EU online music deal to challenge big labels’ clout

The European Commission has brokered a deal with the music industry to establish online European repertoires as a way to boost cross-border sales. The move is also expected to challenge the power of big labels and to have a positive effect on tackling online piracy.

In a joint statement, collecting societies, labels, online music shops, consumer groups and manufacturers agreed to pursue new licensing platforms comprising repertoires of several collecting societies. 

They will now be encouraged to cooperate among each other and put together “the largest possible repertoire” made up of their national catalogues.

The agreement could favour the revival of national and less known artists since their music will now be easier to download and is likely to be less expensive.

The deal, brokered by EU Competition Commissioner Neelie Kroes, will now be subject to further negotiations to thrash out the detail.

“We agreed to set up a common, non-mandatory and non-exclusive portal to include the largest possible repertoire,” said Bernard Miyet, head of French collecting society Sacem, commenting on the industry deal for EURACTIV.

In practical terms, this means that online music shops such as iTunes or Amazon will be able to access the tracks and CDs of European artists in a single move, without facing different national legislations and conflicting collective societies.

So far, fragmented national copyright rules have led to smaller offers and different prices for consumers according to their country of origin. The strict application of these rules has even prevented consumers from buying music in online stores registered in other EU countries, violating the principles of the EU internal market.

The French, Italian, Spanish, and Scandinavian collecting societies have already shown an interest in creating a common repertoire to boost online music offers. Indeed, English collecting society PRS for Music said there might be more than one single common repertoire.

Big labels such as Universal or EMI will be free to put their catalogues on the common portal or sell them directly to retail chains. EMI has already announced that it will soon sign “non-exclusive” deals with the Spanish and French collecting societies.

Anti-piracy effect

The agreement is also expected to help the fight against piracy. Indeed, expanding repertoires and simpler administrative procedures are likely to decrease costs for the industry, and ultimately cut prices for consumers, who in turn will be encouraged to choose a legal path rather than illegally downloading tracks on peer-to-peer websites.

“By easing the licensing process, we are helping the development of legal offers and therefore contributing to the battle against online piracy,” Miyet explained.

Meanwhile, the market is experiencing the emergence of new business models. In April last year, Danish incumbent telecoms operator TDC launched a new offer giving its customers free access to online music. Under the deal, customers can access the catalogues of big labels as part of their monthly subscriptions.

“The revolutionary concept is set to strengthen TDC’s position and transform the music market internationally,” TDC said in a statement. “Other telecommunications providers are expected to follow suit soon,” it believes. However, the Danish telecoms company has not seen its number of customers rise yet.

On Thursday (22 October), the European institutions will try to find a final compromise on the telecoms package, which is currently blocked over the issue of Internet users’ rights and anti-piracy measures (EURACTIV 14/10/09).

Music authors' rights in Europe are managed by collecting societies, which draw royalty payments when songs are played live and when they are broadcast on media, including on the Internet.

Thus far, collecting societies have managed authors' rights at national level, but as the Internet grows in importance, a borderless business model is gaining momentum.

Last July, Competition Commissioner Neelie Kroes asked 24 European collecting societies to scrap a clause in their contracts that prevents authors from choosing or moving to another collecting society. The move paved the way for pan-European licensing of music repertoires (EURACTIV 17/07/08).

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