Over the last three years, the way music publishing rights in Europe are licensed for online uses has been going through a process of change. It’s the subject of a feature article in Billboard magazine that hit the street on April 11 (Billboard, April 19).
The current state of affairs — most often called chaotic — is due, in large part, to a formal recommendation adopted by the European Commission in October 2005. The EC recommended ways that European collecting societies in each of the European Union member states (now 27 countries) should change in order to promote licensing compositions for use by online services.
There are collecting societies in the 27 EU member states that license either mechanical (i.e., reproduction) rights or performance rights in compositions — or one society that licenses both rights.
One of the EC’s ultimate goals was to make available a single license that would permit online use of a song throughout Europe (i.e., a Pan-European license) rather than a separate license in each country for use only within that country’s borders. The EC also wanted the societies to become competitors with one another to better represent rights holders (i.e., songwriters and publishers).
Billboard invited the societies — as well as the umbrella trade groups for performing right societies (CISAC), mechanical rights societies (BIEM) and music publishers (ICMP/CIEM) — to submit summaries of what they’re doing to promote Pan-European licensing for digital uses to meet the goals of the EC recommendation.
Here are edited versions of the summaries from those who responded to the invitation.
At the end of 2007, in a confused international context and facing the risk of financial sanctions to be taken by the European Commission, SABAM announced the creation of SOLEM, Société pour l’Octroi de Licences Européennes de Musisque (Society for the granting of European Music Licenses), a one-stop-shop for the collection of multinational rights, and notably those relating to online exploitations.
SOLEM was founded with a view to granting licenses to any user for communications [i.e., performances to the public] in at least two EEA territories, for the reproduction of works when it necessarily accompanies their communication to the public and/or for the reproduction as the main activity of the world repertoire in the fields of use falling within the CISAC member societies’ jurisdiction.
SABAM’s aim with SOLEM is not to suck the lifeblood out of the market but to offer an efficient management via a European one-stop-shop.
SOLEM’s capital is open to any collective management society willing to share this wish to offer European licenses without jeopardizing the international network of reciprocal agreements.
Given the discussions currently held at different levels, SABAM has however decided to slow down, and to put a brake on, SOLEM’s activities for the time being, while waiting for the emergence of a European model of collective management supported by publishers and societies.
SACEM’s priority is to ensure efficient collection of royalties and equitable distribution of creators’ and music publishers’ remuneration.
To remain a benchmark player in the management of authors’ rights in the new digital economy, SACEM has developed its action in several directions.
Developing its IT capabilities: SACEM has designed several innovative IT tools, among which is a unique pan-European platform (IDOLS), to facilitate the exchange of information on the exploitation of works, with real-time access, by international record producers and content providers.
SACEM is also actively participating to the development of the Digital Data Exchange (DDEX) protocol. Its goal is to deploy a reliable system for managing the information linked to digital musical content.
Reinforcing repertoires and finding new methods of cooperation with collecting societies: SACEM signed an agreement with its Spanish and Italian sister organizations, SGAE and SIAE. The goal is to grant multi-territorial authorizations for their three major repertoires, under a single license in Europe, for online use.
SACEM is also offering cost effective and efficient solutions to multinational publishers.
Germany’s GEMA and the United Kingdom’s MCPS-PRS Alliance Formed CELAS:
GEMA, in cooperation with the British MCPS / PRS Alliance, has established CELAS GmbH (the Centralized European Licensing and Administrative Service), creating a first Pan-European licensing system for online and mobile uses in Europe.
Since January 2007, CELAS licenses the Anglo-American mechanical repertoire of EMI Music Publishing.
The CELAS license is a new form of licensing in Europe for the digital market place. In a change from current practice, CELAS issues licenses for a specific repertoire across various European countries rather than the current practice of licensing by territory.
Licensees, for the first time, are able to acquire one license for the whole of Europe for a specific repertoire from one place, rather than having to negotiate various different territorial licenses with various societies.
GEMA has successfully positioned itself in the new competitive landscape of copyrights. In the future market of the cross-border licensing of digital music rights, the German authors’ society for music will continue to play a leading part.
SIAE, as the other Europeans societies, regards it considerably difficult to offer Pan-European licenses to its prospective clients at the present time. This is mainly due to the national fiscal systems that strongly penalize the adoption of Pan-European licenses and to the substantial aversion of [digital] operators, working in an extremely complex and uncertain legal environment.
We must not forget that the complaint brought at the DG Competition of the European Commission by RTL and Music Choice against CISAC and performing rights collection societies has not yet been resolved, and this heavily affects the attitude of the protagonists.
Since the EC’s October 2005 recommendation, SIAE formed a joint venture with France’s SACEM and Spain’s SGAE, called HARMONIA.
Technical collaboration with SACEM and SGAE is going in a positive direction for the development of a joint database of all works available to issue Pan-European licenses, for the adoption of integrated systems allowing interoperability of the different platforms for the rights management, the management of users’ report production, and the development of legal framework within which to form an alliance.
In order to promote licensing songs for the Internet, amendments to the tariffs [i.e. royalty rates] in areas of music, literature and drama, visual and audiovisual works have been recently set and approved by the authors’ council of AKKA/LAA. Currently we supplement and specify for this use in both our author agreements and user license agreements.
We have also addressed the Latvian Economic police with the plea to evaluate the action of malevolent homepage providers who ignore the homepage licensing. As it is known, the law enforcing authorities have a right to seize the homepage activity of such dishonest users.
The Netherlands’ BUMA/STEMRA:
BUMA/STEMRA strongly believes that the European Commission’s October 2005 recommendation is undermining cultural diversity, especially the repertoire represented by the smaller collective rights managers [i.e., the collecting societies]. The recommendation will lead to an over-centralized market in which the biggest societies and the major commercial publishers will survive at the expense of the small. This will be detrimental for cultural diversity in Europe.
The European Parliament has recognized this in its March 13, 2007, resolution. BUMA/STEMRA supports this resolution and a demand for a change in the recommendation. To support its case for change, BUMA/STEMRA has undertaken substantive lobbying activities in Brussels and in Strasbourg.
In addition, BUMA/STEMRA was the first society to grant a Pan-European licenses for the world repertoire to eMusic. First distribution of income pursuant to this agreement took place at the end of 2007.
[note: some societies and publishers claim that BUMA/STEMRA did not have the legal right to grant these Pan-European rights to eMusic; there has been no litigation to date]
United Kingdom’s MCPS-PRS Alliance:
The MCPS-PRS Alliance, the U.K.’s alliance of performing and mechanical rights licensing societies, has been at the forefront of Pan-European licensing initiatives since the EC’s 2005 recommendation.
As well as partnering with other European societies on specific projects for major publishers, the alliance is offering its own pan-European licensing service to its independent publisher members. Over 800 publishers have signed up to the initiative.
The alliance is not only focusing on its digital licensing initiatives, but also on improving the efficiency of its back office processing capabilities. With strategic partner STIM (Sweden), the Alliance is working on a project known as ICE which will create a jointly-owned commercial service centre for rights administration.
To begin with, this collaboration involves building a completely new copyright works registration system to dramatically improve data quality and processing capability. The project will additionally assess how the service center can deliver further opportunities for rights holders in a rapidly changing market. A joint project team is currently working on the respective societies’ requirements for the new service centre which will offer its services to other societies in the future.
United States’ BMI
BMI has entered agreements with certain societies to enable Pan-European licensing of our affiliates’ repertoire for online and mobile entertainment service providers.
This is a work in progress, and BMI expects to enter into additional agreements in the future.
As the umbrella organization for 219 authors’ societies in 115 countries, CISAC has a vested interest in the development of online services. These services offer countless opportunities for the creator, including broader, easier access to their works. CISAC and its members are therefore working tirelessly to ensure a seamless service for users that will simplify licensing and lead to a vibrant online marketplace for creative works.
CISAC’s primary focus has been on addressing the points raised by the EC’s DG Competition in their Statement of Objections, in particular by drafting an initial set of Commitments. Nonetheless, other commission initiatives such as the discussions around the DG Internal Market’s 2005 recommendation on cross border licensing and the DG Information Society’s Content Online proposal must also be considered. In these cases, CISAC has contributed fully to the consultation process and has also encouraged the participation of creators.
In the past few months, online licensing has been the subject of several meetings that CISAC has initiated or participated in with its members, music publishers (the ICMP and IMPA specifically), the concerned commission bodies, the EU Parliament and creators. This dialogue has already led to tangible progress. Further meetings are planned for the coming weeks during which CISAC will continue to work alongside its partners to cultivate workable options for online licensing across Europe and the world.
International Confederation of Music Publishers (ICMP/CIEM):
The July 7, 2006, ICMP-GESAC Common Declaration establishes that societies will implement the European Commission’s Oct. 2005 recommendation themselves. GESAC represents 34 of the largest societies in Europe.
In addition to adopting minimum standards for the way in which the societies are to govern the operation of their societies, the declaration acknowledged two new online categories in order to better represent the different rights: interactive and non-interactive.
ICMP invited EU societies to present their views on online licensing in Brussels in 2006. France’s SACEM, Italy’s SIAE, the U.K.’s MCPS-PRS Alliance and Portugal’s SPA then amended their bylaws to include the new online categories. Publishers’ representation, with the consent of their songwriter partners, was also improved at Finland’s TEOSTO, BUMA-STEMRA and SPA.
ICMP has also called on CISAC to construct a European one-stop shop to respond to the licensees’ quest for streamlined licenses.
ICMP’s concept of the Pan-European Portal (PEP) is that of a central signaling portal and back-office. PEP would thus have the advantage of being fully compliant with competition law, as it would allow for rightholders’ choice of which society could represent their Pan-European rights. Moreover, PEP would be neutral in respect to cultural diversity, which is crucial for music publishing as a cornerstone of cultural diversity.