Review of the EU Copyright Rules – AER Comments

2014 – REVIEW OF THE EU COPYRIGHT RULES
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,
1040 Brussels,
Belgium

AER’s Interest Representative Register ID Number is 6822083232-32.

On December 5th, 2013, the European Commission published a Public Consultation on the review of the EU copyright rules. AER welcomes this new consultation.

AER needs to first highlight that the comments provided in this position paper are all meant to tackle issues related to the audio / sound-only world. As illustrated in the course of the Licences for Europe discussions, the radio environment is neither audiovisual, nor music-only: it is an environment where sound-only usage / non-retail prevails. Radios across Europe do need a sectoral approach to tackle their concerns regarding authors’ and neighbouring rights. From this perspective, one should recall that radio’s business model in Europe is based, now and for the foreseeable future, mainly on broadcasting of free-to-air programmes. Digital technology (be it online or broadcast / on-air) for radio is slowly taking up across Europe at different national paces. Therefore, 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.

AER therefore would like to commend the Licences for Europe initiative from the European Commission, which enabled awareness-raising on the challenges radios are currently facing online and offline.

Another important point to recall is that 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 .

A last key element to recall is that radios are indeed broadcasters, i.e. both right holders and important right users: one of AER’s members’ primary expenses remains that of rights’ 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. As such, it should be highlighted that radios provide a substantial part of the stable revenues delivered to the music industry. Furthermore, AER is constantly striving to ensure the best possible authors’ and neighbouring rights regulatory framework to enable its members to create the best professionally produced content for their listeners. With changing consumption models, radios have to develop their presence on all possible platforms: in order to maintain audience, radios should be accessible on-air, online, via cable or satellite transmission in a linear and non-linear manner. This entails multiplication of costs for the mere technical presence and maintenance of the presence on a new platform, and to clear access to all protected works. To ensure clarity and fairness, online and offline fees should be carried out under a single blanket license fee, in a transparent manner.

Whilst one of the basic principle guiding authors’ rights and copyrights is contractual freedom, AER would welcome the extension of the principles contained in the Cable and Satellite Directive (Directive 93/83/EEC), as described further in this position paper.

Besides, whilst broadcasters are ‘normally referred to in questions “as right holders“’ in this consultation, most of the answers provided below are taken from the viewpoint of radios as rights users / service providers – if the viewpoint of radios as rightholders is used, it will be indicated in the answer. Finally, AER has only answered the questions relevant to commercial radios.

II. Rights and the functioning of the Single Market

A. Why is it not possible to access many online content services from anywhere in Europe?

2. [In particular if you are a service provider:] Have you faced problems when seeking to provide online services across borders in the EU?

European commercial radio is mostly targeted at local, regional or national audiences; 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 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). At the same time, by its nature, the internet gives worldwide access. The current business model for ‘traditional’ radio stations, especially commercially funded stations, does not support worldwide audiences: our programmes – be it news or music, would have little, if any, interest for listeners (or indeed advertisers) located outside a certain territorial range. Therefore, there is currently no significant financial benefit to be heard on a global scale. It follows that there is little imperative to incur the costs and time involved in securing extra rights / licences for international simulcasting .

However, those radio stations that do wish to operate outside their national boundaries, or that perhaps unintentionally have listeners (e.g. ex-patriots) 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. A radio station transmitting its programmes on the internet potentially has to contact 28 different bodies to clear the rights used, and due to time and financial constraints, this is simply not possible. As a result, those stations concerned with incurring unwanted international right liabilities could be forced to install systems that block the transmission of their programmes outside of their home territory. Territorial restrictions and the subsequent blocking of programmes cannot be an appropriate market solution for radios.

4. If you have identified problems in the answers to any of the questions above – what would be the best way to tackle them?

AER members need legal certainty. However, compulsory multi-territorial licences do not reflect radio business models and would lead to additional unsustainable costs. Furthermore, radios should be able to choose the proper offer from any collective rights management organisation, via fair competition on administrative fees.

The main solution to obtain legal certainty would be that clearing rights in the EU Member State of origin should enable use in all (and worldwide), at least online – if the listening abroad is marginal (5 to 10% of the listening maximum).

Whilst AER would still welcome a possible review of the Cable and Satellite Directive of 1993, modifying the rules for online delivery of sound content, a practice is being developed in the licensing contracts delivered by some collective rights management organisations to integrate the solution illustrated above in the blanket licence delivered to radios at national level at least for the simulcasting of radio programmes. Indeed, simulcasting does not generate a new share of listeners, it merely prevents from losing existing ones. This tackles this problem in a more immediate and flexible manner. AER would encourage this practice on a country by country basis.

In addition, it is important that the licences awarded should 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. Besides, the aim of a radio service is to deliver people with a well-planned and produced mixture of talk, stories, entertainment, news, music and surprises. Furthermore, as commercially funded radios are SMEs faced with a very wide range of expenses linked to the services they produce (cost for broadcasting, studio, staff, etc.), they are not in a position to afford similar licensing conditions as other online-only actors.

7. Do you think that further measures (legislative or non-legislative, including market-led solutions) are needed at EU level to increase the cross-border availability of content services in the Single Market, while ensuring an adequate level of protection for right holders?

As mentioned in the answer to question 4, a solution based on the country-of-origin principle would help enabling radios to obtain legal certainty. Whilst this could be accomplished by way of a regulatory instrument, direct negotiations on licensing could also enable this objective to be attained.

B. Is there a need for more clarity as regards the scope of what needs to be authorised (or not) in digital transmissions?

8. Is the scope of the “making available” right in cross-border situations – i.e. when content is disseminated across borders – sufficiently clear? If no, please explain how this could be clarified and what type of clarification would be required (e.g. as in “targeting” approach or as in “country of origin” approach).

As explained in the answer to question 4, AER would welcome a clarification of the “making available” right in cross-border situations, and would especially advocate a “country-of-origin” principle. The country of origin should be the country where the radio is based offline . However, as mentioned in the answer to question 4, the country where the radio is based offline would not broadly differ from the country “targeted” by the radio programme: a commercial radio’s news, advertising, promotions or language / dialect, even online, are targeted at the local audience where the radio is based offline.

10. [in particular if you are a service provider or a right holder:] Does the application of two rights to a single act of economic exploitation in the online environment (e.g. download) create problems for you?

As mentioned at the beginning of this position paper, radios mainly offer a well-planned and produced mixture of talk, stories, entertainment, news, music and surprises Free-To-Air / Free-To-Access. Radios are massive users of copyright and related right protected works. As they 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 necessary rights is done through blanket licensing with a single entity.

In other words, one should consider that a single programme could be transmitted through analogue terrestrial, digital terrestrial, cable, satellite, online, etc. This same programme can be simulcast, i.e. transmitted at the same time on all these platforms. As mentioned, 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.

In addition, with the development of digital technology (be it online or on-air / broadcast), a wide array of offers is possible: new programmes can be webcast, listened on-demand or podcast. For each new concept, an additional layer of fee appears, with additional administrative cost even if dealt with by the same body. Furthermore, collective rights management organisations for neighbouring rights do not seem to be in a position to provide radios with legal certainty for their online activities. This adds to the complexity of the rights payments AER members dutifully abide by every year, and can possibly lead to different interpretation of the rights licensed. 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, through one-stop shops, and in a transparent manner.

Another important related point to recall here is that, traditionally, national or local broadcasters would only have to refer to their domestic collective rights management organisations to access the global repertoire . This is increasingly less the case, as important parts of the global repertoire are being withdrawn from collective management organisations’’ offer across Europe. Initiatives such as CELAS are leading to dangerous fragmentation of the rights 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 rights offer is being divided per publishers. Therefore, AER recalls the primary and essential need to ensure that collective rights management organisations are able to license access to the global repertoire. Furthermore, and equally important, one should not forget that, in order to ensure fair competition amongst collective rights management organisations, the latter should all be given the ability to license access to the global repertoire. If only certain collective rights management organisations are able to do so, the market is likely to soon become an oligopoly.

11. Should the provisions of a hyperlink leading to a work or other subject matter protected under copyright, either in general or under specific circumstances, be subject to the authorisation of the rightholder?

[Answer provided as a rightholder] YES, but in certain cases only: a link for a freely accessible website presented as a link should not be subject to authorisation. However, a “framed” link, whereby a website pretends the content the link leads to is its own should be subject to the authorisation of the rightholder.

14. [In particular if you are a right holder or a service provider:] What would be the consequences of providing a legal framework enabling the resale of previously purchased digital content? Please specify per market (type of content) concerned.

As mentioned previously, radios mainly offer a well-planned and produced mixture of talk, stories, entertainment, news, music and surprises free-to-air or free-to-online. So they are not faced with problems of sale or re-sale of their services.

However, one important element for radio’s development on the internet is the ability to provide listeners with time-shifted / on-demand / podcast programmes. Many among these programmes feature accessory music: e.g., background music in a café where an interview is being run. This accessory music is protected by authors’ and neighbouring rights and thus entails clearance of rights. The multiple rightholders have to be identified and remunerated. In the case rightholders are not identified and remunerated, the programmes produced have to be abridged from any accessory music before being set online. This is detrimental to the atmosphere of the radio show thus produced. Furthermore, and most importantly, identification and remuneration of the multiple rightholders in accessory music 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 world for other uses. But for the time being the clearance of accessory music in time-shifted / on-demand programmes is not managed collectively. Hence, AER’s proposal to impose licensing of accessory music in time-shifted / on-demand / podcast programmes through mandatory collective management of rights.

E. Term of protection – is it appropriate?

20. Are the current terms of copyright protection still appropriate in the digital environment?

It is not a question of digital environment. As mentioned, AER members need technology neutral authors’ and neighbouring rights regulatory frameworks.

Besides, as mentioned too, radios are right holders.

However, it is clear that the extension of the term of protection for related rights enabled by the European Commission proposal of 2006 was based on flawed justifications (please see references below). AER would strongly recommend at least returning to the status quo ante 2006.

Further explanation can be found in the following studies:

– Institute for Information Law of the University of Amsterdam, The Recasting of Copyright & Related Rights for the Knowledge Economy, 2006:
http://www.ivir.nl/publications/other/IViR_Recast_Final_Report_2006.pdf

– Gowers Report: Gowers Review of Intellectual Property for the UK Government, 2006:
http://www.hm-treasury.gov.uk/d/pbr06_gowers_report_755.pdf

– Max Planck Institute for Intellectual Property, Competition and Tax Law: Comment by Max Planck Institute on the Commission’s proposal for a Directive to amend Directive 2006/116 EC of the European Parliament and Council concerning the Term of Protection for Copyrights and Related Rights, September 10th, 2008:
http://www.ip.mpg.de/en/data/pdf/stellungnahme-bmj-2008-09-10-def_eng.pdf

IV. Private copying and reprography

Even though licensing plays an increasing role in the digital world, the levy system is still necessary to reward rightholders. Where the levy system is in place, AER believes that it should be effective for all rightholders and non-discriminatory.

VII. A single EU Copyright Title

78. Should the EU pursue the establishment of a single EU Copyright Title, as a means of establishing a consistent framework for rights and exceptions to copyright across the EU, as well as a single framework for enforcement?

79. Should this be the next step in the development of copyright in the EU? Does the current level of difference among the Member State legislation mean that this is a longer term project?

An optional single EU Copyright Title could be seen as an interesting long-term objective. However, AER recommends first to promptly solve issues related to licensing, either by regulation or facilitating discussions amongst industry players. This can be done by extending some existing rules (such as the Cable and Satellite rules, and the mandatory collective management of accessory music to online as mentioned earlier in this document), and correctly implementing offline and online existing rules, enhancing thereby transparency and competition in rights’ management.


Radios consist of a myriad of small and medium sized enterprises. Moreover, on-air broadcasting radios reach massive audience on a daily basis in all EU Member States: 80% of the EU population on average listens to radio for at least 2 or 3 hours per day, as shown by national audience measurement. Commercially-funded radios indeed constitute a unique network of small and medium-sized enterprises (SMEs), contributing to cultural diversity, media pluralism, access to creativity, social inclusion. They also offer free-to-air services of general interest:

– they evolve in highly competitive environments
– their programmes encompass, broadly speaking, all possible formats, from debates to
music-only
– As for the music broadcast, within one market, as soon as there is demand expressed, it has to be
fulfilled; so, most of the musical expressions are represented
– most of them are non-politically affiliated, and certainly keep the freedom to express their opinion
or to participate to the public expression of the opinions of their listeners
– their audiences are local, regional, or national
– they strive to develop on all possible platforms
– during natural, major or minor disasters, radio is one of the first tool to inform the public

Radio is the most intimate medium, and has been so for the past 50 years at least: it is indeed ubiquitous, mobile, simple-to-use and free-to-air. All these features enable our audience to cultivate a personal relationship with our programmes, our DJs, our hosts, and our brands. Our listeners thereby access programming they enjoy, and useful information.


AER remains available to explain this position in further details, should this be helpful to the European Commission.

ENDS
05/03/2014

Contact details: Vincent Sneed
AER Manager
76, av. d’Auderghem,
B-1040 Brussels,
Tel: +32 2 736 9131+32 2 736 9131
Fax: +32 2 732 8990
vincent.sneed @ aereurope.org
www.aereurope.org