Songwriters across Europe may soon get paid quicker, as the European Union has issued a proposal to change how copyright collecting societies work across the 27 nations in the union. The plan will be music to the ears of starving artists waiting for cross-border digital licensing royalties to arrive, and, perhaps this proposal (COM(2012)372/F) deserves a more mellifluous name than its current title as the “Collective Directive.” What’s the drum beat for this change?
The big players in providing online music — Spotify, Google Play, iTunes and the recently sold MOG — all aim to offer the most service in the most places. Because Europeans nation-hop on EasyJet the way Angelenos day-trip to Vegas, the provider with the greatest reach wins, and, as the British news agency Reuters notes, iTtunes is the only service available in all 27 states. Still, as each music service strives for that big Continental span, they all need the economies of a single, multiterritorial license in much the same way as label accountants want a streamlining of their firms’ means of revenue collection.
Enter the “Collective Directive.” It’s part of the union’s larger strategy to harmonize intellectual property rights across the Continent, and getting those in the music business to sing off the same page would be key to realizing the grand vision of a “genuine Single Market in Europe.”
But unlike the U.S., where ASCAP and SESAC dominate, the European collection societies work in a fragmented market, splintered by nation. The directive suggests increased standards in both technical competency for handling data and shorter payment timelines and argues these moves will increase the vitality of legitimate services, thus providing a further incentive for adoption as a way to attack and undercut music pirates. The EU values the Continental IP rights market at 6 billion euros annually — some 4.8 billion Euros of which is in music-related areas; those sums are collected by 250 rights societies. With so much lucre at stake, little wonder that operatic howls came in just on cue after the policy wonks proffered their new music measures.
Winner — Large Collecting Societies:
Bird & Bird, a notable IP firm across the water, predicts the new proposal will lead to consolidation among collecting societies. The bigs (who already offer multiterritory collective licensing) will absorb market share now held by smaller societies who lack the technical capacity to meet the regulations.
Loser — Societies’ Interest Income:
Loser — Artists’ Offline Revenue
The directive appears to give with one hand and take with the other. While digital revenue must be paid within the year timeline, offline royalty revenue may be retained for up to 24 months. Artists like Pink Floyd (whose graying fan base is likely to be offline consumers) have spoken up on this issue already, with the support of web-friendly major acts like Radiohead.
The big asterisk on the directive, of course, is that it’s now a draft and little more. It still must be approved by the European Parliament and then be put into national laws in each EU nation by lawmakers in 27 capitals — no easy task as the fumbling, dawdled response to the sky-is-falling Continental debt-and-banking crisis has shown oh so clearly.
“EU Flag Waving” used under Creative Commons Attribution-Share Alike license.“Money Mailbox” by themailboxmoneyblog.com;Charlie Brown production still from “Be My Valentine, Charlie Brown,” Lee Mendelson Film Productions, 1975. Photo Illustration by Mikey Glazer.