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Brussels, 7 July 2005

Music copyright: Commission proposes reform on Internet licensing

The European Commission has published an in-depth study on how copyright for musical works is licensed for use on the Internet. It concludes that the main obstacle to the growth of legitimate online content services in the EU is the difficulty securing attractive content for online exploitation. In particular, the present structures for cross-border collective management of music copyright – which were developed for the analogue environment – prevent music from fulfilling its unique potential as a driver for online content services. The Commission proposes options to remedy this situation as only music has the real potential to kick-start online content services in Europe in line with the Lisbon agenda. The study is available at:

Internal Market and Services Commissioner Charlie McCreevy said: “We have to improve the licensing of music copyright on the Internet. The absence of pan-European copyright licenses makes it difficult for new European-based online services to take off. This is why we are proposing the creation of Europe-wide copyrights clearance. Central clearance is not about making content available on the cheap. It offers a model whereby Europe’s creative community will get the lion’s share in revenues achieved online.”

The study examines the present structures for cross-border collective management of copyright for the provision of online music services. It concludes that the absence of EU-wide copyright licences for online content services makes it difficult for these music services to take off. Online music services targeted by the analysis include services provided on the Internet - such as simulcasting, webcasting, streaming, downloading or an online “on-demand” service[1] - and also music services provided to mobile telephones[2]. The study focuses on these services because all of them can be enjoyed across Europe and, in consequence, their copyright needs to be cleared throughout Europe.

It concludes that entirely new structures for cross-border collective management of copyright are required, and that the most effective model for achieving this is to enable right-holders to authorise a collecting society of their choice to manage their works across the entire EU. This would create a competitive environment for cross-border management of copyright and considerably enhance right-holders’ earning potential.

In addition, the right-holder’s freedom to choose any collecting society in the EU would create a powerful incentive for these societies to provide optimal services to all their right-holders, irrespective of their location – thereby enhancing cross-border royalty payments.

The study therefore proposes a series of principles that Member States would have to adhere to in order to develop the above system. For more details, please see the FAQs: MEMO/05/241.

[1] Simulcast: "simultaneous broadcast" of programs or events across more than one medium. Streaming: enables "just-in-time" delivery of multimedia information. Webcast: similar to a broadcast television program but designed for Internet transmission. It is uploaded by the sender and downloaded by the receiver.

[2] There are estimates that 50% of mobile content revenues will be from music. Source: IFPI Digital Music Report 2005.

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