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Management of online rights in musical works

This Recommendation proposes measures to improve the licensing of online music across the European Union (EU). In particular, it recommends that right-holders and commercial users of material protected by copyright or related rights should be given a choice as to their preferred model of licensing. The aim is to make EU-wide licences more easily accessible to online music service providers and thus help these services to take off in Europe.

ACT

Commission Recommendation 2005/737/EC of 18 May 2005 on collective cross-border management of copyright and related rights for legitimate online music services [Official Journal L 276, 21.10.2005].

SUMMARY

This Recommendation on the management of online rights in musical works puts forward measures for improving the EU-wide licensing of copyright and related rights for legitimate online music services. Improvements are necessary because new Internet-based services such as "webcasting" *, "streaming" * or on on-demand music downloads need a licence that covers their activities throughout the EU.

Relations between right-holders, collective rights managers and commercial users

Right-holders * should be able to able to entrust management of the rights necessary to operate online music services, on the territorial scale of their choice, to the rights manager * of their choice. The choice of such a rights manager should be possible irrespective of the latter's Member State of residence or nationality.

As regards the licensing of online rights *, the relationship between right-holders and collective rights managers, should be governed by, at least, the following:

  • right-holders should be able to determine the online rights to be entrusted for collective management;
  • right-holders should be able to determine the territorial scope of the mandate of the collective rights managers;
  • right-holders should have the right to withdraw any of the online rights and transfer the management of those rights to another collective rights manager, irrespective of the latter's Member State of residence or nationality;

Collective rights managers should inform right-holders and commercial users * of the repertoire * they represent, any existing reciprocal representation agreements, the territorial scope of their mandates for that repertoire and the applicable tariffs.

Collective rights managers should grant commercial users licences on the basis of objective and non-discriminatory criteria.

Equitable distribution and deductions

Collective rights managers should distribute royalties charged on downloaded online music to all right-holders or the category of right-holders they represent in an equitable manner.

Contracts between collective rights managers and right-holders should specify whether any deductions from the royalties are to be distributed for purposes other than for the management services provided. Such deductions should be specified to right-holders upon payment of the royalties.

Non-discrimination and representation

The relationship between collective rights managers and right-holders should be based on the following principles:

  • equal treatment of any category of right-holder as regards all elements of the management service provided;
  • fair and balanced representation of right-holders in the internal decision-making process.

Accountability

Collective rights managers should report regularly to all right-holders they represent on any licences granted, applicable tariffs and royalties collected and distributed.

Dispute settlement

Member States are invited to provide for dispute resolution mechanisms, in particular in relation to tariffs, licensing conditions, entrustment of online rights for management and withdrawal of rights.

Background

At present, licensing of online rights is often restricted to a particular territory. Commercial users needs to negotiate in each Member State with collective rights managers to obtain the right-holder's permission. Thus, the absence of a single EU-wide copyright and related rights licence for online music services may act as a brake on development of such music services.

In July 2005, the European Commission published a study (EN ) (pdf) on the detailed rules for issuing licences to use musical works over the internet. The study concludes that there is a need to reorganise the cross-border collective management of copyright and related rights for the use of online music. To this end, it suggests enabling right-holders to authorise a collective rights manager of their choice to manage their work throughout the EU.

Key terms used in the act
Webcasting: the broadcasting of audio and/or video content over the internet.
Streaming: technology used in webcasting for the broadcasting of audio and video content.
Right-holder: any natural or legal person that holds rights.

Collective rights manager: any organisation the sole or one of the main objects of which is to manage or administer copyright or related rights.
Online rights: online rights cover:
- exclusive right of reproduction;
- the right of communication to the public of a musical work, either in the form of a right to authorise or prohibit, or a right to equitable remuneration. This includes webcasting, internet radio and near-on-demand services received either on a personal computer or on a mobile telephone;
- the exclusive right of making available a musical work, which includes on-demand or other interactive services;
Commercial user: any person involved in the provision of online music services who needs a licence from right-holders in order to provide legitimate online music services;
Repertoire: the catalogue of musical works administered by a collective rights manager.
Last updated: 29.01.2007

See also

Additional information may be found on the " Management of Copyright and Related Rights " page on the EUROPA site dealing with the European Union single market.

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