British, Swedish and German Collection Bodies Unite, Look to Simplify Digital Royalties

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Three of Europe’s biggest collection societies, PRS for Music, STIM and GEMA, have been granted clearance from the European Commission to establish a pan-European online music rights licensing and processing hub.

The one-stop service will enable faster and simplified rights negotiations for digital music services operating in Europe and will result in faster and more precise payments of royalties to rights holders, says PRS for Music (U.K.), STIM (Sweden) and GEMA (Germany), which collectively represent over 250,000 songwriters.

The yet-to-be-launched hub will also result in reduced processing costs through shared infrastructure and full transparency for all rights holders, claims a joint statement that calls the partnership "the first combined offering of its kind" and the first multi-repertoire services to provide integrated ‘back office’ data processing services alongside ‘front office’ multi-territory licensing services. This unparalleled integration will help resolve issues related to split-copyright licensing and ensure that copyrighted works are recorded accurately, thereby eliminating hold-ups and disputes, say the new partners.

"This is a very significant day for online music licensing as our new joint venture is uniquely positioned to deal with the rapidly transforming online music market," said PRS for Music chief executive Robert Ashcroft in a statement announcing the EU’s decision.

"Our hub enables fluidity, agility and speed in the multi-territory market, facilitates the licensing process for digital service providers and improves the quality of rights administration for the benefit of rights holders and users," added GEMA’s CEO Dr Harald Heker, who called the joint venture between PRS, GEMA and STIM, "an important new chapter for the whole rights management industry and a huge step forward towards the development of an EU-wide Digital Single Market for music."

Proposals for the establishment of a pan-European online music rights licensing and processing hub dates back to June 2013 when PRS for Music, STIM and GEMA announced a joint partnership with plans to build a multi-territorial licensing and processing facility that would combine the national repertoires of all three organisations. Originally slated for delivery in 2014, the service was delayed following an in-depth European Commission investigation as part of the EU Merger Regulation.

Having now received approval from the EU Commission, the new licensing hub is expected to launch later this year, according to a spokesperson for PRS for Music. It follows a growing trend of consolidation in the licensing sphere, upending the existing and costly need for digital services to have individual licensing agreements in each territory that they operate. In June 2014, Sony/ATV Music Publishing launched SOLAR, a one-stop digital service pan-European licensing venture run in partnership with PRS for Music and GEMA.

Earlier this month, Kobalt announced that it was to launch what it termed the world’s "first global, direct, digital mechanical and performing rights society." The news followed last year's quiet acquisition of the American Mechanical Rights Agency, or AMRA, with the new collection society to offer two principle services: licensing of AMRA publisher members' Anglo-American repertoire to digital service providers; and collecting a writer's share of public performance monies on behalf of members.