The Belgian Society of Authors, Composers and Publishers (SABAM) has not renewed its pan-European licensing agreement with Universal Music Group International (UMGI) for the collection of mechanical royalties.
SABAM collected mechanical royalties from the sale of UMGI CDs and DVDs in 18 European countries. The deal was first agreed in 2004 and renewed in 2007. Both parties made statements suggesting they had each decided not to renew the agreement.
At UMGI, Simon Carmel, VP legal and business affairs, confirmed that Universal moved its central licensing agreement to the French mechanical collecting society SDRM, effective Oct. 1, 2010.
“All record companies from time to time review who their central licensing agreement should be with,” said Carmel. “We’ve moved ourselves over the years: we started in 1987 with Buma/Stemra in the Netherlands, then we went to MCPS in the U.K., then SABAM and now we’re moving to the French society – it was time to make a move.”
“In 2004, the contract accounted for about €100 million ($136.7 million) in turnover in those 18 countries, for which SABAM negotiated an administration fee,” said Thierry Dachelet, director of communication and external relations at SABAM. “In 2007, despite the already dropping CD market, the central licensing agreement was renewed. Last year, the SABAM/Universal central licensing agreement represented some 60% of the initial value.”
“In view of the shrinking of the record industry, SABAM has judged that a renewal of this agreement no longer offered sufficient guarantees in terms of profitability. The management of this agreement would have been carried out at a loss and consequently to the detriment of the associate members,” added Christophe Depreter, GM of SABAM.
According to Depreter, SABAM will continue its strategy of positioning itself on the European cultural market, within the framework of its mission as to the protection of its members’ rights. “The experience acquired within the framework of this contract shall no doubt allow SABAM to strive towards its double objective of enhancing the status of the authors’ and creative artists’ rights and of providing quality services,” he said.