Submission on the Public Consultation on the Future of the Internal Market Consultation

16 June 2006 – AER SUBMISSION ON THE PUBLIC CONSULTATION ON THE FUTURE OF THE INTERNAL MARKET

The Association of European Radios (AER) is a Europe-wide trade-body of private and commercial radio broadcasters in France, Germany, Italy, the UK, Greece, Spain, the Netherlands, Denmark, Finland, Sweden, Switzerland and Romania. As such, AER represents the interests of over 4.500 private and commercial radio operators.

Since its creation in 1992, AER has actively contributed to the Commission’s work on a variety of issues of concern to its membership including with regard to new developments of the Internal Market. AER therefore welcomes this opportunity to remind the European Commission of the important role played by radio broadcasting in Europe and wishes to use this opportunity to flag up some of the concerns the private and commercial radio industry is currently being confronted with, in particular with regard to IPR regimes in Europe.

Q.7 – Do you consider that the current IPR regimes foster growth and innovation ? In your experience, where is more focus or action needed ?

We estimate that an approximate 9000+ privately and commercially-funded radio stations are currently broadcasting news, music, services such as weather and traffic information, entertainment and cultural programmes to over 456 million listeners across the 25 EU Member States. The vast majority are SMEs broadcasting in analogue form and offering free-to-air programmes to local and regional communities. These are programmes which public service broadcasters, TV or even telecom operators may not provide or may provide only against a fee. Private and commercial radio stations are largely financed by advertising revenues which are (in most cases) their only source of income.

Under inescapable pressures to “go digital”, private and commercial radio broadcasters are increasingly bringing their content to their listeners via new transmission modes such as cable, satellite and the Internet. While on-line services such as Internet simulcasting, webcasting or podcasting are increasingly popular, radio is also preparing its “Second Revolution” after FM in terrestrial distribution: the move towards Digital Radio.

Radio broadcasters are now at the very early stages of this process which, while exciting for the listeners, is expensive and highly complex for the broadcasters who are painfully trying to stabilise their positions and defend revenues in order to pay for the technological and content investments required to “go digital”. This change is taking place in an environment where competition from powerful new players and for advertising revenues is fierce and where some of the regulatory and technological – as well as IPR issues – are still unresolved and are already hampering new developments.

In 2004, AER welcomed the Commission Communication on the Management of Copyrightand Related Rights in the Internal Market as the first encouraging step to improve and facilitate the collective management of rights in the EU. As a follow-up to the Communication, the Recommendation on the Management of On-Line Music Rights proposed by the Commission’s Copyright Unit in 2005 stopped short of dealing with the fundamental and increasingly critical issues confronting our industry and may actually have unintended effects on radios’ attempts to be part of the Information Society for All.

AER has on frequent occasions pointed out to the lack of competition that exists in rightsprovision in the Internal Market and the resulting inequities faced by private andcommercially-funded radio broadcasters across the EU. Our sector pays over €325 millionper year for copyright and neighbouring rights and as such plays an important part in thefunding of the “royalty cake”.

While we absolutely support the need for fair and equitable remuneration for rights owners, we are concerned that the systems currently in place are already blocking new developments and would like to use this opportunity to reiterate some of the points already made on a number of occasions.

Transparency and efficiency of collective management of rights: there should be similar transparency and organisational levels required from Collecting Societies across the EU, in particular regarding the publication of tariffs, the licensing conditions, administrative requirements and the destination of the monies received;

Competition: a user should be enabled to purchase whatever rights he requires for whatever purpose wherever he wishes to exercise them from any Collecting Society in the EU against clear, published tariffs;

Dispute resolution mechanisms: these should be enabled as appropriate in every Member State in order to prevent abuse of a dominant position by a Collecting Society;

• Technologically neutral one-stop-shop: for all music rights – whether analogue or digital, on-line or off-line – the platform is largely irrelevant and any proposal to establish a true one-stop shop (as is the intention of the On-Line Music Recommendation) must cover on-line, off-line as well as digital platforms.

AER would therefore recommend that the Commission pro-actively continues consulting all stake-holders – including rights users – on these reforms. We encourage the Commission to continue in its efforts to reform the collective rights management system and to make proposals which are well-balanced, take fair account of the realities of radio broadcasters and help rather than hinder the development of a vibrant radio industry in Europe with a strong footing in tomorrow’s digital technologies and the expanding Information Society. While we are fully aware of the complexity of the issues at stake, AER is committed to find balanced and future-proof solutions which protect the interests of the rights holders, including in the area of piracy, in order to respond more effectively and creatively to the market needs of the 21st century.

ENDS
15/06/2006

NOTES: Brussels-based AER (the Association of European Radios) represents the interests of 13 national private and commercial radio associations in 10 EU Member States, Switzerland and Romania. The combined membership is of over 4,500 private/commercial radio stations broadcasting to millions of daily listeners across Europe. The AER web site provides further information at www.aereurope.org