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E.U. Changes Music Copyright Rules, Benefiting Online Stores

By Aoife White
Associated Press
Thursday, July 17, 2008

BRUSSELS, July 16 -- European Union regulators on Wednesday ordered music copyright groups to end a system hindering online music stores from buying E.U.-wide licenses -- helping iTunes's rollout across Europe.

Music downloads in Europe trail those in the United States. Part of the issue is that music rights are sold separately in each European country, which has prevented Apple's iTunes from setting up a single store to service all of Europe. Instead, it has had to seek licenses from each E.U. member state.

The European Commission told music copyright groups -- also called collecting societies -- to end a system that allows artists to collect payments only from an agency based in their country.

The change should also help users get E.U.-wide broadcast licenses for the Internet, cable television and satellite for several countries by using just one collecting society of their choice, the E.U. said.

Regulators said they wanted the national collecting societies to compete across Europe, adding that having to prove the quality of their services should make them more efficient.

The E.U. executive branch found the 24 collecting societies guilty of breaking antitrust rules, but did not impose any fines. The collecting societies are members of CISAC, the International Confederation of Societies of Authors and Composers.

E.U. spokesman Jonathan Todd said ending CISAC's sales restrictions would not affect the amount of royalties artists received.

Musicians make money after they register copyrights with collective rights managers. Those managers then license songs to online services, radio stations, nightclubs and other outlets.

Some European artists have claimed that selling music rights across the E.U. might reduce their royalties. They threatened that any major E.U.-ordered reform would lead them to refuse to allow their work to be played.

More than 220 singers, musicians and composers -- including the Bee Gees' Robin Gibb, Sade, Julio Iglesias and Mark Knopfler -- have signed an appeal saying pan-European music licensing will stifle creativity.

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