Presentation MBL Digital Rights

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Transcript of Presentation MBL Digital Rights

The Evolution of Digital Rights Licensing

The Evolution of Digital Rights LicensingChallenges and Opportunities10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

OverviewA brief history of digital music rights licensingAnalysis of fragmentation in the European music publishing industryExamination of licensing hubs such as that proposed by PRS, STIM and GEMAOverview of the legislative landscape in EuropeUpdate from the US, including the battle between ASCAP and Pandora10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

Collection ManagementA Short HistoryWhat is a CMOMonopoliesBlanket LicensesWhy Were They CreatedWho Created ThemPerforming RightsMechanical RightsCISAC and BIEMReciprocal AgreementsBaskets of RightsBroadcastHospitalityDigital Reproduction/Mechanical10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

Role of the CMOIdentify potential users Negotiate a license fee with users(commercial and legal negotiations) Collect the license fee from the user Monitor/verify the usage Distribute royalties collected to the individual rights holders Generate standard contracts

10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

From Traditional Society to Collective ManagementCMOs most commonly take care of the following rights where applicable:The right of public performance (music played or performed in restaurants, and other public places);The right of broadcasting (live and recorded performances on radio and television);The mechanical reproduction rights in musical works The performing rights in dramatic works X-US (theater plays)The right of reprographic reproduction of literary and musical works (photocopying) X-USRelated rights (the rights of performers and producers to be compensated for commercially released recordings for broadcasting, Neighboring Rights where applicable.

10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

Built in ControversyAuthors and composers are the original rights ownersCMOs are de facto writers unions often viewed as bulwarks against music publishing bargaining powerThe authors societies are monopolies that cannot be controlled by corporations as their board is essentially composed of individuals Often not sophisticated in newer technologies and innovation barriers to entry for new models-personal experienceIn the UK and the US music publishers have assignments of rights from the author/composer

10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

CMOs in the EUThe collecting societies for musical works in Europe are de facto monopolies. All collecting societies in the EU apply funds for social/cultural contributions. For author/ composer: to collect and distribute royalties fairly and in a timely fashion, management focus on protecting authors rights. The role performed for the music publisher: fast processing of payment with collection and allocation transparency with minimum management costs.

10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

The First 80 YearsTechnological Innovation and the advent of radio and TVIncome growthRate Courts and challenges from the commercial userPressure to keep rates downHistory of Radio and TV Licensing - CableGovernment ControlMonopolies Consent Decrees in the USCultural Deductions-protecting the smallFavoring Local Content Special Rates, Pensions10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

The Last 20 YearsTechnological Innovation changes the gameDigital=technological advancement that erodes CMO relevance in the marketplaceThreatening the Status QuoIncome peaksReceipts decreaseRights owners rebelTransparency and reduced bureaucracyCMO role questioned CELAS, PAECOL AMRA, GMR

10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

European Music Publishing Industry Age of disruption and breakdown of cooperation based on market conditions and P&L issues. Mechanical income recedes. Wheres bottom? The perceived failure of the local CMOs to create value for copyright in a digital agePressure to increase receipts as piracy proliferatesNew on-line and mobile music distribution models enter the market-new content (composition rights) licenses must be constructedDownload to own-mechanical reproduction and performing rightsOn-demand Streaming-performing right and mechanical reproduction rightsCloud Locker ServiceAdvertising based, supportedRing Tone-Ring back toneYouTube10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

The EU Commission

OPTION 1: do nothing OPTION 2: improve cross border cooperation between national collecting societies by eliminating territorial restrictions and discriminatory provisions in the reciprocal representation agreements (in particular customer allocation). OPTION 3: Creation of one stop licensing shops on a pan-European basis giving the rights holder the choice to authorize one or more CMOs to administer digital rights across the EU. The recommendation on collective cross-border management of copyright for online music services went for option 3.

10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

Direct LicensingMajors pull rights, re-aggregate all but digital rightsThe Global Music Repertoire Database (GRD) DOAStakeholder driven CMOs crown jewelsEU Commission steps in to normalize rate negotiation processCross border licensing (labels have doing it since the 60S)Mitigate confusion and prohibit a race to the bottomEMI and CELASOthers major music publishers followGrowing Pains What do the Indies do?10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

Digital Rights LicensingImplications-Cut out the middle manQuestion the viability of blanket licenses and compulsory licensingDocumented usageCensusTransparency 10% administration rates-uncover the hidden costs marketing, advances in the US, local content partiality-pensions etc.Just the beginning as within 10 years most broadcast will be digitalWhy do you need a CMO for digital?

10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

Fewer Licensing Points of Contact For the UserCommercial user driven EU decisions/recommendationsCMOs are in a position to track commercial content usage of on-line and mobile platforms from anywhere. This would allow them to enter the territories of other collecting societies favoring the offering of multi-territory licenses. The societies from smaller countries are concerned about becoming mere agents of the societies from the largest EU countries (in effect, Germany, France, UK). The demise of the sub-publisherPan-regional licensing Major CMOs take control

10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

The Licensing HubsConsolidating licensing points of contact for the userDozens of Licenses needed for EEA alonePan-Regional licensingSocieties fight with their clientsCELAS is created by the then head of EMIMajor music publishers follow suitPaecol-Solar (Sony/ATV when using the tri-society hub for Admin pan EU)K-StarPedlAresaArmonia Hub, SACEM, SIAE. SGAE, SPA, DEAL, Peer Music/Latino, Arisjus, Sabam, Sony/LatinoDealIMPEL10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

PRS-STIM-GEMA HubMajor CMOs in Europe = LicensorsHubs for non-direct licensed catalogueAn extra layer of bureaucracy on top of an already bureaucratic, opaque licensing collection and allocation platform?Zeta and Delta-Front Office, Back OfficeICE Database-Matching ownership informationOwnership data base Combining repertoire from 3 of Europe's biggest music exporters10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

Reciprocal Agreements And Matching RightsCISAC membership A reciprocal agreement is a contract between two collecting societies whereby the societies give each other the right to grant licenses for any public performance of copyrighted musical works of their respective members ECJ Ministere public vs. Tournier case 305/87 ECR 2521 Para 17. Without reciprocal representation agreements, it is impossible to empower a single society for the licensing of the world repertoire. For a publisher to license a DSP matching performing rights must be included Publisher only controls the reproduction/mechanical rightAnglo-American repertoire represents the main body of usage PRS and the US PROs PRS and the pan-regional licensing platforms administered by other CMOs Board approval process-long term relationships10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

EU Commission and LegislationThe challenge: lowering the cost of access to content without compromising right holders income Relatively quite time after a number of recommendations did not resonate after unilateral publisher controlEarly Commission concerns Authors rights and the value of copyright Ease of cross border licensing for the user, ease of use for the consumerThe Industry has been praised for facilitating the licensing process In most cases licensor and licensee agree enough to create a license (sometimes interim but a license nonetheless) Google and Soundcloud Service provider/content provider-Safe Harbor10/4/15Rick Riccobono New Media Law MBL Hot Topics In Copyright Law Conference

EU v USThe two PRO system in the US is considered less efficient and prone to legal uncertainty as large quantities of rights are not available