Copyright in the European Union: Collecting Societies
For some time now, I have written on developments in copyright law in the European Union. My main concern has been the proposal to extend the term of neighbouring rights to nearly a hundred years. In a recent blog, I discussed the problems which musicians have in getting paid for the airplay of their records in other EU countries.
The EU Commission has recently announced a decision which targets on the operations of collecting societies representing composers and publishers, such as Teosto in Finland, GEMA in Germany and PRS in Britain. The Commission prohibits the societies from dividing certain activities on a territorial basis.
Collecting societies are organisations which manage the performance and mechanisation rights of composers and music publishers. If you want to organise a concert, the collecting society in your country will issue a license which permits you to perform any copyrighted music for a set fee. Through mutual agreements, national collecting societies represent all other collecting societies in the world, so the Finnish society can also grant licenses for the performance of British music, and vice versa. It is a highly effective one-stop system which has functioned well for more than a century, despite occasional squabbles about the rates and certain administrative practices.
The problem is that the system does not work well in today’s networked word. If you want to start a digital music service with customers all over Europe, you need a licence from all European collecting societies. This is clearly against the spirit of the European Union, and new solutions are needed. The Commission wants to solve the problem by demanding that all collecting societies have to license their repertoire on an EU-wide basis, and claims that this would benefit both composers and the users of music. The decision is limited to digital services and does not apply to live performances or broadcasting.
This sounds fair enough, but collecting societies are not happy with the decision. CISAC, the international organisation of collecting societies writes that “the decision’s approach to territoriality will inevitably lead to a catastrophic fragmentation of repertoire and therefore legal uncertainty to music users.”
What is the problem here? Why cannot collecting societies simply let each other license their total repertoires to users? After all, in the end, the money would flow into the original composers and publishers.
The problem is that collecting societies do not “own” the compositions they represent. They can only assign users rights which they have obtained from the original right owners – composers and publishers. A major part of the most frequently performed songs in Europe are controlled by four large music publishers which are closely connected with multinational record companies. As things stand now, each publisher has made agreements with different collecting societies. If you want to start a European music service today, instead of going to all national collecting societies, you have to go to four large collecting societies with contracts with different publishers, and you still do not have the rights to the total European repertoire.
There is another interesting viewpoint in the statement issued by the Finnish collecting society Teosto. The organisation asserts that it cannot release its entire Finnish repertoire to other societies until it is convinced that it will be properly administered. Teosto fears that certain collecting societies would not be able to survey and report the traffic in music with sufficient detail, and this would harm composers from smaller countries such as Finland.
I have a long experience from the user side in dealing with collecting societies, and I am convinced that they are remarkably effective in administering the rights of their Finnish members. But as Teosto already has reciprocal agreements with all other European collecting societies, the statement seems to imply that all of them are not equally diligent.
This may be true, but the fact is that there is little published research on the actual functioning of collecting societies. As far as I know, the EU Commission has not published any assessment of the potential impact of its decision. I would not be surprised if we find that, in the long run, the decision will benefit the four large publishers and harm the users who want to get access to a broad repertoire of European music. We simply do not know, and I suspect that the Commission does not know, either.
