Tagged: Pan European

Demystifying Pan-European digital-music rights, second edition

Report coverInforma Telecoms & Media today announced the publication of the second edition of its highly successful report Demystifying Pan-European digital-music rights. The report neatly illustrates what repertoire is controlled by what collection society or licensing hub in 30 of Europe’s most vibrant recorded-music markets. 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 All of the major publishers and a number of independents have withdrawn the rights to certain repertoire for licensing on a multiterritorial basis.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

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

Demystifying Pan-European digital music rights – new report

The number of digital-music services in Europe is growing every year and consumers across the continent are being presented with an array of different ways to listen to music. Digital-music delivery and consumption has undergone a rapid transition. However, such has been the speed of the sector’s evolution, new business models specializing in digital-music delivery across Europe have forced those organizations charged with issuing licenses to rethink the way they operate.

Music publishers and collection-societies in Europe have taken to the task in different ways (see below table for major music publisher initiative details). But, in contrast to a few years ago, when digital-music services were required to negotiate countless licensing deals, agreements between music publishers and collection-societies have reduced the necessity for endless rounds of licensing negotiations. 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

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.

Big problems for CELAS in Germany

The rollout of Pan-European collection societies has run into a bit of a problem in Germany. In a case brought by the German video website MyVideo, the District Court of Munich has ruled that the pan-European collection society CELAS cannot prohibit the reproduction of the EMI MP Anglo-American repertoire it manages for the music publisher. This means that CELAS, and other pan-European collection societies are invalid in Germany due to the fact that the withdrawal of the digital mechanical rights from collecting societies contravenes German copyright law. Not just that, but instead of requesting licenses from each of the pan-European societies, services can obtain the necessary licenses to use content in Germany from the local collection society GEMA. The case, which didn’t receive much in the way of publicity, was concluded in June. CELAS is expected to appeal the ruling.

The case, which was concluded in June in the District Court of Munich, involved the local online video service MyVideo, which operates in the same way to the massively popular Google-owned service YouTube in that it allows registered users to upload videos for streaming. At the end of 2008 MyVideo agreed a licensing deal with GEMA for the period between April 2006 and end-March 2009 for use of GEMA-managed repertoire. The deal excluded content managed by CELAS. Previously, MyVideo had been negotiating with CELAS to license EMI MP repertoire but the parties did not reach agreement.

As CELAS-managed repertoire had been used by MyVideo, legal proceedings were instigated. Fearing an injunction, MyVideo filed a declaratory judgment action in the District Court of Munich (Landgericht München) against CELAS, seeking a declaration that CELAS had no injunction claim against MyVideo concerning reproduction of copyrighted works for online-uses. In response, CELAS filed a cross-action against MyVideo for injunctive relief regarding the making available on MyVideo’s website of 14 individual songs.

As part of its defense, MyVideo stated that the control of mechanical rights in Germany rested with GEMA and that CELAS could not act as a collection society according to the German copyright legislation. This claim stemmed from the rejection by the German supervising authority the Patent and Trademark Office (DPMA) of CELAS’s application to act as a collection society in Germany under the German law for copyright management (UrhWG). CELAS was permitted by the DPMA to operate in Germany as during its application it stated that it only managed the Anglo-American artist mechanical rights for EMI MP. MyVideo stated that CELAS’s claim to be managing just the digital mechanical rights was unlawful in Germany. This is because the process of making available audiovisual content online required not just mechanical reproduction rights, but also the right to make available. Under German copyright law the splitting of the two rights is not permitted.

CELAS asked the court to dismiss the declaratory judgment action and at the same time filed action for injunctive relief. CELAS based its case on the fact that it has previously agreed an exclusive deal with EMI MP to administer the pan-European licensing of certain repertoire as well as the management of its rights. In addition CELAS claimed that it was not a collection society according to the DPMA. CELAS further claimed that according to common law, copyright publishers in common law countries obtained not just derivative rights from the authors and composers but their full copyrights. As such, the making available of 14 songs by MyVideo infringed its mechanical reproduction rights.

In reaching its decision to grant a declaratory judgment to MyVideo, while at the same time denying CELAS its cross-motion for injunctive relief, the court said that even though CELAS managed the pan-European licensing of EMI MP’s Anglo-American repertoire, German copyright legislation applied in this case because its focus was on the question of infringements of copyrights in Germany.

According to the court “the splitting of rights for online-uses, as claimed by Defendant [CELAS], in respect to Anglo-American artists contracting with EMI into mechanical reproduction rights and rights of making available is inadmissible because mechanical reproduction rights (Section 16 of the UrhG) for online uses without the right of making available (Section 19a of the UrhG) does not exist as individual kind of use. This is why EMI Music Publishing Europe Ltd. could not transfer to Defendant the rights which Defendant now claims. This is why Defendant cannot claim injunctive relief against Plaintiff [MyVideo].”

The court stated that a specific kind of use could be licensed according to Section 31 (1) of the UrhG only if the kind of use qualified as sufficiently clearly separable, economically and technically autonomous and unitary use according to prevailing public understanding. Citing German jurisprudence, the court held that reproductions were inherent to the making available of copyrighted works online. If the splitting was admissible and rights would reside with different right holders, users would face substantial legal uncertainty and the risk of double claims regarding a uniform technical process.

Although the court acknowledged that there was a good argument for CELAS to become recognized as a collection society in Germany, the denial of its status as plaintiff meant that this did not need to be decided during these proceedings. The court also did not need to clarify issues such as sufficient proof of chain of rights as well as aspects of antitrust law.

As the case dealt with just the alleged copyright infringement by MyVideo, all other licenses issued by CELAS for use of EMI MP Anglo-American content are, for now, unaffected. Moreover, CELAS’s position with regards to MyVideo remains unchanged in that it believes the video service is operating without the necessary license to use any content forming part of its exclusive licensing deal with EMI MP. CELAS suggests that the decision by the District Court of Munich is restrictive for rights holders, particularly as the management of mechanical rights on behalf of a publisher or group of publishers is an internationally recognized practice. Because of this, the court’s decision is almost certainly to be appealed.

Although the outcome of any appeal will clarify the necessary licensing requirements for MyVideo as well as other German services, it will also impact on all of the publisher models that have operated on the basis of withdrawing their mechanical online rights from the relevant collection societies.

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