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27th Aug 2016

EU targets €6-bn-a-year artists' royalties business

  • Barnier: 'We want these agencies to be properly managed, to be trusted, to offer proper guarantees to authors' (Photo: Thomas Hawk)

The EU has taken a swipe at organisations responsible for collecting up to €6 billion a year in artists' royalties.

Single market commissioner Michael Barnier in Brussels on Wednesday (11 July) unveiled draft new laws for the sector, designed to give artists more control over their money and to make it easier to sell online music across the EU.

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He said several times he is "not pointing the finger" of blame at anybody.

But he noted that the 250-or-so "collecting societies" - which scoop up micro-payments from the Internet or radio and TV stations on behalf of artists in Europe - need "modernisation."

He said many of them refuse to tell artists how much money they have collected, withhold payments for over a year at a time, do not give artists a say in the way they are managed, lack "respect" for artists in general and refuse to issue multi-country licences.

"We want these agencies to be properly managed, to be trusted, to offer proper guarantees to authors, who have the right to get their money on time and to be properly represented in these entities," Barnier said.

He added that the current set-up fosters online piracy.

"It is not surprising that young consumers look elswhere than the legal supply [for online music]," due to the confusing and fragmented nature of the market, the commissioner said.

The draft new law - which now goes to EU countries and MEPs for approval - says the societies must publish normal accounts and pass on royalties within 12 months or less.

They must give artists a role in management decisions and the right to choose which agency represents them in any given country.

They also call for selected societies, which have the IT capability to do it, to issue multi-country licences for online music, worth €4.5 billion a year out of the €6 billion total.

The bill avoids calling for pan-EU licences for songs because this would require a centralised EU rights agency, creating a "de facto monopoly" in violation of EU competition law.

The collecting societies' Brussels-based lobby group, Gesac, welcomed the initiative despite Barnier's harsh words.

Gesac secretary general Veronique Desbrosses told EUobserver on Wednesday she is still analysing details of the bill, but that she also wants to create more trust in the sector and to establish a clear legal framework for cross-border music sales.

"We are not all the same," she added, when asked whether Barnier's bleak description of Gesac members is accurate.

For its part, Younison - an artists' group also based in the EU capital - said the commission's law will "institutionalise" problems in the sector.

It complained in an open letter on 8 July that non-online-related royalties can still be withheld for up to 24 months and kept out of annual accounts.

It also noted that societies will be able to keep hold of what they call "hard to distribute" fees - royalties for artists whom they cannot easily contact (a pot worth €5 billion as things stand) - and to deduct as much as they like for promoting cultural activities in their home countries.

"The directive falls totally short of protecting those it is intended to protect," it said.

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