Copyright: more transparency for artists, greater choice of legal music for consumers

On Tuesday 9 July, members of the Legal Affairs Committee vote on Marielle Gallo’s Report on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market.

What are copyright and related rights?

Copyright and related rights are rights granted to authors (copyright) and to performers, producers and broadcasters (related rights) to ensure that those who have created or invested in the creation of music or other content such as literature or films, can determine how their creation can be used and receive remuneration for it.

What is the collective management of copyright and related rights?

An author (for example an author of a book, a composer or a song-writer), a performer, a record or film producer or broadcaster (the holder of a copyright or a related right) can normally choose between individual management (management by the author of a book or by a publisher), or collective management of their rights.

Collective rights management is mostly carried out by collecting societies. Their key activities are:

• to grant licences to commercial users (TV channels, radio stations, online music service providers) on behalf of the rightholders; and
• to collect royalties and redistribute these to rightholders.

Legislating for collecting societies at the EU level

There are more than 250 collecting societies in the EU. In general, there is one collecting society representing all or some of the rights of a category of rightholders in a given Member State: a collecting society for authors, another one for record producers, another one for audiovisual producers, another one for performers and so on. Examples of collecting societies are: SACEM, which handles rights for musical works in France; SABAM in Belgium; PRS for Music, the association of composers, songwriters and music publishers in the UK, and GEMA in Germany.

These companies aggregate the rights of one or several types of rightsholders to give out licenses to commercial users (TV channels, radio stations, service providers online music) on their behalf. They also provide services such as the monitoring of the use of rights, and the collection and distribution of royalties.

This is the first time that the European Union legislates for these companies.

Benefits for rightsholders and consumers

The directive has two parts.

The first part covers all types of collecting societies - music, audiovisual and photocopying. It applies to all areas that are covered by the collective management of copyright and related rights. It contains detailed rules on the organisation, the governance, the financial management and the transparency of collecting societies.

The second part of the text covers the granting of multi-territorial licenses for the online use of musical works protected by copyright. The objective of this second part is to simplify licensing in the music industry to enable the creation of new digital services and new platforms, which will operate throughout Europe.

During the negotiations on her text, Marielle Gallo’s goal was, firstly, to ensure authors receive the best possible compensation, through improving the governance and transparency of collecting societies.

Secondly, to promote the distribution of all repertoires in Europe, which will benefit the digital economy.

Strengthening the artist's rights

This new directive will ensure:

• artists are paid more quickly by collective management societies;
• they will be informed through an annual transparency report of the managing costs of and investments made by collective rights management societies;
• that, as members of a collective management society, they have some control through the general meeting in which they take part - the text strengthens these powers of control;
• artists will have the right to choose which collective rights management society they wish to be represented by.

Easier Europe-wide access to online music services

The digital economy has huge potential for growth. However, an SME that wishes to offer online music services to European consumers has to negotiate with collective management societies in 28 Member states, which is a huge obstacle.

Only the big companies, such as Apple or Spotify, can handle the difficulties.

The new directive will create 4 to 5 regional one-stop-shops so commercial users will only have to deal with one organisation. Through these 'hubs', a collective rights management society will be able to deliver licences for a repertory belonging to another society, following an agreement between the two societies. As a consequence, new digital services will develop more quickly for European consumers.