music

Brussels ends national music royalty monopolies

Wednesday 16 July 2008

Music royalty societies used to make authors and composers buy an exclusive licence to the national royalty society of their own country. But the Commission ended the restrictive clauses on Wednesday, opening up a European market.

BRUSSELS - Authors and composers from the Rolling Stones to the Arctic Monkeys will be able to choose any of two dozen societies to gather their royalties in the European Union under a decision by the bloc's executive on Wednesday.

The decision, aimed at opening up competition among the European groups, also says the societies must be permitted to license material for use on the Internet or by broadcast stations outside their own countries.

Collecting societies take music royalties for everything from performances before small groups to songs or other material used in movies, on television or on the Internet.

The Commission decision ends restrictive clauses in most of the cross-border contracts for the societies in dealing with each other.

The decision was applauded by the two companies that complained to the Commission, British online group Music Choice and Luxembourg broadcaster RTL Group.

Music Choice said the decision "frees those who legally commercialise music" from a cartel and helps create a European single market.

RTL Group said it was pleased with the decision eight years after it filed its complaint and that transaction costs would now diminish, benefiting all.

The collecting societies' umbrella group, CISAC, the International Confederation of Societies of Authors and Composers, said it regretted the decision.

It was also condemned by the European Composer and Songwriter Alliance, representing such names as David Gilmour of Pink Floyd and Paul McCartney.

"The Commission's decision is an attack on cultural diversity," the group said, arguing it would create "fierce competition" that would damage smaller societies.

Competition Commissioner Neelie Kroes said exactly the opposite, arguing in a statement it would "benefit cultural diversity by encouraging collecting societies to offer composers and lyricists a better deal in terms of collecting the money to which they are entitled".

The collecting societies can continue to hold monopolies inside their own countries.

Courts have blessed exclusive national collecting societies for the labour-intensive practice of policing bars and clubs, but said such restrictions make little sense for satellite, cable, and Internet transmissions.

"The removal of these restrictions will allow authors to choose which collecting society manages their copyright," the Commission said.

It said authors can choose on the basis of quality of service, efficiency of collection and level of management fees deducted.

"It will also make it easier for users to obtain licences for broadcasting music over the Internet, by cable and by satellite in several countries from a single collection society of their choice," the statement said.

The Commission said that contrasted with the existing situation and cited the two companies that complained.

"The effect for a commercial user such as RTL or Music Choice that wants to offer a pan-European media service is that it cannot receive a licence which covers several member states, but has to negotiate with each individual national collecting society," it said.

Critics who saw the decision while it was in draft form say it does little more than earlier efforts dating back seven years, which fell short of breaking up the monopolies.