts while leaving right-holders who do not wish to make use of those contracts the possibility to tender their repertoire for EU-wide direct licensing.
The recommendation also includes provisions on governance, transparency, dispute settlement and accountability of collective rights managers, which should introduce a culture of transparency and good governance enabling all relevant stakeholders to make an informed decision as to the licensing model best suited to their needs. The Member States are asked to provide effective dispute management mechanisms on tariffs, online licenses, the responsibility of rights managers and withdrawal of rights. The Commission asks Member States to send in a report each year on the measures taken to implement the recommendations so it can monitor progress in developing online music and examine whether further action is needed at EU level.
Stakeholders were consulted on the three options in July 2005 (see EUROPE 8986 and 9012). In order to improve EU-wide online licensing of music, the Commission considered three options: (1) Do nothing; (2) improve cooperation among collecting societies allowing each society in the EU to grant a EU-wide license covering the other societies' repertoires; or (3) give right-holders the choice to appoint a collective rights manager for the online use of their musical works across the entire EU (“EU-wide direct licensing”). Some 85 stakeholders, from right-holders, rights management societies and commercial users, submitted their opinions on the three options. There was broad consensus that Option 1 was not an option. Stakeholders are divided between Options 2 and 3, with commercial users (International Federation of the Phonographic Industry, radio, online music providers, MTV, the European Group of Societies of Authors and Composers, GESAC, and consumer group BEUC) favouring Option 2, the majority of collective rights managers favouring modified versions of Option 2 (whereby each company could issue EU licences covering the repertoire of the other companies) and the music publishing community, the independent record labels and certain collective rights managers favouring Option 3 (BMG, EMI, Sony, Universal, Warner-Chapell, IMPALA and some mobile phone operators).
At the Creative Economy conference in London on 7 October, Charlie McCreevy said the European copyright management model belongs more to the 19th than to the twenty-first century. He said territorial management of royalties and rights is too expensive and burdensome, being effective neither for content users not for rights-holders who want their music broadcast as widely as possible. In 2004, the online music market was worth USD 330 mil and is expected to double in 2005 and provide 25% of the music industry's revenue in five years time. Some 50 million portable music sets were sold in 2004, including 10 million i-pods.
In a press release, the European Group of Societies of Authors and Composers, GESAC, said the recommendation provided a suitable framework for establishing a new management model, giving greater flexibility to online music users and giving access to a global repertoire by providing cross-border licences and a high level of security.