Brussels, 08 October 2002
Commission clears one-stop agreements for the licensing of TV and radio music via the Internet
An antitrust exemption granted by the European Commission will introduce more competition for European television and radio companies, which simultaneously broadcast music shows on the Internet. Under the new rules, broadcasters can get a single 'one-stop shop' licence from royalty collecting agencies to cover Internet broadcasts across most of the 18-nation European Economic Area (EEA) replacing the old system where they need to secure a license from each national copyright administration and collecting societies. The new system will also boost competition among the societies that collect the royalties on behalf of the music industry notably in terms of the fees they charge.
Commenting on the decision, Competition Commissioner Mario Monti said : « The creation of a legitimate marketplace for so-called simulcasting will benefit both consumers and rights-holders. Consumers will be able to access their favourite radio and/or TV music programmes from virtually anywhere in the world. At the same time, the framework put in place ensures that the rights-holders will be properly paid».
This is the first decision by the Commission concerning the collective management and licensing of copyright for the purposes of commercial exploitation of musical works on the Internet.
Radio and television broadcasters have in the last few years begun to broadcast their programmes via the Internet along with the traditional terrestrial or cable transmission to European homes. This practice, known as simulcasting, requires broadcasters to obtain international licenses from music rights owners.
It should be noted that broadcasters traditionally operate on a national or regional basis under limited territorial copyright licences. Therefore, because of its global nature, the Internet poses a new challenge in the way those rights are acquired.
The present case stems from a notification by the International Federation of the Phonographic Industry (IFPI). The notification was made in the name of the copyright administration societies of music record companies. It does not concern authors' rights, which are collected by different agencies.
The notified agreement is intended to facilitate the creation of a new category of copyright licence with a multi-territorial scope, talking into consideration the global reach of the Internet.
More choice and more price competition
Following the Commission's observations, the collecting societies agreed to grant "one-stop" licences covering all the territories in which the local record producers' society is a party to the agreement. In effect this includes the whole of the EEA (which groups the 15 EU states plus Norway, Iceland and Liechtenstein) except for Spain and France. The agreement also includes societies from Central and Eastern Europe, Asia, South America, Australia and New Zealand.
This means that, rather than being forced to obtain a licence from the local collecting society in every country in which their Internet transmissions are accessed, broadcasters whose signals originate in an EEA member State will be able, for the first time, to approach any EEA-based collecting society of their choice for the simulcast license. This will allow for competition between EEA societies to grant these new multi-territorial licenses thereby contributing to the completion of a European single market.
The parties also undertook to increase transparency as regards to the fees charged for a copyright license. A set of proposals will be presented to the Commission by the end of 2003, aimed at separating the copyright royalty from the fee meant to cover the licensing administration costs of each society. The two elements will be separately identified upon the granting of a licence. This way, TV and radio broadcasters will be able to recognise the most efficient societies in the EEA and seek their licenses from the societies providing them at the lower cost.
The licences will also include the repertoires of all societies party to the agreement.