Music licensing reforms working, EC claims

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BRUSSELS -- Last year's reforms of the music licensing sector are succeeding, with a growing appetite for European Union-wide licensing replacing national applications, the European Commission said Tuesday.

"There is demand for EU-wide licensing, and it is now becoming a realistic option," EU internal market commissioner Charlie McCreevy said.

McCreevy was speaking exactly a year after the EC adopted controversial rules giving artists and groups the option of just one license to sell their music online in the EU's 25 member countries, rather than requiring one for each territory.

"Rather than existing societies competing, EU-wide licenses will be offered by new emerging platforms, pooling the repertoire of several publishers or societies," McCreevy said. "Three such (plans) had already been announced, and many rightsholders are enthusiastic about the new possibilities."

McCreevy said the entire structure of licensing was changing as a result of the new rules as online stores, record companies and broadcasters reassessed their licensing relationships with artists. "We have seen music publishers being offered more seats on the boards of collecting societies -- in line with their economic weight," he said.

One of the reasons given for the EC reforms was that music licensing was archaic and opaque. But McCreevy said that, over the past year, there has been increased financial openness and accountability.

"We have seen more willingness on the part of societies to be open about deductions, including those not related directly to the provision of services," he said.

The rules aimed to create a system ensuring musical rights could be cleared efficiently on an EU-wide basis so the European online market could catch up with that in the U.S. The EC said that the complicated bureaucratic system involving national societies in all 25 EU countries was impeding the growth of such Web-based music services as Apple's iTunes Music Store and Yahoo! Music.

Victoriano Darias, senior legal advisor for GESAC, the European grouping of societies of authors and composers, said the growth of EU-wide licenses would result in a two-tier system: one for Anglo-American music and another for the rest of Europe's local repertoire.

"EU-wide licensing creates other problems, as artists will go to the cheapest society with the lowest copyright protection," he warned.
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