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Neelie Kroes

Vice-President of the European Commission responsible for the Digital Agenda

Copyright for the Single Market – good for artists, good for consumers, good for the economy

CISAC World Copyright Summit,

Brussels, 7 June 2011

In the early days of the Internet, people talked with wonder of the joy of its "Interactivity". About how the Internet breaks the boundaries between the artists and their audiences, not only enabling creators to access a global audience directly and instantly – but also enabling that audience to give feedback just as direct and instantly. In fact, as British writer Douglas Adams noted, interactivity is nothing new: before the 20th century, all forms of entertainment – be they music, sport, theatre – were interactive, and indeed this was considered so normal as to be unworthy of comment. Therefore, the Internet has not created this interactive link– it has restored it. That it has done so is a positive thing. It's great for artists, and great for their fans. But the legal framework needs to respond.

Almost every week, I receive e-mails and letters from frustrated citizens who would like to legal access their favourite music, films or e-Books. It is hard to know what to say to them. Surely creators would like to spread their art across boundaries, and obtain the credit and royalties they deserve – indeed it is difficult to imagine otherwise.

Artists should benefit from the success of their creations. I think we all agree on that. And European citizens should benefit from offers of innovative content. I hope we all agree on that, too.

We therefore need a copyright system which boosts our creative industries instead of holding them back. We need a copyright system fit for the digital era.

Let me tell you my dream:

- I dream of artists really living from their art;

- I dream of artists embracing the opportunities of the digital era;

- I dream of artists spreading their art around Europe, and the world, if they so wish;

- and I dream of European citizens benefiting from all this.

Some people say that I am for a copyright title, others that I am for compulsory pan-European licensing. Some even say I am against copyright! But the reality is much more pragmatic. I want a European copyright system that enables this dream to be realised: I am utterly neutral as to how we get there.

I only know that time is not on our side: things are moving very quickly out there. The longer we spend being a mere talking shop, discussing and disputing among ourselves, the more we will discover that the world has moved ahead without us.

On that basis, our objective in improving our copyright approach should be to create the legal framework which allows businesses to develop attractive new offers on different platforms and across borders. There will be other implications. These are novel ways for artists to reach their audiences and be paid for it: so, to allow this, the different players in the chain may need to change their role. And functions may need to adapt. But indeed we see that technological developments and changing consumer habits are already exercising an increasing pressure on traditional content production and distribution structures.

So, what is the Commission doing?

The Digital Agenda for Europe is a comprehensive approach to create a Digital Single Market. It is complicated, it may not all go to plan, but it is an important and honest attempt to have us deal with our digital future together.

As we said in the Commission's Intellectual Property Strategy last month, the development of digital infrastructure and the evolving expectations of citizens make an adaptation of the copyright framework essential.

In concrete terms, the European Commission is creating a legal framework to facilitate the digitisation and dissemination of cultural works and will propose legislation to simplify collective management in Europe. We will also launch a debate on the opportunities and challenges of online distribution of audiovisual works. And we will make sure that the copyright enforcement regime is adapted to the digital era.

What should drive these proposals? In making these laws, we cannot simply worry about our own back yard, or today rather than the long-term future. Our real challenge is dealing with the present while leaving the door open to legal innovative distribution channels and attractive consumer experiences. And new technology can help here – if we put it at the service of the artists.

Getting this issue right will also mean success for other areas of the digital agenda. Our ambition is to get Every European Digital. But Europe is lagging behind in broadband high-speed networks: in many cases European users do not see the advantage. They would be ready to pay a higher price, and thus make the business case for investors, if they saw that there is interesting content in the pipes. So, there is a virtuous circle here; having interesting content and services across Europe has a direct impact on our broadband policy.

In Europe, the online audiovisual sector is handicapped by fragmentation, primarily along state boundaries and language borders, but also depending on technological advancement and wealth. This is bad for three reasons. It harms consumer interests and reduces choice. It prevents our audiovisual industry from realising economies of scale and emerging as winners in a strongly competitive global Internet environment. And it does not help in the fight against piracy either. This is why I hope that our Green Paper on the distribution of audiovisual works, due out very soon, will help identify where improvement is needed to achieve a real digital Single Market in this sector.

To all those who lack jobs, to all those struggling to pay their bills, to the artists who searching desperately for success – we have an obligation to support our creative industries. And to do that we have to offer opportunities that reflect our era.

Taken as a whole, the EU has a total GDP comparable to the US. The EU digital economy is growing at 12% a year despite the obstacles we place in front of it. And Europe continues to be a creative powerhouse - Europe provided 14 out of the 20 films selected at Cannes, and music albums which hit the top 10 across the world. Given this, it is a tragedy that our market for digital content is lagging behind.

The US is the largest digital music market in the world. In 2010, almost half of US record companies' revenues were from digital sources. The figure in Europe is a mere 20 per cent, with the market still more reliant on physical sales.

Similarly, the performance of audiovisual markets is much stronger in the US than in the EU. Of the many creative and exciting films created in Europe, experience has shown that only a few of them will reach a wide audience across the continent. Our different languages cannot be the only issue – especially in an era where there are many digital options to overcome this.

In the US, the on-demand video streaming site Netflix is the largest single source of internet traffic in North America. But we have no pan-European equivalent. Likewise, Spotify – founded in Europe, and a European creative success story – is still unable to run a pan-European service. In short, while US companies compete to provide attractive online content experience to millions of consumers, Europe can boast several regional players at best. This has to change.

Of course, films and music are no mere commodities. They require specific production conditions; they address cultural differences and use diverse languages. Foremost, they require willingness to take high risks and they require individual creativity – and when we talk about copyright, we should be prepared to reward this.

In the EU 2020 Strategy, we have committed to create "smart growth"– an economy based on knowledge and innovation.

The further development of the Digital Single Market will give opportunities for creators and new forms of cultural expression. Furthermore, the free circulation of online content and services inside the EU and across its borders will stimulate growth and create jobs.

Smart growth is essential for the cultural and creative sectors and for ensuring that artists can receive a fair remuneration. CISAC itself emphasises that music authors' societies are often boosted by the economic vitality of their own country: look at countries like South Africa, Japan, or Brazil.

So let us again make Europe the best place to create, and let us bring our crown jewel – the single market – to copyright. It is time for us to live up to our European potential. As I have said, I am pragmatic about the solution we need to find. And just as I share your values and passion for the creative arts, so I hope that you will share my pragmatism. If we do it right, the Digital Single Market can boost Europe's economy, boost the diversity of our creative output, and boost artist rewards too.

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