Music firms condemn download shake-up

By Anna McLauchlin

Date: 06/10/05

European online music providers are warning that new EU licensing rules to be published on Monday (10 October) will not make it cheaper or easier for them to distribute music in Europe.

Following pressure from collecting societies - associations that collect and distribute artists' royalties - the European Commission has weakened its original proposal, which would have created pan-EU licence fees for online music companies.

At the moment any company wanting to distribute online music must apply to each national collecting society in which it wants to operate.

Now the proposal, seen by European Voice, will allow rights-holders to apply to any collecting society for a licence. It asks societies to grant licences "without any discrimination among users", but does not mention a single licence.

Lucy Cronin from the European Digital Media Association said that the provisions were unlikely to be strong enough to change current practices.

"We don't think that this will lead to the multi-territorial licensing that the Commission is hoping for," she said.

The Commission has also decided to issue the rules under a non-binding recommendation rather than a directive and removed a 4-year review clause for the executive to take further action if there has been no impact on the market.

"This is a much weaker version that will do nothing to tackle the problems that the Commission itself recognised in July," Cronin said.

The Commission's July assessment found that having to apply to 25 different collecting societies to distribute music was slowing the potential of European online businesses.

Mark McGann, from EICTA, an association representing European digital technology associations, said that he too was disappointed.

With technology allowing online providers to determine exactly how many songs are downloaded, digital media rights associations are pushing for the right to deal with rights-holders directly rather than pass through a collecting society.

"We were hoping for a directive that would have forced collecting societies to disclose their financial flow and their tariffs, not just a recommendation," he said.

He also highlighted the need for an effective system for contesting tariffs set by collecting societies.

The Commission has replaced rules allowing commercial rights users to dispute tariffs set by collecting societies with an invitation for member states to set up a suitable system to resolve contested fees.

A spokeswoman from GESAC, the European federation of collecting societies, declined to comment on the text before it was formally published.

Collecting societies had warned that the Commission's original intention to create a pan-EU licence for online music distributors would result in large music publishers forming their own society able to offer the cheapest terms.

That would put smaller, weaker collecting societies and performers at a competitive disadvantage, they said.

Article anticipates the adoption of a recommendation by the European Commission on 11 October 2005 laying out licensing rules for online music providers.

European Digital Media Association: Homepage http://www.europeandigitalmediaassociation.org

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