Direct Pan-European Licensing Deals Making Life Harder for Digital Businesses

5

Last week it was reported that another Publisher, Imagem Music, had chosen to takes its digital rights out of the direct responsibility of Collection Societies, and instead license directly with Dutch company Buma/Stemra, using Collection Societies as its administration agents.

All the Major Publishers have now created similar arrangements.

The move is of course fuelled by extraordinary and understandable frustration at the archaic practices and restrictions of some Collection Societies. These Societies often seem from the outside to have an agenda of their own irrespective of the wishes of members, and major content owners frequently no longer trust such Societies to make licensing decisions for them.

The problem with this kind of initiative from the point of view of business users is that it makes pan- territorial licensing even harder to achieve. Digital services wanting to be licensed for multi-territory activity have to do separate deals for Anglo American repertoire with each of the Majors, and companies like Imagem, and their respective Administration Agents, plus local deals with potentially numerous Collection Societies for local repertoire.

This places extra hurdles on the way to developing sustainable digital businesses in a world where they already have enough barriers to contend with.  Namely, the cumbersome licensing process associated with clearing record rights and the considerable time and expense associated with negotiating licensing agreements generally.   Meanwhile the EU seems no closer to its stated goal of simplifying pan-European Collective licensing.

At a time when deal-making desperately needs to be easier to grow the market for the benefit of everybody, steps like this make it harder.

Clive Rich is one of the UK's foremost professional negotiators, mediators and media legal minds who has closed deals worth in excess of $500m with the likes of Sony BMG, X-Factor, MySpace, 19 Entertainment, Apple and the Royal Opera House. Along with his successful legal and mediation work, Clive is committed to improving the negotiating and deal-making skills of UK entrepreneurs and small business owners which he believes are the true economic growth-engines. Clive's 'Secrets of Negotiation' seminars give individuals the training and tools they need to successfully negotiate and close favourable partnership, financing, licensing and distribution deals, often against more experienced opposition. Clive has also invested in deal-making technology with his successful 'Close My Deal' iphone app which provides a portable set of tools, techniques and tips in a single, powerful mobile application.

Discussion5 Comments

  1. Crispin/Joel – good to see you both commenting on this issue!

    The problem is, Crispin, that not everybody involved is as reasonable as you. In practice having each Major licence separately outside of a Collection Society makes life incredibly difficult for Licensees. Especially as they still need multiple other licences to cover non-major Anglo/American repertoire and local repertoire. This is is a big barrier to entry for digital retailers and it stops all Rights holders potentially making more money. The answer really is to reform the Collection Society system rather than create a parallel universe that bypasses the Societies to some extent but makes for very convoluted licensing arrangements. I realise by the way that reforming the Collection Societies is easier said than done!

  2. «…developing sustainable digital businesses…»

    Musicians and labels want to develop sustainable digital businesses as well, but curiously I don’t see any tech blog talking positively about it. Seems to me that there are not enough journalists graduating from schools these days?

  3. Joel , I cannot speak about your experience but if you are referring to the licences that I think you are then there are two major issues. Firstly that the rights that were said to have been granted to your clients could not, in fact and in law, be granted as they were not within the remit of the one Society that you refer to. This has been confirmed and upheld by the courts. Secondly, and perhaps as a consequence of the first issue, I believe that it is right to say that some rights holders have not been paid. I do not say that the present system is without complication or that it is not burdensome. However any attempt to ignore the complicated ownership of copyright that has been built up over decades would appear to be deluded. All parties should be working together to ensure that licences are in place and remuneration is paid. I believe that this is happening but the solution has to respect the ownership of rights and be agreed to by all concerned, not imposed by unilateral action.

  4. Crispin, I must agree with Clive and disagree with you. As much as you did not like it, the 2005 pan-EU license I negotiated for my client with one Society worked. It required one report in only one format, and all rightsholders were paid faster and with less deductions than the current system that requires more than 30 licenses, different reporting platforms, overlapping claims of ownership and huge delays in distributions to the rightsholders. And, by rightsholders I mean the actual authors.

  5. Clive, You are right that this initiative was born out of the publishers frustration with the societies. However I do not agree that licensing is more difficult as a consequence of the change. Overall, obtaining licenses for publishing rights in Europe is much easier than has been the case historically. The administration of pan-European licences may be complex but no more so than the alternative and in many cases it is simpler. The truth of the matter is that creators and rights holders are getting value for their rights and users are getting the licences that they need.

Leave A Reply