EU-wide copyright for online music under consideration

The Commission has come forward with a proposal for the EU-wide licensing of music in legal download services on the internet.

The Commission has compared the online music market in the US and the EU and found out that, in spite of the larger number of internet users in the EU, the online music market in the US was eight times as big in the US and will still be five times as big as in the EU. 

Commission analyses said that the music industry’s argument that illegal downloading is to blame for the EU lagging behind the US cannot be true, because there is more of this activity in the US than in the EU. While the reasons may be more complex, calculations by the Commission came to the conclusion that the EU’s fragmented market for online licenses is one big obstacle for those willing to set up online download services. In order to do so, one has to apply for a license for each song with a collecting society in each of the EU’s 25 member states. The costs can amount to up to 19,000 euro per song or 475,000 euro for any 50 songs. At an estimated gain of 0.10 euro per downloaded song, a service offering only 50 songs would have to have 4.75 million paid downloads just to pay royalties, or 4.75 billion downloads for a service offering the more realistic number of 50,000 songs. This number is currently not achievable. 

In order to solve this dilemma, the Commission is proposing a pan-European licence, in the first instance only for music, and only for online usage. Under the proposal, holders of copyright in music could sign off the management of online usage rights to any collective rights management bodies in the EU. Operators of legal downloading services anywhere in the EU could select from which rights management body to license the music they are offering for download. 

GESAC, representing European collecting societies, said: "We question the effectiveness of the proposed system in terms of simplifying the acquisition of rights for the use of music on the Internet. Moreover, the consequences as regards legal security and the economic costs involved in this proposal must also be examined."

The Business Software Alliance, speaking for a number of big software companies, welcomed the proposal on the grounds that "Competition among collecting societies would go a long way towards encouraging a viable alternative to online piracy", but regretted that the commission did not at the same time propose to abolish or cut levies on media and computer hardware.  

Under the proposal, artists could register their works for online distribution with any collective rights management body in any of the EU's 25 member states. The licence obtained would be valid in the whole EU. 

The Commission expects the EU-wide licence to boost legal music download services, which it regards as a potential driver of e-commerce in the EU. 

As an exception to the usual way of presenting a draft law, the Commission published a staff working document on 7 July 2005, before putting forward a formal proposal. 

Following this publication, the Commission will soon launch a public consultation based on the staff working document. 

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