Online music faces EU licence fees shake-up

By Anna McLauchlin

Date: 09/06/05

Online distributors of on-demand music could find it easier to pay their licence fees for their European websites under a proposal being mooted by the European Commission.

A Commission source told European Voice that the executive is considering how to improve cross-border licensing systems for online music distributors, which currently have to apply to 25 different rights management bodies - known as 'collecting societies'.

The information marks a shift in Commission thinking on how to deal with the management of copyright in the internal market following its communication on the subject in April last year.

At that time the Commission was focusing more on the transparency of collecting societies and the rules for the distribution of rights revenue to artists and performers.

But following an impact assessment, sources say that the most important issue for the internal market is to tackle cross-border licence fees for music, as this is where the largest sums of money are changing hands.

The results of the impact assessment will be published for comment in July, following which the Commission may make a proposal in the autumn. "At the moment web-based distributors of 'music on demand' have to clear the rights for the music in every single member state to offer services across the EU," said the source. "This could potentially cost them so much in administration that they will not bother doing it."

But some sectors are likely to be sceptical of the proposal, not least the collecting societies, which are loath to give up their national control over licenses.

"Internet service providers (ISP) complain that the EU should be like the US but it's a false argument because the EU is not a single market like the US," said Véronique Desbrosses, secretary-general of the European Grouping of Societies of Authors and Composers (GESAC). "What we want to avoid is devaluing the whole system as that will be damaging for artists, whereby ISPs go to whichever collecting society has the lowest prices to get a music portfolio that it can then exploit across the entire EU."

The music industry is currently working on a solution that might be acceptable to the Commission. The executive's competition department has already challenged the industry's 'Santiago agreement' which allowed companies to grant 'one-stop' copyright licences to online commercial users for downloading music.

Richard Nash of the European Internet Services Providers Association said that he would welcome such a proposal.

"We'd be very happy to see any competition bottlenecks removed to make sure that the provision of new and exciting services are available to consumers, but it will be difficult for the Commission to come up with something that pleases everyone," he said.

Wes Himes of the European digital media association EDIMA echoed Nash's sentiment. "Anything that would rationalise the license system would be great for us," he said.

Article reports that the European Commission was discussing proposals to how improve cross-border licensing systems for online music distributors, which currently have to apply to 25 different rights management bodies - known as 'collecting societies'.

European Commission: DG Internal Market and Services: Copyright and Neighbouring Rights: Copyright in the Information Society http://ec.europa.eu/comm/internal_market/copyright/copyright-infso/copyright-infso_en.htm

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