Copyrights: European Commission proposed easier music licensing in the Single Market

Following concerns over financial irregularities and difficult online licencing, the European Commission has proposed in July 2012 a new directive requiring copyright collecting societies to increase their transparency, efficiency and management of revenues.

The companies concerned are the intermediaries set up between copyright owners (authors, songwriters) and service providers. Collecting societies are responsible for distributing and licencing musical, literary, academic and journalistic material and collecting royalties. Among the best known are SACEM in France, PRS in the UK and SABAM in Belgium. In 2010 collecting societies accounted for 80% of revenues in the music industry, which itself was worth an estimated €6 billion.

In proposing the measure on Wednesday (11 July), the Commission said some of these societies struggled to “adapt to the requirements of the management of online use of musical works, in particular in a cross-border context.”

Key elements of the proposed Directive

Today's proposal pursues two complementary objectives:

  • To promote greater transparency and improved governance of collecting societies through strengthened reporting obligations and rightholders’ control over their activities, so as to create incentives for more innovative and better quality services.

  • Building upon this – and more specifically – to encourage and facilitate multi-territorial and multi-repertoire licensing of authors' rights in musical works for online uses in the EU/EEA.

In practice:

  • Rightholders would have a direct say in the management of their rights, be remunerated more quickly and their ability to choose the most efficient collecting society for their purposes would be enshrined in law. This would bring about better protection of rightholders' interests, as well as increased access to cultural content for consumers.

  • The new rules would change the way in which collecting societies work across Europe, with new requirements such as improved management of repertoire, quicker payments to members, clarity in revenue streams from exploitation of rights, an annual transparency report and additional information provided directly to rightholders and business partners (such as other collecting societies). Member States would need to have mechanisms for solving disputes between collecting societies and rightholders. Improved standards and processes should result in better functioning collecting societies and more confidence surrounding their activities.

  • The multi-territorial licensing of authors' rights for the use of music on the Internet across borders would be facilitated but also subjected to the demonstration of the technical capacity to perform this task efficiently. This would benefit authors, internet service providers and citizens alike.

Key documents: