Extended Collective Licensing
Warsaw,, 17 March 2016
Lauri Rechardt ,
Director, Licensing & Legal Policy
IFPI
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Licensing of rights for digital services
Artist concludes a contract
with the a record company,
records her performance,
transfers her rights to the
company, and company
agrees to pay royalties
Authors’ rights are
licensed by
collecting societies
or publishers
directly
The record company
concludes agreements with
users, for the artists rights
they have acquired and for
their own rights
Digital services obtain
both performers’ and
record companies’ rights
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Record companies have worked hard to make music
available online to new consumers…
The recording industry has done a tremendous job in
enabling hundreds of digital services and providing
access to over 43 million recordings
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… which has enabled strong growth in digital,
and streaming revenue in particular…
30,000
25,000
Physical
Permanent downloads
Streaming (Subscription + Ad-Supported)
Performance Rights
Synchronisation
Other
20,000
15,000
10,000
USD millions
5,000
-
The Global Trend
• In 2004 digital
services accounted
for 2 % of industry
revenue.
• By 2014 the share
of digital services
had increased to
46 % of total
industry revenue.
• Physical and
download sales are
declining,
streaming is
growing
Source: IFPI. In USD millions at 2013 fixed exchange rates
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Characteristics of the recorded music market
• Transformations from physical to digital, and from ownership
to access
• Revenues from digital services surpassed revenue from
physical sales
• Any distinction between primary and secondary markets
disappearing; everything is consumption, there are no longer
“secondary uses”.
• Revenues dispersed over several sources from vinyl sales to
streaming and synchronization licensing.
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Role of ECL
• ECL is primarily a way to “mop up marginal rights” in order to
provide legal certainty to users and make already effective
and representative collective licensing even more effective.
• ECL can be justified in certain circumstances, but its
limitations should be acknowledged
– It is a limitation subject to three-step-test (in TRIPs, WPPT, etc)
– it may not be applied indiscriminately or with respect to rights and
uses that can be licensed by right holders individually (i.e. licensing of
most digital uses and services).
– It should not be used against industry practice. Governments should
not regulate against the markets, but seek to create fair market
conditions and a level playing field.
– ECL is an enabling tool, but the need to level the markets becoming
pressing
• ECL combined with unrepresentative or poor quality
collective management is a toxic mix.
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Use of ECL in the recorded music sector
• Which of the performers’ and producers’ rights are licensed
collectively?
– Broadcasting (including satellite and cable) & public performance (=
Art 12 RC / Art 15 WPPT).
– Dubbing (reproduction for the above purposes).
– [Private copying levies].
– Certain on-line uses, but as a rule NOT interactive services (streams or
downloads) or distribution of sound recordings.
– Note, record industry CMOs (MLCs) offer already, on voluntary basis,
multi-territory, multi-repertoire licenses for simulcasting, webcasting,
catch up services, and for background music on websites.
• ECL may be helpful to further strengthen the licensing of
broadcasting and public performance licensing, but not
strictly speaking necessary
• Prima facie, ECL has no application for online rights
or uses
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ECL – key questions
• How to reconcile ECL with article 5 of the CRM directive
– Right holders should be free to determine when, where,
and by whom their rights are licensed collectively.
• How to reconcile national ECL provisions with the policy
objective to create a digital single market
– In particular when right holders have already mandated a
CMO to license their rights cross borders, or where
individual right holders have licensed a cross border
service
• ECL encroaches upon individual exclusive rights. How to
ensure compliance with international treaties?
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Thank you!
Please contact:
www.ifpi.org
[email protected]
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