Europe’s Music Royalties Regulations Revised

Proposed European Union plans to end the current European system of collecting music royalties and replace it with regulations geared to the 21st century digital world, have been met with disapproval and consternation among a large contingent of songwriters, composers and musicians. Many artists view their music as being very personal and something which they should have exclusive control over. Music royalties, therefore, have traditionally served as a strong link to individual composers and songwriters who own the exclusive copyright to their creation.

An appeal from more than 220 musicians has been lodged with the EU in protest of the proposed music royalty changes. Julio Iglesias, Paul McCartney, Ennio Morricone, Charles Aznavour, Robin Gibb, Maurice Jarre, Mark Knopfler, Michele Legrand, Sade and David Gilmour are among the musicians who are of the opinion that pan-European music licensing will deal a death-blow to creativity.

Thousands of composers and songwriters rely on national organizations to enforce the copyright system and collect royalties on their behalf. Many of these artists believe that without these collecting societies they would not be able to keep track of when and where their music is used and could lose out on the financial benefits of their creativity. Although the public may be inclined to think of royalties paid to high-profile stars, there are many low-profile, but nonetheless talented, composers and songwriters whose music may be used in a public medium, such as on television shows, for which they should rightfully be paid royalties.

European Union competition regulators want to put an end to the current system in Europe where royalty collecting societies have domestic monopolies. The new regulations will mean that collecting societies will have to compete with one another for the right to protect an artist’s copyright. It is anticipated that this move will result in a decrease of inflated administrative costs, as well as stimulating a cross-border flow of music.

Neelie Kroes, the European competition commissioner, is of the opinion that the current collecting societies restrict competition between one another, cementing their monopolistic positions. The new regulations, which are likely to come into force in the very near future, will eliminate current rules which prohibit composers and songwriters in one country from joining a collecting society in another country.

It is generally agreed that the new regulations will benefit digital services, such as Apple’s online music store iTunes, by enabling them to sell from a single website in Europe, as opposed to the current system with websites carrying different products for different countries. However, just demolishing an existing network of agreements between collecting societies without first establishing new rules for the cross-licensing of artists’ work across borders is likely to be problematic.

The decision to implement new regulations has not been taken lightly, but is the culmination of an investigation by European antitrust authorities that started in 2000, when European broadcaster, RTL Group, experienced ongoing difficulties in obtaining licenses to broadcast across several European countries. The validity of the investigation was given impetus in 2003 when the digital broadcasting and online music service company, Music Choice, complained about the cumbersome and expensive administration involved in obtaining permission from each national collecting agency for program transmission permission. Music Choice management is among those who are satisfied with the outcome of the investigation which utilizes available technology in an increasingly tech-savvy world.

Despite any objections that may be raised, it is likely that the EU’s new music royalty regulations will be implemented in an effort to keep up with technology which is relentlessly consolidating the world into a global village.