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Brussels, 12 October 2005

Music copyright: Commission recommendation on management of online rights in musical works

The European Commission today adopted a recommendation on the management of online rights in musical works. The recommendation puts forward measures for improving the EU-wide licensing of copyright for online services. Improvements are necessary because new Internet-based services such as webcasting or on on-demand music downloads need a license that covers their activities throughout the EU. The absence of EU-wide copyright licenses has been one factor that has made it difficult for new Internet-based music services to develop their full potential.

Internal Market and Services Commissioner Charlie McCreevy said: “Today we have made workable proposals on how licensing of musical work for the Internet can be improved. I want to foster a climate where EU-wide licenses are more readily available for legitimate online music service providers. These licenses will make it easier for new European-based online services to take off. I believe that this recommendation strikes the right balance between ease of licensing and maintaining the value of copyright protected works so that content is not available on the cheap. In the interests of better regulation, for the time being and as a first step, I am making a recommendation as to how the market should develop. I will be monitoring the situation closely and, if I am not satisfied that sufficient progress is being made, I will take tougher action.”

In order to improve EU-wide online licensing of music, the Commission considered three options: (1) Do nothing; (2) improve cooperation among collecting societies allowing each society in the EU to grant a EU-wide license covering the other societies’ repertoires; or (3) give right-holders the choice to appoint a collective rights manager for the online use of their musical works across the entire EU (“EU-wide direct licensing”).

Stakeholders were consulted on the three options in July 2005 (see IP/05/872). 85 stakeholders, from right-holders, rights management societies and commercial users, submitted their opinions on the three options. There was broad consensus that Option 1 is not an option. Stakeholders are divided between Options 2 and 3, with commercial users favouring Option 2, the majority of collective rights managers favouring modified versions of Option 2 and the music publisher’s community, the independent record labels and certain collective rights managers favouring Option 3.

After analysing the different options and stakeholders’ comments, the Commission recommends that right-holders and commercial users of copyright-protected material should be given a choice as to their preferred model of licensing. Different online services might require different forms of EU-wide licensing policies. The recommendation therefore proposes the elimination of territorial restrictions and customer allocation provisions in existing licensing contracts while leaving right-holders who do not wish to make use of those contracts the possibility to tender their repertoire for EU-wide direct licensing.

The recommendation also includes provisions on governance, transparency, dispute settlement and accountability of collective rights managers, which should introduce a culture of transparency and good governance enabling all relevant stakeholders to make an informed decision as to the licensing model best suited to their needs.

See also the frequently asked questions (MEMO/05/369) and:

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