Digital Single Market – Radio and Copyright – 2017

Digital Single Market – Radio and Copyright

Radio is local, regional or, at the most, national. With the development of new technology, radio increasingly integrates new platforms and develops new offers to maintain its unique relation with its audience: programmes are being broadcast, streamed and offered on demand. Radio’s output, even online, remains the same, also targeted at local, regional or national audiences. Radio is funded by the local, regional or maximum national advertising market. Radio needs to obtain blanket licensing covering all of radios’ activities online and offline from one-stop-shops.

What is radio? Radio is a mixture of audio content which is well-edited and well-produced. Content is Free-To-Air / Free-To-Access, transmitted via wired or wireless means – such as, first and foremost, broadcast, but also cable, satellite or online – and typically consists of talk, stories, entertainment, news, music and surprises.

Radio in a digital environment – The radio environment is neither audiovisual, nor music-only: it is an environment where sound-only usage / non-retail prevails. Most of the listening is still done by reception of broadcast content. As this mode of transmission enables one-to-many access and can influence listeners, national governments grant licences to radios allowing them to broadcast. Radios are thereby very tightly regulated at national level, under all aspects (production of local news, formats, quotas in content, advertising, right of reply, basic identification, masthead requirements, etc.). This means that radio’s existence involves costs related to staff, their studio, broadcast equipment, etc. However, radios have to be present on a multitude of platforms to maintain their audience: online presence does not create new listeners. In practice, radios should be able to obtain, at no additional cost, licences including broadcasting, simulcasting, together with catch-up / on-demand access and podcasting of any online material, including previews, produced by or for the broadcaster which is ancillary to the initial broadcast of its radio programme (blanket licence). As the radios’ payments to right holders are based on a percentage of their revenues, and as commercial radio’s revenues derive almost 100% from advertising, any increase in listenership increases right holders’ remuneration. This should be maintained in the digital era: it is important that the licences awarded remain “radio licences”, covering all types of programmes, online and offline – a radio programme which is transmitted online remains a radio programme, and should therefore not be charged as another service. Radios across Europe indeed need a sectoral approach to tackle their concerns regarding authors’ and neighbouring rights. Radios are both right holders and important right users: one of AER’s members’ primary expenses remains that of rights’ clearance for music. 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 at national level. Radios are using music that is already published and licensed non-exclusively with many other players.

Radio needs copyright to continue offering its programmes to its listeners: As radios are SMEs in their vast majority, they are not in a position to contact several entities for the clearance of the necessary rights. It is essential for commercially funded radios that clearance of the global repertoire is done through blanket licensing with one-stop-shops, in a transparent manner. Discussions on tariffs should continue to be held at national level. Any framework for authors’ and neighbouring rights related to radio should encompass both online and offline rights, in order to tackle radios’ current and forthcoming needs: this framework should be technologically neutral. Copyright and related rights or authors’ rights and neighbouring rights are key for commercial radios and cultural and creative industries – as mentioned in the study of the EU Observatory on Infringements of Intellectual Property Rights on the Impact of intellectual property rights intensive industries in the European Union, copyright-intensive industries contributed in 2012 / 2013 to 4.2% of EU GDP and 3.2% of the employment in the EU. One element that is core to the support of the EU creative and cultural industry whilst preserving access to culture is the exception for private copying coupled with appropriate compensation.

Radio needs collective management of rights – An important element for radio’s development on the internet is the ability to provide listeners with time-shifted / on-demand programmes and programme extracts. The music contained in programmes made available on-demand entails obtainment and clearance of exclusive related rights. The multiple rightholders have to be identified, asked for permission, and remunerated. This is a task that cannot practically be undertaken by radios. Collective rights management organisations have the expertise to fulfill this task – they already do so in the offline and online world for linear uses. At least the licensing of such rights for on-demand programmes with only accessory parts of protected music (e.g. reports or interviews with some background music) should be enabled through mandatory collective management of rights.

Radio is language based and needs mono-territorial licences with no need for geo-blocking: on average, 6 to 8% of total listening of radio done online in Europe, and out of this, the listening done abroad is minimal. Language barriers mean that demand is primarily limited to national, and often regional, boundaries. Moreover, in most cases, due to the traditional radio business model, the majority of AER members’ audiences / activities are most likely limited to town / city or regional boundaries (the information delivered relates to local traffic, cultural events or local community policy which is of no interest for listeners from other towns / cities or regions). Radios re-finance their programmes via local, maximum national advertising market. Therefore, radios should only have to license the music rights for their market, their national territory. At the same time, by its nature, the internet gives worldwide access. However, there is no financial benefit for radios to be listened to on a global scale. Those radio stations that (unintentionally) have listeners accessing their online broadcasts from outside their territory are faced with significant territorial difficulties associated with the different rules and tariffs applying to other Member States. Since radios’ content is usually produced on a non-exclusive basis, territorial restrictions and the subsequent blocking of programmes would not be an appropriate market solution for radios. Compulsory multi-territorial licences do not reflect radio business models either and would lead to additional unsustainable costs. The main solution to obtain legal certainty would be that clearing rights in the EU Member State of origin should enable use in all EU (and worldwide). Whilst a possible review of the Cable and Satellite Directive of 1993 is still welcomed, contractual solutions with collective rights management organisations on a country by country basis constitutes an interesting solution.

Radio needs clarity on linking / embedding – As many other media, radios have developed activities online, and provide access to third party content via links on their websites. A link for a freely accessible website presented as a link should not be subject to authorisation. However, a link or an embedding using the “framing” technique, whereby a website appropriates the content of third parties systematically as a business model, should be subject to the authorisation of the rightholder. This should apply for instance to third party aggregators of radio stations since they use and exploit the rights of third parties comparable to a cable operator. Due diligence should be required from intermediaries regarding content posted on their online properties. AER would welcome clarifications from the EU institutions on these points.

The transposition and implementation of the Collective Rights Management Directive should enable streamlined, more efficient and more transparent management of collective rights’ management organisations – Tariffs should fulfill similar transparency requirements; any organisation providing access to music rights, on a domestic or multi-territorial basis, should publish their tariffs (including split costs of both, rights usage and administration fees), the licensing conditions, administrative requirements and the destination of the monies received. 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.

The current term of protection for related rights should not be further extended – it does not make economic sense as repeatedly shown in past studies. The main beneficiary of an extended term of protection was the music industry and in particular record labels. Radios are also related rightholders and have not benefitted from the extension decided in 2011.

Reproduction rights clearance by radio does not make sense in a digital world – In order to play music, radios need to copy the protected works they are using on their servers, be it for online or offline transmission of their programmes. Whilst the music received used to be sent with physical copies, it is now sent by electronic means. There is therefore no more transformation of the vehicle used to obtain the music re-transmitted by the radios. The making-available of these pieces of protected works is already dutifully paid by radios on a regular basis, for both online and offline. However additional payments for reproduction rights are no longer justified.

Contact: Vincent Sneed, AER Director Regulatory Affairs / vincent.sneed @