EU attempt to improve royalties system for musical copyright

On the 11th July 2012, the European Commission presented a draft bill aimed at the elimination of music piracy as well as strengthening copyright protection for music. The main target of this bill is to ensure that companies managing music rights would pay royalties to the artists they represent in a shorter timeframe.  It is known that the draft law currently proposes giving collecting societies a 12 month period after the financial year in which the performance took place to pay the artists. This is effectively half the time that is available to them under the existing system. It also calls for more transparency in the way that these payments are carried out.

This draft law has been proposed in wake of the defeat of ACTA which was refused by the European Parliament in the previous week. It can be presumed that this will be the first of many similar bills to come attempting to improve the enforcement of copyright in the EU territory.

The general reaction by musicians in this regard has been lukewarm at best.  It has been said by some musicians that the draft law would effectively only release a miniscule fraction of the royalties they are owed. It has also been criticised for omitting royalties for activities like ‘gigging’, performance in clubs as well as private copying.

This was the second attempt by the Commission with the objective of bringing collection societies in line. The latter are companies aimed at managing music rights and collecting the fees due to singers, producers, composers and any other person contributing to a piece of music when played or performed. In Malta’s case, this function is carried out by the ‘Performing Rights Society’ which has been approved by the Commerce Department to carry out this function with respect to music.

According to Reuters, the official opinion of EU regulators in this area is that poor financial management of collecting societies’ revenues, among other problems, has weakened the institution of copyright in the EU. This has made the EU a prime breeding ground for websites staging the distribution of pirated music and other copyrightable content.

In order to address the EU’s internet situation with respect to music piracy, the Commission has inserted the intriguing proposition into the draft to make it easier for legal websites that stream music such as ‘Spotify.com’ to acquire licences which cover multiple countries. This will allow both a quick proliferation of an artist’s work while ensuring that the source of that work respects copyright and royalty laws. Furthermore, if artists cannot get a collecting society to license their work in multiple countries, they will retain the power to grant their own licences, taking after the business model popularly used in the United States.

The draft is currently in the process of being voted upon by the European Parliament and being approved by the Member States.

For further assistance regarding copyright for music or any other works, kindly contact GVZH Advocates here.