The study “Collecting societies and cultural diversity in the music sector” was commissioned by the European Parliament in order to take stock of recent market developments in the field of music rights management and examine how EU policy on music rights management affects (or might affect) cultural diversity in the music sector. The study was triggered by the need to evaluate the cultural ramifications of the systemic changes that currently take place in the field of music rights management mainly as a result of action taken in the field by the European Commission. The study was coordinated by ELIAMEP and involved in-depth empirical research in five European countries that were selected as ‘case-studies’: Belgium, Germany, Italy, Spain and the UK.
Deploring the long-established practice of collecting societies in Europe to grant territorially limited licenses, that is, licenses commonly restricted on a national basis, over the past few years, the European Commission has sought to promote a music rights licensing policy that reflects the ubiquity of the online environment. Through recourse to soft law instruments and competition analysis, the Commission has taken steps to encourage multi-territorial licensing, so as to support the development of pan-European digital music services.
According to the findings of the study, the Commission’s action has generated various business models for multi-territorial rights clearance. These have essentially pertained to the management of copyright, namely the management of the rights held by composers, authors and music publishers. The management of the rights of performers and record producers (i.e. neighbouring rights) has not been substantially affected.
The new licensing channels that have been created for the provision of EU-wide licenses concern specific types of repertoire, mainly the Anglo-American repertoire. This contrasts the previous licensing system of collecting societies’ reciprocal representation, according to which each collecting society participating in the reciprocal representation network could grant access to the entire repertoire of its affiliated collecting societies on its territory. At present, no multi-territorial and multi-repertoire system is in place.
Most of the business models that have emerged for digital rights clearance have derived from major music publishers. Major music publishers have withdrawn the mechanical rights they enjoy in the Anglo-American repertoire from the system of collecting societies’ reciprocal representation and have entrusted them to specific collecting societies or newly created collective rights management bodies for pan-European digital exploitation. Such a situation seems to have enhanced major publishers’ negotiating power. Major publishers can now negotiate all the conditions under which they mandate a European collecting society or another entity with the pan-European management of their rights for digital exploitations. In addition, they can influence the licensing activity of collecting societies, as regards the management of rights they keep them entrusted with. Fear for additional withdrawals may lead collecting societies to accept ‘preferential’ conditions for the management of major publishers’ rights. Composers, authors and local music publishers do not enjoy the same means to safeguard their interests. This poses a fundamental challenge for cultural diversity.
Cultural diversity could also be impaired if smaller, specialised or less popular repertoires become less available on the market. In the frame of the study, commercial users have complained that they now face a multiplication of negotiations in order to clear rights for a variety of repertoires. Such a situation could lead them to prioritise rights clearance for the Anglo-American repertoire, since this type of repertoire is considered key for market entry, and disregard local or niche repertoires.
This is quite troubling when one considers that the European music market is not as diverse as one would expect it to be. According to the findings of the study, the repertoires of the EU Member States do not develop at the same rate and do not circulate within and outside the EU with the same success. The repertoires of the smaller EU countries and the new Member States do not easily penetrate European and foreign markets. It is in fact the repertoires of the bigger EU countries which generally succeed in generating a substantial number of royalties in the EU and abroad.
EU policy in the field of music rights management, whatever form it takes in the future, should take such a situation into account. What seems indeed to be important for the protection and promotion of cultural diversity in Europe is a mechanism whereby through increased collaboration among collecting societies and other licensing operators, music rights management aims at:
- broad availability and access to a variety of repertoires, including small and specialised repertoires;
- a balanced accommodation of the interests of all right holders
- user-friendly, uncomplicated and comprehensive rights clearance services;
- increased rights managers’ transparency and accountability.
Read the study “Collecting societies and cultural diversity in the music sector “.