| Online Commerce Roundtable Report on Opportunities and Barriers to Online Retailing |
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30 June 2009 - ONLINE COMMERCE ROUNDTABLE REPORT ON OPPORTUNITIES AND BARRIERS TO ONLINE RETAILING - AER COMMENTS The Association of European Radios (AER) is a Europe-wide trade body representing the interests of over 4,500 commercially-funded radio stations across the EU27 and in Switzerland. AER is located at: Association Européenne des Radios 76, av. d’Auderghem, B-1040 Brussels, Belgium AER’s Interest Representative Register ID Number is 6822083232-32. On May 26th, 2009, the “Online Commerce Roundtable – Report on Opportunities and barriers to online retailing” (the OCR report) was published. This report follows two meetings of the Online Commerce Roundtable (OCR) and a call for comments to the “Issues paper” published on September 17th, 2008. AER contributed to this call for comments. Once again, AER welcomes the opportunity to comment on one of the issues addressed by the OCR, crucial for commercially-funded radios: online access to music, and, more broadly, access to copyright protected works. As mentioned in AER’s previous submission commenting on the Issues paper, one of AER’s members’ primary expenses, with respect to both time and money, remains that of copyright clearance. Radio broadcasters across Europe pay over €2.6 billion per year for content, mostly music rights , and payment for these rights is negotiated on a regular basis. Therefore, AER is constantly striving to ensure the best possible copyright regulatory framework for its members. AER repeats its support to the European Union’s goal to “create a competitive single market, where consumers throughout the Union can choose freely among products and services, regardless of national borders”. AER would nonetheless once again like to call the European Commission’s attention to certain commercially-funded radio broadcasting’s specificities. The report indeed usefully highlights concerns of copyright users but doesn’t address entirely commercially-funded radios’ reality. AER would first like to recall that it warmly welcomed the so-called CISAC Case Decision . It is seen as a very positive first step towards a fair and competitive internal market for access to copyrights, and consequently to ensure a rich offer to European listeners. Nevertheless, copyright users, and especially commercially-funded radios, still face a major developing problem: market fragmentation. This can be observed from three perspectives: - fragmentation of payments per use - fragmentation of territorial offers and - fragmentation of the repertoire Commercially-funded radios need access to blanket licences One of the main problems faced by radios across Europe is the fragmentation of payments per use of the same content. First, one should consider that a single programme could be transmitted through analogue terrestrial, digital terrestrial, analogue cable, digital cable, digital satellite, digital online, etc. This same programme can be simulcast, i.e. transmitted at the same time on all these platforms. This phenomenon follows citizens’ changing listening consuming patterns, while audience remains the same. Online radio is just the most recent of these vectors. It is also the most favoured by youth. In order to maintain its unique tie with all its listeners, radios should simulcast on the internet. This does not generate a new share of listeners, it merely prevents from losing existing ones. Having said that, it is important to recall that there is only one effective universal business-model for commercially-funded radio: Free-To-Air / Free-To-Access. This is only possible thanks to advertising funding, which represents 100% of AER members’ revenues. However, these revenues are dropping all across Europe, for two main reasons: the current global economic situation and the ongoing shifting trend towards advertising on the internet. This reinforces the need for commercially-funded radios to diversify their offer. In addition, with the development of digital technology (be it online or on-air), a wide array of offers is possible: new programmes can be webcast, streamed or podcast. For each new concept, an additional layer of fee appears. This adds to the complexity of the copyright payments AER members dutifully abide by every year, and can possibly lead to different interpretation of the rights licenced. Finally, additional administrative costs seem to be added for each new additional layer of fee even if dealt with by the same body. To ensure clarity and fairness, online and offline fees should be carried out under a single blanket licence fee. Similarly, the OCR report explains that “some performing rights societies are not permitting entities that may be entitled to licence mechanical rights on behalf of a particular publisher to also licence the performing rights of their author members, causing a split between the society that is able to licence the mechanical rights and the society that is able to licence the performing rights, adding an additional layer of complexity.” AER therefore welcomes the OCR report’s suggestion of “considering models in which the performing rights always follow the mechanical rights i.e. if one may be licenced by a given society then so can the other. [P]erforming rights societies should not be permitted to refuse to allow the relevant mechanical rights society to licence the performing rights in the same works, whether via sublicence or agency. [M]ore effective bundling of the mechanical and performing rights would allow the licensing of content online to more closely replicate licensing of content in physical formats” . Commercially-funded radios need flexible multi-territorial licences AER considers that multi-territorial licences should be seen as a very positive step towards a true EU internal market and fair competition amongst collecting societies. This will foster better conditions for both copyright holders and users. This should enable radios to choose the proper offer from any collecting society. Fair competition could indeed only take place if copyright users can get a licence for the use of copyright on the territory needed: commercially-funded radios are targeted at local audience, and would consequently make use only of flexible multi-territorial licences. The current situation should not lead to a market where collecting societies offer access to copyright only on a fixed multi-territorial basis: the choice between mono-territorial or pan-European licences would not ensure fair competition amongst collecting societies, and might even equate to additional unsustainable costs. For AER, some statements contained in the report are, in this perspective, incomplete. Thus, one could positively value the following: “the consolidation into a small number of competitive and efficient rights managers, such as collecting societies, for the representation of pan-EU rights should be encouraged” . However, one should not forget that, on the one hand, the content of the offer of these collecting societies should be comprehensive, and, on the other hand, the territorial offer should be flexible. Consequently, AER agrees with the fact that “what is needed is not automatically pan-European licence. For instance, also national licences and licences extending to only some European territories are realities which should be taken into account” , to the extent that users have the freedom to choose which collecting society issues the licence for copyright protected content. Commercially-funded radios need access to the global repertoire The OCR report presents the EU internal online market as an extremely complex environment for online music offers: “in the EU commercial users are obliged to negotiate with a high number of different entities to clear all the rights involved” . AER members are also confronted with this preoccupying situation although European commercial radio is mostly targeted at local, regional or national audiences; language barriers often mean that demand is primarily limited to national, and often regional, boundaries. Traditionally, national or local broadcasters would only have to refer to their domestic collecting society to access the global repertoire . This is increasingly less the case, as important parts of the global repertoire are being withdrawn from collecting societies’ offer across Europe. This is also underlined in the OCR report: “the recent withdrawal of rights from collecting societies by various publishers means that the local national collecting society is no longer able to offer a so-called blanket licence, but rather the various rights may now have to be sought via a myriad of different licences from different licensors” . Initiatives such as CELAS are leading to dangerous fragmentation of the copyright market: to provide its audience with a full range of music styles, commercially-funded radios should now address many different entities, even for their own local position. This entails higher costs, more complexity and, possibly, inability to play certain music. Thus, with the creation of CELAS, and other similar entities, the copyright offer is being divided per publishers. As stated in the report: “from a commercial user point of view, being able to obtain a licence to the global repertoire, even if limited to a particular territory, is more important than having available various multi-territory licences in limited repertoire that together may or may not add up to the entire global repertoire” . Therefore, AER recalls the primary and essential need to ensure that collecting societies are able to licence access to the global repertoire. Furthermore, and equally important, one should not forget that, in order to ensure fair competition amongst collecting societies, the latter should all be given the ability to licence access to the global repertoire. If only certain collecting societies are able to do so, the market is likely to soon become an oligopoly. So, AER strongly welcomes the statement: “publishers should not be allowed to refuse to licence their rights to collecting societies, with that society having a right to sublicence to users […] or to other collecting societies via reciprocal agreement. [T]his would allow collecting societies to reconstitute licences that cover substantially all relevant right holders’ repertoires” . Finally, the idea mentioned in the OCR report of a central database gathering information on rights ownership is seen as a valuable tool to address part of the problems related to the fragmentation of the repertoire. In the case such a central electronic repository is created, a copyright user would need to “have access to the information in a consolidated form in order for it to know where to go get a licence, and to be sure that it is paying the correct entities for sales in any given work” . Although AER cannot agree with the following statement: “not global repertoire could still be a workable solution if a common database can provide transparency on who offers at which price” . Besides, this should not lead to a situation where radios should pay online copyright fees per track played: radios could simply not exist online. To conclude with, AER would like to re-state: “AER members need actions to facilitate the clearance of rights from a single source as the current structure of multi-payments and multi-clearance is unviable. Commercially-funded radio broadcasters should be able to clear the usage of rights through one-stop-shops, delivering access to worldwide repertoire, for online and offline use: a user should be allowed to purchase whatever rights he requires for whatever purpose wherever he wishes to exercise them from any collective rights’ management organisation in the EU against clear, published, comparable tariffs. The latter should fulfill similar transparency requirements; i.e., any organisation providing access to music rights should publish its tariffs (including split costs of both rights usage and administration fees), the licensing conditions, administrative requirements and the destination of the monies received. Finally, dispute resolution mechanisms should be enabled as appropriate in every Member State in order to prevent abuse of a dominant position by any organisation providing access to music rights.” AER underlines that it is true that the “conclusions of the Group on the issue of online music licensing will have an effect on the market if implemented not only by the participants, but also by other market players, in particular by other publishers and collecting societies” . But, one should not forget that it will equally, if not more, impact on radios, online and offline. ENDS 30/06/2009 Contact details: Frederik Stucki AER Secretary General 76, av. d’Auderghem, B-1040 Brussels, Belgium Tel: +32 2 736 9131 Fax : +32 2 732 8990 This e-mail address is being protected from spam bots, you need JavaScript enabled to view it www.aereurope.org |
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