Moving the single market for online music
Music is everywhere, and the digital age has only increased its presence. Today, (11 July) I am proposing a modernised system of collective rights management that will use the single market – the EU's most powerful economic tool – to distribute music online. This is a crucial adaptation to the world we inhabit, a world in which both supply and demand are increasingly digitised.
The EU's market for digital music services has the potential to produce hundreds of millions in royalties, as well as innovative new opportunities for artists and entrepreneurs.
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Around 1 million authors and over 500,000 of the EU's performers are members of the EU's 250 collecting societies – organizations that aggregate their rights and manage them collectively. Their main responsibilities are to grant licences on behalf of those artists, and then collect and redistribute royalties to them.
Collecting societies are not reaping the revenue they could be, and so the artists they represent struggle as well. This is a clear sign that there is a problem with our current system of collective rights management.
What is at the root of this failure? Providing legitimate services online using musical works is unfortunately not a straightforward task. Collecting societies alone can issue a licence for use of a songwriter or composer's work online, but some only do so for one country. For example, Spotify, in order to be acting legitimately under the current system, needs to obtain up to 27 different licences to provide a track across all of the EU.
The EU's collecting societies have not adapted to the global shift to the digital age. Instead, music pirates seize the opportunities that the online world offers.
I want to change the way collective rights management functions in the EU to best allow artists to reap the full fruits of their labour, and consumers to sample those fruits as well. The existing system makes it far too difficult for music to cross borders legitimately. We must recognize music and the internet cannot be contained and governed within national boundaries, and neither can consumer demand.
The EU is in a singular position to take advantage of the increasingly international demand for diverse creative content. We have dozens of unique artistic traditions in our member states, and we must empower an online single market that allows them to be exchanged across nations.
A freer exchange across borders will allow lesser-known artists access to a broader public, and will recapture the creative originality and diversity that is so unique to our European Union. No longer should a music repertoire be locked into its own territory, and unavailable for use across borders.
I propose establishing an effective online single market for music by establishing new, common rules for two interlinked areas – management and online licensing across borders. My proposal aims, first and foremost, to serve the average songwriter or composer rather than the "star" – and I want to ensure that every artist's interests are fully represented.
Firstly, I want to establish rules of efficiency and transparency in collecting societies, so that artists and producers will have more say, and an improved stream of revenue.
Collecting societies should not be seen as the problem, but rather a tool for a solution, within which we can empower artists and producers to be able to fully protect and profit from their products. With heightened standards for financial management, they will be able to more efficiently and accurately reap their well-earned rewards.
Secondly, I want to make online licensing across borders easier for collecting societies managing the rights of songwriters and composers, so that they can take full advantage of the opportunities of this digital age.
The internet ought to serve as a medium for artists, especially those who are just beginning, allowing them access to a global audience – and allowing that global audience exposure to a new, especially diverse musical repertoire.
My proposal will serve the needs of collecting societies, artists, and consumers simultaneously. We want to clear the path for competition and innovation in a broader, fairer field by setting higher standards for all our collecting societies.
By bringing the single market into the digital worlds, the EU can go a long way toward helping Europe’s creative communities flourish. Only by bringing the single market into the creative and online worlds can the EU enable it to flourish. And only with a strong, successful, and modern single market can the EU maintain its global competitiveness.
The writer is the European Union commissioner for Internal Market and Services.