Commission Proposal on a Directive for Term Extension. Some further reflections.

I have recently commented on the proposal of the EU Commission to extend the protection of sound recordings by another 45 years. Originally I had planned to stop here, but copyright is such a fascinating subject that I decided to add some additional comments on recent developments.
 
In 2006, a British company called Rights Agency Limited (RAL) challenged Gramex, the Finnish collecting society representing musicians and record companies in a Finnish court. RAL represents a small number of best selling recording artist including Paul McCartney and Elton John (a full list was never disclosed). According to Finnish copyright law, Gramex is the only agency entitled to collect royalties from broadcasters on behalf of recording artists. RAL demanded that in the future, royalties collected by Gramex on behalf of RLA’s clients should be paid through this agency. Gramex retaliated by demanding that these performers should either join Gramex or receive their royalties through PPL, the British collecting society which has a reciprocal arrangement with Gramex. According to Gramex, there was no reason why the payments should go through RAL.
 
It is easy to find merit in the arguments of both parties. Composers, musicians and record companies today receive a large part of their income from performance royalties. The money is traditionally collected by organisations known as collecting societies. In this way, broadcasters, concert organisers, discos, bars, department stores and anyone else can easily obtain a blanket license to use all types of music in their activities. Rights owners in turn are saved the trouble of negotiating with thousands of users individually.
 
Collecting societies are organised on a national basis, but they cooperate across the borders. If you are a British composer and your music is broadcast in Finland, the money is collected by the Finnish composers’ collecting society Teosto, which remits it to PRS in the UK, which in turn adds it to your annual cheque. The system has worked well for decades.
 
If you are a performing artist, things are not quite so simple. The system works well enough on a national basis, but there are considerable differences in the way collecting societies function. In Scandinavia, the collecting societies use actual playlists obtained from broadcasters as the basis for their payments. All musicians performing on the recordings, featured artists and sidemen, receive their share. In Germany, broadcast royalties have been paid on the basis of record sales. In the UK, as far as I know, sidemen previously did not receive anything. There are no published studies of such practices; in many cases they are considered trade secrets.
 
Although all EU member states have similar copyright laws, collecting societies representing performers and record companies do not cooperate fully. If you are a Finnish artist and your record is broadcast in France, there is no way you can actually collect. The system works between the Scandinavian societies and a few other partners, but if your record is played in Germany, you have to contact the German society GVL directly.
 
There are historical reasons for this state of affairs. All collecting societies have a residue of unclaimed money, because the rights owners cannot be properly identified or other similar reasons. This money is then divided between the society’s domestic customers, who have a vested interested in keeping things this way, but it is easy to understand by a Paul McCartney or Elton John, whose records will be broadcast in all EU member states, would want to hire an agent to look after his royalties.
 
But if Elton gets paid directly, what about the bass player on his records? The Finnish collecting society may not even know his name and bank account number, because only the record company and the British collecting society have this information. The number of accompanying musicians playing on a record might even affect the share which is due to Elton, because the money collected for the plays of an individual track will be shared by all participating musicians. If every musician uses a different agency, things will really get complicated. It is clear that there is no easy solution to this question.
 
In November 2007, Rights Agency withdrew its claim from the Helsinki court. Obviously the parties had reached an agreement, but Gramex has declined to comment on this in public. Copyright is not simple.
 
Additional comments can be found in my previous blogs
 
http://blogit.yle.fi/node/2230
http://blogit.yle.fi/node/2234
http://blogit.yle.fi/node/2240
http://blogit.yle.fi/node/2242
http://blogit.yle.fi/node/2251
 
 
Pekka Gronow is sound archivist and adjunct professor of ethnomusicology at the University of Helsinki. He is the author of numerous books and articles on the recording industry, including “An International History of the Recording Industry” (2000).