Royalty Fee Ruckus
July 17, 2008
The commission forbid the so-called collecting societies operating in Europe from preventing songwriters from moving to a rival and banned restrictions requiring them to operate only in their national territory.
The societies targeted by the Commission collect royalties from radio stations and other venues to pass on to composers.
Recognizing the "valuable role" that collecting societies play, Europe's antitrust watchdog said it was not fining them for thwarting competition.
The commission said that the decision, which has such societies up in arms, would give composers and lyricists new freedom to choose a collecting society based on their cost and quality of service.
It will also make it easier for music broadcasters to get a license to play music over the Internet, cable and satellite in several countries by going through a single collection society of their choice, according to the commission.
EU commissioner promises cultural diversity
"This decision will benefit cultural diversity by encouraging collecting societies to offer composers and lyricists a better deal," Competition Commissioner Neelie Kroes said in a statement.
"It will also facilitate the development of satellite, cable and internet broadcasting, giving listeners more choice and giving authors more potential revenue," she added.
The CISAC international association of collecting societies blasted the decision saying the membership restrictions had largely already been dropped and the move on territorial monopolies would lead to fragmentation.
However, the association said in a statement that the worst part of the decision is that the commission presented the move as in songwriters' interest, which it said was not the case.
"Loudly and clearly -- but apparently to no avail, the creative community has told the commission that the community remains deeply concerned about a decision which claims to act in the name of creators but which in fact is being imposed on them against their express wishes," it said.
"Time and time again, the creator has pleaded that the commission's proposed course of action will lead to a calamitous decline in artistic creation, cultural diversity and creators' income," it added.
Songwriters threaten to pull songs
However, the new clampdown on the collection of royalties has strongly criticized by songwriters such as Robin Gibb from the Bee Gees who has led threats to pull songs off the airwaves if the new rules go ahead.
"The European Commission is in danger of taking a decision that will cause irreparable harm to the creation of music across Europe," Gibb said in a letter to Commission President Jose Manuel Barroso.
"Major rights holders will withdraw their repertoires and either place them with an agency or agencies giving them the return they expect or they will look towards direct licensing themselves," he wrote.
Gibb's letter was counter-signed by Patrick Doyle, who wrote the music for the Harry Potter films, and French composer Laurent Petitgirard.
"It will be no more Mr. Nice Guy. If we have to declare war, we will do it. We won't let our passion, our music be destroyed," Petitgirard told a news conference.
"We are champions of new young songwriters," Gibb added.
Former Beatle Paul McCartney, Simply Red singer Mick Hucknall, Elton John, Charles Aznavour and Benny Andersson of ABBA have also voiced their opposition to the EU plan which has yet to be formally adopted.
"No precise timing has been decided for a decision -- maybe before the end of July," a Commission spokesman told Reuters.
Fear of fee reduction prompts drastic action
The European Composer and Songwriter Alliance (ECSA) said competition would create a few big players competing on price and drive down fees for authors.
"We can play havoc with what radio stations want. If Robin decided to withdraw his catalogue then radio stations can't play it, end of story," ECSA spokesman David Ferguson said.
Authors get the same per minute airtime fee, but competition could see struggling artists losing out to big names, ECSA said.