The first ever one-stop online shop for mechanical rights licensing in Europe has been established, following a ground breaking deal between Impala, the Brussels-based Independent Music Companies Association, and Dutch collecting society Buma/Stemra.
Effective immediately, the agreement enables Impala members (and members of national associations that are members of Impala) to acquire a single European mechanical license for physical product, provided by Buma/Stemra. The deal covers both audio carriers (CDS, vinyl, etc) and music DVD productions and applies to a full range of international repertoire.
Members throughout the European Economic Area (EEA) are also eligible to benefit from the deal, which Helen Smith, Impala executive chair, says "finally puts independent labels on a level playing field with the majors in terms of mechanical licensing."
"Independents stand to benefit from the same operating environment and conditions that is typically reserved at the moment for the majors and a small handful of independents," Smith tells Billboard.biz. "Longer term, independent labels will be stronger and more viable as a result."
Under existing terms, the majority of independent labels have to purchase mechanical license agreements in each European country to manufacture and distribute physical music product. All the major labels already have single European mechanical licenses for physical product, as do a small number of independents. The new deal, which is non-exclusive (Impala members are not obliged to participate) and follows ten years of negotiations between Impala and a number of different European societies, will improve efficiency and administration of mechanical rights for independent labels, says Buma/Stemra CEO Hein van der Ree.
"Right now a lot of these labels are paying mechanicals on all kinds of different conditions to all kinds of different societies," van der Ree tells Billboard.biz. "It makes it much more transparent to say: 'Okay, this is the deal for independents.' And for the rights owners that we represent, it's much better. Through the aggregation of all these licenses [rights owners] get a clear picture of the use of their repertoire by the records companies… it's much easier for them to track on what terms the rights are being paid. It creates efficiencies for both sides."
According to Impala's Smith, Buma/Stemra presented the best proposal out of the various European collection societies that it spoke to when negotiating for a one-stop-shop mechanical license.
"One of the top priorities we asked of societies was: 'Can you guarantee that writers and publishers will benefit from the best standards of administration in terms of reporting, collection and distribution of royalties?'" says Smith. "Ultimately, the vision is to work together to improve how mechanical licenses actually operate in the interests of labels and also writers and publishers." Physical sales accounted for over 70% of the European market in 2010, according to the IFPI. Impala says that independent music companies account for more than 80% of all new releases, as well as 80% of jobs in the music industry.
"I think it will strengthen the independent sector," adds van der Ree, who says that implementing a single European mechanical license will not require any additional investment into Buma/Stemra's infrastructure. "The independent record producing community is very dynamic and vibrant," he continues. "They probably release more records than anybody else and employ more people than anybody else, so to work with that community as Buma/Stemra is strategically a very smart move because I think there will always be a growing and powerful future for the independents."