Tagged: licensing

Calls for a new look at the DMCA safe harbor protection as music companies head back to court in battle against MP3tunes

Talking to rights holders in the run up to the CISAC World Creators Summit in Washington, it seems that few agree that any country has the right balance between certain technology companies’ use of music and the abuse of copyright. Google has been on the receiving end of several legal actions by a number of rights holders that have claimed its online video service YouTube has either not acted quickly enough to remove content when asked, or is using content that it has no license for. Ever-troubling for rights holders is the fact that it is their responsibility to check whether music is being used correctly and not the responsibility of the digital-music service. Continue reading

Has the music industry forgiven Justin Timberlake for his MySpace links and accusations of artist exploitation?

myspace_2452447bDepending on where a musician sits in the music industry value chain, a top-10 list of what’s most important to an unsigned artist will differ greatly to one compiled by a million-album seller. Scratching a living out of music is something tens of thousands of musicians do every day. Although the Internet has opened up the promotion and distribution of music to anyone with a computer, it has also made selling music a lot more difficult as almost every single release in a digital-music store is available for free somewhere online. Continue reading

Is repertoire fragmentation the new enemy of digital-music services in Europe?

Last year the European Commission introduced new proposals for a directive on the collective management of copyright and multiterritory licensing of music. The proposals, which target collection-society transparency and the efficient working of digital-distribution businesses in Europe, are working their way through a series of committees. After that, they must be agreed upon by the European Parliament and European Council of Ministers.

What the directive will not do is interfere with the way music publishers administer their rights. All of the major publishers and a number of independents have withdrawn the rights to certain repertoire for licensing on a multiterritorial basis. Some see these moves as a step towards the creation of a new form of fragmentation, one based on repertoire, rather than national borders. Publishers have long claimed that withdrawing certain repertoire rights streamlines the licensing process. However, music ownership can involve multiple publishers and therefore digital services that want to provide an all-encompassing offering still need to sign more licensing deals than the number of countries they operate in. Continue reading

A short history of the music industry: different formats, familiar names but the same old problems

M&C coverIn the past 20 years or so, all sectors of the music industry have been through massive change. Format transitions, company consolidation and greater scrutiny of copyright and licensing have changed the industry beyond all recognition. But have the changes made for industry improvements, and more important, have the main players learned from their mistakes? The recent discovery of the first issues of Music & Copyright has allowed for a unique look at just how much certain things have changed, and how much they haven’t.

The newsletter’s 20-year anniversary came and went in September, but thanks to a long-standing subscriber, copies of the first 24 issues published have been found and make for interesting reading. Despite containing names that have either long since left the music industry or been swallowed up as part of industry consolidation, the headlines for a number of news stories resonate closely with happenings today. Continue reading

Big differences in splits for digital-music performance and mechanical rights in EU-27

As the issue of multiterritory licensing comes under the spotlight in Europe, differences in rates charged and rights splits will become more evident. Will an EU directive that breaks down national borders be followed by a bigger push for deeper collection-society harmonization across the region?

With publication of the European Commission’s new multiterritory licensing proposals, Brussels’ efforts to harmonize the EU’s digital-music landscape are looking to build on legislation harmonizing authors’ and publishers’ rights that are managed by collection societies. Continue reading

Consolidation in the music publishing sector is set to shake up Pan-European licensing

The European Commission (EC) is planning to publish draft legislation proposals early next year that will include new rules for the cross-border licensing of digital music. For several years representatives of the EC have expressed a mixture of mild irritation and outright annoyance over the licensing process for digital-music services in Europe. The number of such services has grown rapidly in the region, but several service providers continue to bemoan the time-consuming process involved in securing rights to operate in several countries. New business models specializing in digital-music delivery have brought change to collection societies, but according to some service providers, rights remain fragmented, and some providers have questioned whether the major publishers’ Pan-European initiatives have simply added a new layer of fragmentation and complexity to the licensing process, with Europe’s largest collection societies the only ones seeing any benefit. Continue reading

Is NCB the model for future Pan-European licensing?

Last month the Pan-Nordic mechanical-rights-collection society Nordisk Copyright Bureau (NCB) reported a fall in the total amounts collected and distributed to its owner societies for last year. Despite the decline, NCB described 2010 as an important year and one that removed much of the uncertainty over the collection society’s future. Perhaps more important though, is the fact that NCB and its owner societies have shown that collection societies, if left to their own devices, can develop a very workable multiterritory online licensing system. Continue reading

Amazon stirs the locker-licensing debate

Amazon has rolled out a new service in the US that allows users to store music in a digital locker that can be accessed from any PC or Android-powered mobile device. The latest issue of Music & Copyright takes a look at why the launch has prompted a significant amount of debate over its legality. Amazon claims it needs no license for simple remote storage. Continue reading

GEMA’s voting structure comes under scrutiny, but is it any less democratic than other collection societies’ in Europe?

In a country profile of Germany a few weeks ago, we reported that some members of the German authors’ society GEMA members had raised concerns at the unfairness of GEMA’s voting system at its annual conference. To recap, GEMA oper-ates three levels of membership: associated, extraordinary and ordinary (the highest level). These levels define voting rights at its annual conference. In 2009, there were 54,605 associated members, 6,406 extraordinary members and 3,343 ordinary members. Associated and extraordinary members have no voting rights at the annual conference. But in pre-meeting sessions, these two groups can nominate up to 34 representatives to participate in, and have voting rights during, the annual meeting. A proposal to raise the number of delegates from the associated and extraordinary membership from 34 to 42 was made at last month’s annual conference, but a decision on the proposal was been postponed until next year’s annual meeting.

After the concert promoter Monika Bestle filed a 106,000-signature petition last year, a hearing in May at the German Bundestag concluded that GEMA’s internal voting process was not well balanced. But is GEMA any less democratic than the other collection societies in Europe? Moreover, could members of other collection societies who are not eligible to vote at their annual general meetings cite the unrest at GEMA as reason for change in their national collection society?

PRS for Music in the UK and SACEM in France are two of Europe’s largest collection societies. PRS divides its membership into three tiers: full, associate and provisional. Of the total membership of 63,129, full members, which numbered 4,172 at the beginning of this year, have multiple voting rights; associate members (17,175) have a single vote; and provisional members (41,782) do not vote. The qualifying criteria for admission to each category of membership are based on a member’s earnings in the previous year. If earnings meet the threshold, which is defined as a set percentage of the total amount distributed to PRS members the year before that, the member is promoted to the next category of membership. Full members have a standard 10 votes. They qualify for an additional 10 votes if they have been a member for at least 20 years and during that time have received an aggregate number of distributions from PRS that is at least 10 times the annual qualifying figure for admission to full membership for the previous year or they have been a member for at least two years and during that time have received an aggregate number of distributions from PRS that is at least 20 times the annual qualifying figure for admission to full membership for the previous year.

Like PRS, SACEM has three membership levels for authors, composers and publishers: adherents (members), societaires professionnels (professional members) and societaires definitifs (full members). At the beginning of the year, the total membership of 132,000 was divided among 127,629 adherents, 2,277 societaires professionnels and 2,094 societaires definitifs. At SACEM’s annual general meeting, all members participate in the approval of the society’s accounts and elect the members of the board of directors, which is made up of six authors and two author-directors, six composers and six publishers. All members have a single vote, while societaires professionnels and societaires definitifs each receive 15 additional votes. The board of directors appoints members as societaires professionnels and societaires definitifs.

BUMA and STEMRA in the Netherlands operate as a single company, despite consisting of two separate bodies: Vereniging BUMA (the BUMA Association) and Stichting STEMRA (the STEMRA Foundation). Each has its own members and affiliates and its own board of directors. BUMA’s board consists of 12 members: six composers, three authors and three publishers. Candidates are recommended by the societies of composers, authors and publish¬ers, but members are elected by composers, authors and publishers collectively. STEMRA’s board consists of 12 members: seven composers or authors, four publishers and one member recommended by BUMA. The composer/author members are elected by writer/composer members of BUMA/STEMRA, and publisher members are elected by publisher members only. Voting is on a weighted basis, based on the publisher’s turnover, and any publisher gets a maximum of 10 votes. Once music authors and publishers transfer the commercial exploitation of their music copyright to BUMA/STEMRA, they become members (BUMA) or affiliates (STEMRA) and are eligible to vote. BUMA/STEMRA ended 2009 with about 16,000 members and affiliates.

Italian authors’ society SIAE has author and publisher members from a variety of arts, including the music, literary, drama, opera, visual and audiovisual sectors. It does not categorize members in tiers. Although rights holders can be contractually represented by SIAE, only members are allowed to participate in SIAE’s governing bodies. SIAE’s General Assembly (GA) consists of 64 members, which are elected by all members every four years. The GA, which meets twice a year, nominates the other governing bodies (president, board of directors, section committees, board of auditors, internal audit) every four years. From a total 81,839 “musical” members, 79,154 are authors and 2,485 are publishers.

SGAE of Spain ended 2009 with 96,955 author and publisher members. Its author mem¬bership is divided into the professional categories of music (72,748 members), grand rights (theater, drama, musicals, etc.) (7,371) and audiovisual (8,031). Voting rights are divided between temporary rights and permanent rights, with the number of votes weighted, based on royalty income. For temporary rights, the weighting of votes is dependent on royalty income received in the previous financial year, and for permanent rights the votes are weighted based on royalty income received in the previous five years.

In the latest issue of the newsletter we continue the analysis by looking at SUISA of Switzerland, SABAM of Belgium, AKM of Austria and STIM of Sweden. We also compare European collection societies with those operating in North America and Asia. The conclusion to all this? It would seem that although most collection societies restrict the voting at annual meetings to the most senior or exclusive members, virtually all of them continue to operate with full member support. For the time being at least. As always, comments are gratefully accepted.

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media.

Evidence builds that stronger legal action against file sharing is turning round the fortunes of the music industry

The world is just emerging from one of the worst recessions in history and many countries around the world are only just starting to record economic growth. Despite this, 2009 may be the year recorded music sales started to turn a corner. The question many are asking is, what part has tougher legal played in the turnaround?

The global trade association the IFPI has published figures on the global music industry. Unsurprisingly, physical sales were down and digital sales were up. Digital is not yet compensating for the physical decline so the overall recorded music sales figure was down, by just over 7%. But this year’s report included details of quite a few countries that registered growth in 2009 compared with 2008, 13 to be precise. In six of these, growth in digital sales more than offset the fall in physical sales. In Brazil and Sweden, the sales improvement has been achieved by a rise in physical as well as digital sales.

The Swedish effect
Much has been written of the return to growth by Sweden. Earlier this year the local Swedish IFPI association said that the trade value of recorded-music sales increased 10.2% year-on-year in 2009, to SEK861.4 million, marking the first rise in the trade value of sales since 2000. Although the trade value of digital sales almost doubled, physical-album shipments rose by 7.6%. Extensive media coverage of the implementation of the IPRED law at the beginning of April, which allows rights holders to gain access to an infringing subscriber’s identity details, as well as coverage of legal action against the creators of The Pirate Bay torrent tracker site earlier in the year are thought to have been the main reasons for music sales growth. A GfK study in June last year found that 60% of file sharers had stopped using peer-to-peer networks.

Similar evidence of legal action changing file sharers’ attitudes is evident in France. The publicity surrounding the HADOPI legislation, which allows for the sending of warning letters to Internet users that infringe copyrights, was fairly intense in the second half of last year, a period that also saw a rise in the trade value of music sales. Although the trade value for the full year fell by 3.2% compared with 2008, for the final six months of the year the trade value actually increased by 9.3% compared with the same period in 2008. A similar pattern of growth continued in the first three months of this year with the local trade association SNEP reporting a rise in both physical and digital sales compared with the same period of 2009.

Some doubt over the effectiveness of HADOPI was cast by a study conducted by researchers at the University of Rennes which found that illegal downloading has grown by 3%. The study also found that of the 2,000 Internet users surveyed in Brittany, 5% had stopped file sharing, but 10% had switched from P2P to alternative methods of illegal downloading. The IFPI dismissed the study this as “nonsense” as it was conducted before any warning letters had been sent out.

The evidence grows
In the cases of France and Sweden, most would agree that it is too early to hail tougher legislation as the music industry’s panacea and 2010 results will probably present more compelling evidence. But there are several more countries that have also seen improvements in sales following a move to more rigorous intellectual property enforcement. IFPI sales figures for South Korea in 2009 and 2008 show large sales increases coinciding with the introduction of tough new laws. While South Korea still has some way to go before it reaches the peak year of 1996, when retail sales totaled Won415.6 billion, last year’s sales figure of Won364.3 billion is a significant move closer.

Some countries have experienced a slowing in the levels of falling sales with no new national legislation. For example, Germany has consistently stated that it would not impose any graduated response system to combat file sharing. But German rights holders do have some recourse to protect their intellectual property. To begin with a warning letter is sent to an Internet user identified as infringing copyright. The offender is invited to sign a cease & desist letter and to pay compensation. If there is no agreement on a settlement, the issue is then taken to court. Is it a coincidence that the decline in the trade value of recorded music sales in Germany has slowed at the same time local rights holders have been sending out warning letters? It would appear not. The German trade association the BVMI has recently presented details of a study on the level of file sharing in Germany, which shows it declined last year.

Unpopular in some circles as this may be, there is growing evidence that legislation is having an effect on the attitudes of file sharers. New examples are emerging that illustrate an improvement in music sales following the introduction of tougher measures to control copyright infringement. Although some countries are closing in on the point where sales can’t fall anymore and growing investment in new digital services is leading to increased user interest, it would appear that legislation is the answer, in the short term at least. Do you agree?

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media.