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Kernochan Centre for Law, Media and the ArtsColumbia Law School

Collective Management of Copyright: Solution or Sacrifice?

January 28, 2011

“Cross-Border Issues in Collective Management”Adriana Moscoso del Prado

SGAE, Spain

THE “OFF-LINE” WORLD

CISAC + BIEM

RECIPROCAL REPRESENTATION AGREEMENTS

- Territoriality of the license

- National Scope

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THE “ON-LINE” WORLD

2000 CISAC World Congress / 2001 BIEM G. Assembly:

“Santiago & Barcelona agreements

- Territorial scope: Worldwide.

- Licensed repertoire: the sum of the repertoires of the CMS.

- Licensor: The CMS of licensees “economic residence”.

- Most favorable nation clause (MFN).

CMS communicated SA to the EC for validation

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EU.COMMISION REACTION

Statement of Objections (2004):

“Santiago agreements against Art 81 EU Treaty”: - Standardizes the RRA as regard their geographic authority

to license- Absolute territorial national exclusivity for CMS

- Eliminates competition between CMS - Reinforces national monopolies.- Prevents from offering different services.- Prevents the market from evolving in different directions

- Affects trade between member states

EU CMS Terminated the agreementsBack to the “off-line” system

EU COMMISION REACTION

Recommendation. May 18 2005 (DG MARKT)Right holders can:- Join any collecting society in Europe irrespectively of

the economic residence of the right holder or the society.

- Select the territorial scope of a rights management mandate.

- Determine the online rights to be entrusted for collective management.

- Transfer multi territorial management of rights to another CRM

EU COMMISION REACTION

Impact Assessment. 11.10.2005:3 options for cross border collective management of

online music services:

1) Do nothing

2) Eliminate territorial restrictions and customer allocation provisions in RRA (simulcasting)

3) Give right-holders the additional choice to appoint a collective rights manager for the online use of the musical works across the entire EU.

EU COMMISION REACTION

DG COMP. CISAC Decision. 16 JULY 2008

- 2000 Complaint filed by RTL and Music Choice.

- RRA restrict competition by limiting the ability of CRM to offer their services to authors and commercial users outside their domestic territories.

IIMPACT

Several multi-national music publishers have withdrawn online rights for collective management.

EU CRM have renegotiated their RRA (no membership clause, no exclusivity clause, no standardized territorial clause)

All author´s rights are no longer evidently available from collective management societies

Collecting societies compete with each other for repertoires and also territories (except their own)

Pan-European single-repertoire licensors

27 multi-repertoire domestic licensors

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EU CROSS BORDER LICENSING

THE NEW LICENSING MAP IN EUROPE

CELASEMI+GEMA+PRS

PAECOLSONY+GEMA

DEALUNIVERSAL+SACEM

LICENSEE

NCMSNCMS

NCMSNCMS

NCMSNCMS

NCMSNCMS

LATIN ONE STOP

SHOPSGAE

WARNER PEDL

From a fragmented territory to a fragmented repertoire.

Licensing not easier for users (+ 30 licensors):- More transactional costs- More legal uncertainty- Barriers to entry for new businesses

Clearing of rights much more complex for CRM

Risk for cultural diversity

Market: piracy and barriers to growth10

THE CONSEQUENCES

SOME DATA

IFPI RECORDING INDUSTRY IN NUMBERS 2010Digital sales as percentage of trade value

Trade value 2009 (€m) Physical Digital Total Digital as

% of total SPAIN 128,2 22,9 151,1 15%

FRANCE 528,0 94,8 622,8 15%

UK 832,5 212,4 1.044,9 20%

GERMANY 934,4 112,0 1.046,4 11%

EUROPE 3.204,6 557,7 3.762,4 15%

US 1.841,2 1.443,7 3.284,9 44%

SOME DATA

IFPI DIGITAL MUSIC REPORT 2011 1/4 internet users in EU visit unlicensed sites monthly. SPAIN:

45% of active internet users visiting unlicensed services No new artists in the top sales lists in Spain, since 2008 No Spanish artists in the top sales lists in EU since 2007. The market is about one third of its level in 2001. First semester of 2010. Online piracy rate:

MUSIC: 97,8%FILM: 77,1%VIDEOGAMES: 60,7%BOOKS: 35,1%

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HOW DO WE SOLVE THIS

MESS?

From the market The creation of “Hubs”: ARMONIA, ICE... The creation of a Pan European Portal (CISAC) The directive satellite model (EBU proposal)

From the regulator GRD (Global Repertoire Database). EU Digital

Agenda Collective Management Directive. DGMARKT

(passport model)

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SOME ANSWERS

EU CROSS BORDER LICENSING

What´s ahead of us?

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