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 @ aereurope.org

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:

Click to access IViR_Recast_Final_Report_2006.pdf

– Gowers Report: Gowers Review of Intellectual Property for the UK Government, 2006:

Click to access 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:

Click to access 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

– to prioritise the completion and adoption of a new Broadcasters’ Treaty in 2015,

– by directing the SCCR to accelerate and finalise the work on the draft

Treaty text (SCCR 24/10 rev.),

– for submission to the 2014 General Assembly of a text suitable for convening the Diplomatic Conference in 2015

This declaration is available here.

The Copyright Users’ Platform (CUP) is a forum for informal dialogue between representative organisations of major copyright users. CUP members meet regularly to discuss EU copyright policy and have actively debated the recent European Commission proposal for a Directive on collective rights management.

Building on the April 2012 Common CUP principles on transparency and governance of collective rights management organisations and dispute resolution mechanisms, the CUP welcomes the European Commission Proposal for a Directive on collective rights management and appreciates the fact that some key CUP requests have been taken into account by the European Commission.

However the current Proposal for a Directive stops short of fully addressing the possible improvements which could be made to the governance and transparency of collective rights management organisations in the EU. The following document outlines further improvements which should be made to Title II and provisions on dispute resolution mechanisms in the future Directive.

To access the CUP proposed improvements to this Directive, please see here.

Radio is a constitutive element of the “creative content sector” – radios are both rights holders and important rights users. AER therefore welcomes the displayed objectives set by the proposal for a Directive on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market (published by the European Commission on July 11th, 2012). These objectives are to improve management and transparency of entities managing rights, enable dispute resolution mechanisms and licensing solutions for music users.

Radio’s business model is free-to-air / free-online access to radio programmes – AER also welcomes the effective separation of sound from audiovisual rights set in the European Commission proposal. However, the licensing model enabled by this proposal does not address radios’ needs – it falls short of providing the radio sector with a clear approach to the management of right-protected works for sound-only usage. Although radio broadcasters across Europe pay over €2.6 billion per year for content (mostly music rights), they still lack adequate solutions for their online programmes, for both authors’ and related rights. Due to weak licensing solutions and poor conditions to negotiate with entities managing music rights, radios across Europe increasingly find themselves in situations where they cannot pay or play music online. Radio is the most trusted medium as shown in the European Commission Standard Eurobarometer Survey of Autumn 2011 (EB76), and hence needs legal certainty for its programmes, as much as other online services.

In order to enable radios to offer the content listeners are seeking, the proposal of the European Commission should be amended as follows:

Any entity managing any music rights should be subject to the rules proposed by the European Commission aiming at improving collecting societies’ governance and transparency, as well as enabling dispute-resolution mechanisms (Titles I, II and IV) – there should be no exception for entities managing the rights of only one rightholder, for related rights or for small entities. Allowing such exceptions is likely to enable the status quo to continue for radio.

Radio is online as much as offline: any framework should be technologically neutral and ensure blanket licences for all platforms – Commercially funded radios’ business-model is still mainly based on free-to-air FM radio broadcasting. With the development of new technologies, radio must increasingly integrate new platforms and develop new offers to reach its traditional audience: programmes are being broadcast, streamed, webcast and offered on demand. These are new ways of reaching the same audience, so provide no additional revenue. However, for each new technology, collecting societies seek an additional fee, with additional administrative cost even if dealt with by the same entity. Furthermore, collecting societies for related 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 for radios. To ensure clarity and fairness, online and offline fees should be carried out under a single blanket licence fee, in a transparent manner.

Information delivered to rightholders by entities managing rights should also be communicated to rights users, under similar conditions – any rights user should receive the information at least on tariffs (including split costs of both, rights usage and especially administration fees and deductions made for other purpose than administration fees), the licensing conditions, administrative requirements and the destination of the monies received. Radios should be able to choose the appropriate offer from any collecting society, via fair competition on administrative fees.

Licensing solutions only for radios based on the country-of-origin principle should be supported – AER welcomes the European Commission’s acknowledgement of the specificities of radio broadcasters’ services, but the difficulties faced by radios with music rights are not addressed in the current version of the text. For radios, easy-to-handle licensing is seen as a very positive step towards a true EU internal market, via fair competition amongst collecting societies and legal certainty for radios in their online activities. Even in an online environment, commercially funded radios are targeted at local, regional or national audience. They would consequently make use only of one licence valid in all territories where their target audience can pick up the programmes (country-of-origin-principle). This could be facilitated by adding a set of provisions complementing Title III (especially article 33). Such a solution will foster better conditions for both rights holders and users. Compulsory multi-territorial licences do not reflect radio business models and would lead to additional unsustainable costs; besides, the option of commercial agreements should not be precluded.

A strong political signal towards aggregation of music rights should be delivered – for online uses, important parts of the global repertoire are being divided per publishers, and withdrawn from collecting societies’ offer across Europe, due to market movements. With this development, commercially funded radios are bound to address different entities in order to provide their audiences with a full range of music styles. This entails higher costs, more complexity and, eventually, inability to play certain music. For radio, it is essential to ensure that all collecting societies are able to license access to the global repertoire, to ensure easy access for radios and fair competition amongst collecting societies. This signal could be delivered at least in the recitals of the European Commission proposal.

Compulsory collective management of music rights for on-demand programmes with only accessory parts of protected music should be enabled – this would allow radios to set reports or interviews with some background music on-demand / podcasts online. This is indeed an important element for radio’s development on the internet. 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. Collecting societies have the expertise to fulfill this task – they already do so in the offline and online world for linear uses.

Dispute resolution mechanisms should be established as appropriate in every Member State in order to prevent abuse of a dominant position by any entity providing access to music rights – i.e., in Member States where dispute resolution bodies do not exist, they should be set-up. Furthermore, and in any case, these entities should count an equal representation of rights holders and rights users and take fast decisions: one year maximum. These essential elements are lacking in Title IV of the European Commission proposal.

A rights user should be able to purchase whatever rights he requires for whatever purpose wherever he wishes to exercise them from any entity managing rights in the EU against clear, published, comparable tariffs.

Created in 1992, the Association of European Radios (AER) is a trade-association representing the interests of over 4500 private and commercial radio broadcasters across Europe to the EU institutions. It is the only organisation representing only radio to the EU Institutions in Brussels.

Contact:
Vincent Sneed, AER Manager
vincent.sneed @ aereurope.org

Copyrights – Collective management

Radio is a constitutive element of the “creative content sector” – Radios are both rights holders and important rights users. 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. Radio is sound-only and its business model is not retail: Radio broadcasters need a sectoral approach to tackle issues related to management of right-protected works for sound-only usage.

Radio is online as much as offline: any framework should be technologically neutral and ensure blanket licences for all platforms – Commercially funded radios’ business-model is still mainly based on free-to-air FM radio broadcasting. However, with the development of new technology, radio must increasingly integrate new platforms and develop new offers to reach its traditional audience: programmes are being broadcast, streamed, webcast and offered on demand. For each new technology, an additional layer of fee tends to appear, with additional administrative cost even if dealt with by the same body. Furthermore, collecting societies for related 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 radios dutifully abide by every year. To ensure clarity and fairness, online and offline fees should be carried out under a single blanket license fee, in a transparent manner.

Radio needs country-of-origin principle-based solutions for online distribution – For radios, easy-to-handle licensing is seen as a very positive step towards a true EU internal market, via fair competition amongst collecting societies and legal certainty for radios in their online activities. Even in an online environment, commercially funded radios are targeted at local, regional or national audience. They would consequently make use only of one license valid in all territories where their target audience can pick up the programmes (country-of-origin-principle). This could be facilitated via a review of the Cable and Satellite Directive (Directive 93/38/EEC), or a dedicated new regulatory instrument. Such a solution will foster better conditions for both rights holders and users. Compulsory multi-territorial licenses do not reflect radio business models and would lead to additional unsustainable costs.

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. Collecting societies 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 needs access to the global repertoire – For online uses, important parts of the global repertoire are being divided per publishers, and withdrawn from collecting societies’ offer across Europe, due to market movements. With this development, commercially funded radios are bound to address different entities in order to provide their audiences with a full range of music styles. This entails higher costs, more complexity and, eventually, inability to play certain music. For radio, it is essential to ensure that all collecting societies are able to license access to the global repertoire, to ensure easy access for radios and fair competition amongst collecting societies.

Management of all collecting societies should be streamlined, more efficient and more transparent, enabling fair competition – Their 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. Furthermore, radios should be able to choose the proper offer from any collecting society, via fair competition on administrative fees. 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.

A rights user should be able 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.

Created in 1992, the Association of European Radios (AER) is a trade-association representing the interests of over 4500 private and commercial radio broadcasters across Europe to the EU institutions. It is the only organization representing only radio to the EU Institutions.

Contact:
Vincent Sneed, AER Manager
vincent.sneed @ aereurope.org

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 July 13th, 2011, the European Commission published its Green paper on “the online distribution of audiovisual works in the European Union: opportunities and challenges towards a digital single market” (hereinafter the “Green Paper”). AER welcomes this publication. However, AER needs to first highlight that, although this document is intended to identify and address issues related to the audiovisual world, the comments provided in this position paper are all meant to tackle issues related to the audio / sound-only world. Some of the situations presented in the Green Paper and the questions related could indeed easily be transposed to the radio environment: 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 FM broadcasting of free-to-air programmes. Digital technology (be it online or broadcast / on-air) is radio’s future. 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. This could be provided via the forthcoming collective rights management regulatory instrument to be published by the European Commission. AER would welcome the inclusion in this regulatory instrument of principles inspired from the Cable and Satellite Directive (Directive 93/83/EEC), as described further in this position paper.

A key element to recall is that radios are 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 creating 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.

AER therefore once again warmly welcomes the firm will shown by the European Commission to address issues related to the management of authors’ and neighbouring rights. As mentioned, and in the light of potential forthcoming regulatory instruments to be published by the European Commission, AER will only address some questions contained in the Green Paper in order to tackle essential issues for radios, and only from an audio / sound-only perspective:

1. What are the main legal and other obstacles – copyright and otherwise – that impede the development of the digital single market for the cross-border distribution of audiovisual works? Which framework conditions should be adapted or be put in place to stimulate a dynamic single market for audiovisual content and to facilitate multi-territorial licensing? What should be the key priorities?

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 and city boundaries. At the same time, by its nature, the internet gives worldwide access. As explained, 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 rights 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, foreign fans) 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 27 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 must install systems that block the transmission of their programmes outside of their home territory.

These territorial restrictions and the subsequent blocking of programmes cannot be an appropriate market solution. These conditions are prohibitive for those AER members wanting to expand across borders . AER members need legal certainty. However, compulsory multi-territorial licenses 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 collecting society, via fair competition on administrative fees. These principles could be enabled via the forthcoming collective rights management regulatory instrument to be published by the European Commission – this instrument should include principles inspired from the Cable and Satellite Directive of 1993 for online delivery of sound content. In other words, clearing rights in the EU Member State of origin should enable use in all, at least online.

Key priorities for radios development online and offline are:
– Adopting a new regulatory instrument on collective rights management including principles of the Cable and Satellite Directive of 1993 for online delivery of sound content. In other words, clearing rights in the EU Member State of origin should enable use in all, at least online (see also answer under question 5)
– Imposing licensing of accessory music in time-shifted / on-demand programmes through mandatory collective management of rights (see answer under question 2)
– Carrying out online and offline fees under a single blanket licence fee, through one-stop shops, and in a transparent manner – to ensure fairness and clarity (see answer under question 2 and 6)
– One should not forget the primary and essential need to ensure that all collecting societies are able to license access to the global repertoire (see answer under question 2)
– Streamlining the governance and transparency of collecting societies (see answer under question 3)

2. What practical problems arise for audiovisual media services providers in the context of clearing rights in audiovisual works (a) in a single territory; and (b) across multiple territories? What rights are affected? For which uses?

Although radio is a national, regional and local medium, similar problems arise for radios’ clearance of authors’ and neighbouring rights in single territory and across multiple territories. Some of the main problems currently identified for radios’ clearance of online and offline rights are the following:

– Inability (or difficulty) to place time-shifted / on-demand radio services online:
One important element for radio’s development on the internet is the ability to provide listeners with time-shifted / on-demand programmes. However, 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 aren’t 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. Collecting societies 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 programmes through mandatory collective management of rights.

– 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, 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.

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 currently shifting 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 / 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, collecting societies 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. This can be considered as an extension of the right clearance system for cross-border retransmission of radio services by cable on a technology-neutral basis as mentioned in question 6.

– Fragmentation of the repertoire:
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. 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 right offer is being divided per publishers. Therefore, AER recalls the primary and essential need to ensure that collecting societies 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 collecting societies, the latter should all be given the ability to license access to the global repertoire. If only certain collecting societies are able to do so, the market is likely to soon become an oligopoly.

3. Can copyright clearance problems be solved by improving the licensing framework? Is a copyright system based on territoriality in the EU appropriate in the online environment?

AER firmly believes that the EU could greatly help in solving right clearance problems by improving the licensing framework applying to rights in EU countries as described under questions 1 and 2.

Besides the licensing framework, it is essential to streamline the governance and transparency of collecting societies: their tariffs should fulfill similar transparency requirements; any organisation providing access to music rights should publish
– their tariffs in a clear and comparable manner (including split costs of both, rights usage and administration fees)
– the licensing conditions (including the repertoire they represent in an open database)
– administrative requirements
– the destination of the monies received: these organisations must be subject to a clear and strict accounting framework in order to provide full transparency in their bookkeeping, including their cost structure (the costs should always be clearly identified including those for social and cultural funds; cross-subsidy of activities should also be indicated), and on financial transfers between collecting societies as regards the redistribution of fees amongst themselves

Any organisation providing access to music rights should also be submitted to external and independent authorisation and control procedures, especially regarding their published accounts, the respect of their aims and tasks.

Radios should be able to choose the proper offer from any collecting society, via fair competition on administrative fees. 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. These points could be made compulsory by means of an EU Directive or Regulation, as repeated institutional (via soft law and / or cases) calls for collecting societies’ management improvement have remained (at least partially) unheard.

The territoriality of authors’ and neighbouring rights isn’t seen as an obstacle or a hindrance to the development of online radio offers, as long as solutions based on the “country of origin” principle are provided (see also questions 1 and 5).

5. What would be the feasibility, and what would be the advantages and disadvantages of, extending the “country of origin” principle, as applied to satellite broadcasting, to online audiovisual media services? What would be the most appropriate way to determine the “country of origin” in respect to online transmissions?

As mentioned under question 1, European commercial radios are local, regional, or national actors. As listeners expect to access radio via a multitude of platforms, radio services have to be present online. At the same time, internet’s natural setting entails transmission of these local, regional or national services across borders. Extending the “country of origin” principle, as applied to satellite broadcasting, to online radio would have the advantage of providing a simple legal solution to obtain certainty on the provision of their services abroad, and to avoid using counter commercial solutions such as geo-blocking of services to foreign IP-addresses. Further explanation is provided under question 1.

For radios, the country of origin should be the country where the on-air broadcast services are based: clearance of rights in this country should enable at least marginal provision of services across border for the entire EU (and the entire world).

6. What would the costs and benefits of extending the copyright clearance system for cross-border retransmission of audiovisual media services by cable on a technology-neutral basis?

Retransmission of analogue radio services on other platforms can take the form of simulcasting: the simultaneous (or near to simultaneous) retransmission of the same service over a variety of platforms, such as cable, digital terrestrial broadcasting, satellite, and online. Access to rights for simulcasting of radio services on all these platforms should be enabled on a technology-neutral basis. As mentioned in the introduction and under question 5, radio listeners’ consumption patterns evolve and radios have to be available on this variety of platform: simulcasting does not generate a new share of listeners, it merely prevents from losing existing ones. So extending the right clearance system for cross-border simultaneous retransmission of radio services by cable on a technology-neutral basis cannot be presented as a question of costs or benefits: it should be considered as a fact.

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, collecting societies 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 right 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.

AER therefore firmly believes that extending the right clearance system for cross-border retransmission of radio services by cable on a technology-neutral basis would be highly beneficial to radio, without creating a significant audience increase.

9. How could technology facilitate the clearing of rights? Would the development of identification systems for audiovisual works and rights ownership databases facilitate the clearance of rights for online distribution of audiovisual works? What role, if any, is there for the European Union?

Databases gathering information on rights ownership and the bodies in charge of their management is seen as a valuable tool to address part of the problems related to the fragmentation of the repertoire. This could help e.g. for dispute resolutions. Moreover, AER supports any move towards more transparency of collective rights’ management organisations, and certainly the publication of their repertoire; this should be accompanied, at least on an individual basis, by the publication of their tariffs (including split costs of both rights usage and administration fees), the licensing conditions, administrative requirements and the destination of the monies received. Nonetheless, this should not lead to a situation where radios should pay online right fees per track played: radios could simply not exist online.

13. What are your views on the possible advantages and disadvantages of harmonising copyright in the EU via a comprehensive Copyright Code?
14. What are your views on the introduction of an optional unitary EU Copyright Title? What should be the characteristics of a unitary Title, including in relation to national rights?

Harmonisation of authors’ and neighbouring rights or an optional unitary EU Copyright Title could be seen as interesting long-term objectives. However, AER recommends first to promptly solve issues related to licensing and governance of collective rights’ management organisations. This can be done by extending some existing rules (such as the Cable and Satellite rules as mentioned above, and the mandatory collective management of accessory music to online), 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: between 60 and 85% 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
18/11/2011

Contact details: Julia Maier-Hauff
AER Secretary General
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

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 April 27th, 2010, the European Commission published its Green paper on “Unlocking the potential of cultural and creative industries” (hereinafter the “Green Paper”). AER welcomes this publication: it indeed identifies key roadblocks for commercially-funded radios’ development in the digital economy. From this perspective, one should first recall that radio’s business model in Europe is based, now and for the foreseeable future, mainly on FM broadcasting of free-to-air programmes. Digital technology (be it online or on-air) is radio’s future. Therefore, any framework for copyrights, related to radio, should encompass both online and offline rights, in order to tackle radios’ current and forthcoming needs. Moreover, it is essential to bear in mind two important, although evident points: radio is sound-only and its business model is not retail. So, radio broadcasters need a sectoral approach to tackle issues related to management of copyright-protected works for sound-only usage / non-retail.

As rightly mentioned in the Green Paper, radio is a constitutive element of the “cultural and creative industry”. From this perspective, a key element to recall is that radios are both copyright holders and important copyright users: one of AER’s members’ primary expenses 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. 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 copyright regulatory framework to enable its members creating the best “professionally produced content” for their listeners .

As rightly pointed out by the Green Paper, radios, like any CCI, “have to cover the costs of ‘going digital’ […] while also investing in and testing new business models which generate a ‘pay back’ only after some time” . For radios, ‘going digital’ has two different meanings: first, it relates to the possibility to migrate from a satisfying analogue broadcasting technology (FM) to a future-proof digital broadcasting technology. For AER, the latter will have to be chosen by the markets: a choice endorsed by consumers.

“Going digital” for radios also corresponds to the necessary complementary presence of radios both on-air and online. Indeed, 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 all copyright-protected works.

However, and as highlighted in the Green Paper: radios as the “vast majority of the CCIs consist of a myriad of micro-, small and medium sized enterprises” . Moreover, on-air broadcasting radios reach massive audience on a daily basis in all EU Member States: between 60 and 85% 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 .

In the Green Paper, it is indicated that the “Commission particularly welcomes contributions on priorities for action at European level” . For AER, EU regulatory initiatives could prove to be the most useful in the field of copyrights: radios need streamlined access to copyright-protected works. This seems also to be one of the conclusions drawn by the Green Paper, as it stresses that the “Commission will be working on three major policy frameworks, which will have a significant impact on the framework conditions for CCIs in a digital environment” . Out of the three major policy frameworks, two appear to take into account the pressing need to address the shortcomings of the current regulations related to copyrights .

AER warmly welcomes this firm will shown by the European Commission. To address radios’ concerns in the field of copyrights, one should take into account the following points:

1. Radio is online as much as offline: any framework should be technologically neutral and ensure blanket licenses for all platforms – as mentioned, commercially-funded radios’ business-model is still mainly based on free-to-air FM radio broadcasting. However, with the development of digital technology (be it online or on-air), radio must increasingly integrate digital platforms and develop new offers to reach its traditional audience: programmes are being broadcast, streamed, webcast and offered on demand. For each new concept, an additional layer of fee tends to appear, with additional administrative cost even if dealt with by the same body. Furthermore, collecting societies for related 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 copyright payments radios dutifully abide by every year. To ensure clarity and fairness, online and offline fees should be carried out under a single blanket license fee, in a transparent manner.

2. Radio needs country-of-origin principle-based solutions for online distribution, and competition between collecting societies – For radios, easy-to-handle licensing is seen as a very positive step towards a true EU internal market, via fair competition amongst collecting societies and legal certainty for radios in their online activities. Even in an online-environment, commercially-funded radios are targeted at local, regional or national audience. They would consequently make use only of one license valid in all territories where their target audience can pick up the programmes (country-of-origin-principle ). This could be facilitated via a review of the Cable and Satellite Directive (Directive 93/38/EEC). Such a solution will foster better conditions for both copyright holders and users. Compulsory multi-territorial licenses 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 collecting society, via fair competition on administrative fees.

3. 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. Collecting societies have the expertise to fulfill this task – they already do so in the offline and online world for linear uses. Following the example of Switzerland, 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.

4. Radio needs access to the global repertoire – For online uses, important parts of the global repertoire are being divided per publishers, and withdrawn from collecting societies’ offer across Europe, due to market movements. With this development, commercially-funded radios are bound to address different entities in order to provide their audiences with a full range of music styles. This entails higher costs, more complexity and, eventually, inability to play certain music. For radio, it is essential to ensure that all collecting societies are able to license access to the global repertoire, to ensure easy access for radios and fair competition amongst collecting societies.

5. Collecting societies’ management should be streamlined, more efficient and more transparent – Their tariffs should fulfill similar transparency requirements; any organisation providing access to music rights 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. These points could be made compulsory by means of an EU Directive or Regulation, as repeated institutional (via soft law and / or cases) calls for collecting societies’ management improvement have remained (at least partially) unheard.

To sum up, AER defends competition amongst one-stop-shops, enabled via the following requirements: a copyright user should be able 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. For AER, this aim could be reached by:
– Carrying out online and offline fees under a single blanket licence fee, in a transparent manner (to ensure fairness and clarity)
– Extending “the scope of the Satellite and Cable Directive of 1993 to online delivery of [sound] content”. In other words, clearing rights in the EU Member State of origin should enable use in all, at least online.
– Imposing licencing of accessory music in time-shifted / on-demand programmes through mandatory collective management of rights.
– One should not forget the primary and essential need to ensure that all collecting societies are able to licence access to the global repertoire
– Adopting a new EU regulatory instrument on collecting societies’ management

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

ENDS
28/07/2010

Contact details: Frederik Stucki
AER Secretary General
76, av. d’Auderghem,
B-1040 Brussels,
Tel: +32 2 736 9131
Fax: +32 2 732 8990
vincent.sneed(Replace this parenthesis with the @ sign)aereurope.org
www.aereurope.org

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 October 22nd, 2009, the “Reflection Document of DG INFSO and DG MARKT – Creative Content in a European Digital Single Market: Challenges for the Future” (hereinafter the “Reflection Document”) was published. The Reflection Document follows the public consultation on creative content online of 2008, and the subsequent meetings held within the Content Online Platform.

AER supports the European Commission’s objective of “creating in Europe a modern, pro-competitive, and consumer-friendly legal framework for a genuine Single Market for Creative Content Online”. The Reflection Document appears to be a positive assessment of the copyright state of play and a well written and comprehensive document regarding creative content , online. However, radio’s business model in Europe is based, now and for the foreseeable future, mainly on FM broadcasting of free-to-air programmes. Digital technology (be it online or on-air) is radio’s future. It should therefore first be underlined that any framework for copyrights, related to radio, should encompass both online and offline rights, in order to tackle radios’ current and forthcoming needs.

Radio is a constitutive element of the “creative content sector”. Indeed, radios are both copyright holders and important copyright users: 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 to enable its members creating the best “professionally produced content” for their listeners.

Indeed, and as rightly highlighted in the Reflection Document: “Making professionally produced creative content available online is proving to be a high-risk business, because of market fragmentation, high development and production costs and the need to fund as yet unprofitable new services form the declining revenue streams of ‘traditional’ analogue […] distribution” . This sentence can be seen as gathering many issues faced by commercially-funded radios, now and in the near future. Besides, many of the “possible EU actions for a Single Market for Creative Content Online” are perceived positively by AER, as long as their implementation does not lead to further differentiation of offline and online, as outlined in this position paper. For both online and offline, the major developing problem for copyright users, and especially for commercially-funded radios, remains market fragmentation: fragmentation of payments per use, territorial fragmentation and fragmentation of the repertoire (II). However, radios are facing two new major blocking factors in the online world only, which are furthermore believed to be radio-only issues, related to the international nature of internet and to its “novelty” (I).

To sum up radios’ main current needs, AER would like first to recall that 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.

These needs could be immediately addressed by:
– Extending “the scope of the Satellite and Cable Directive of 1993 to online delivery of [sound] content”. In other words, clearing rights in the EU Member State of origin should enable use in all, at least online.
– Imposing licencing of accessory music in time-shifted / on-demand programmes through mandatory collective management of rights.
– Carrying out online and offline fees under a single blanket licence fee, in a transparent manner (to ensure fairness and clarity)
– Facilitating flexible multi-territorial licences: Commercially-funded radios are targeted at local audience, and would consequently make use only of this kind of licences
– Finally one should not forget the primary and essential need to ensure that collecting societies are able to licence access to the global repertoire

I. Radio on the internet: adapting to a “new” environment

Radio is the most intimate medium: it is 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. To maintain this unique tie, our members have to be available on all transmission platforms. The internet has become an important platform for listeners to access our programmes. Therefore, it is both business and consumer critical for AER’s members to have a full presence in the online world in order to maintain listener reach. This raises concerns related to the nature of internet and to the fact that internet is a new transmission platform.

A. A local medium confronted to a worldwide platform

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 and city boundaries. At the same time, by its nature, the internet gives worldwide access. As explained, 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 being heard on a global scale. It follows that there is little imperative to incur the costs and time involved in securing rights for international simulcasting .

However, those stations that do wish to operate outside their national boundaries, or that perhaps unintentionally have listeners (e.g. ex-patriots, foreign fans) 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 27 different bodies to clear the copyrights used, and due to time and financial constraints, this is simply not possible. As a result, those stations concerned with incurring unwanted international copyright liabilities must install systems that block the transmission of their programmes outside of their home territory.

These territorial restrictions and the subsequent blocking of programmes cannot be an appropriate market solution. These conditions are prohibitive for those AER members wanting to expand across borders. AER members need legal certainty. This is why AER supports the European Commission’s proposal to extend “the scope of the Satellite and Cable Directive of 1993 to online delivery of [sound] content”. In other words, clearing rights in the EU Member State of origin should enable use in all, at least online.

B. Issues related to the novelty of Internet

The role of collecting societies is extremely important, and AER does not debate this. For instance, one important element for radio’s development on the internet is the ability to provide listeners with time-shifted / on-demand programmes. However, 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 copyrights and thus entails clearance of copyrights. The multiple rightholders have to be identified and remunerated. This is a task that cannot practically be undertaken by radios. Collecting societies 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 licencing of accessory music in time-shifted / on-demand programmes through mandatory collective management of rights.

Nonetheless, in each Member State, collecting societies are still in incredibly strong positions when it comes to the offering of rights that are critical to AER’s member stations’ day to day operation. The internet is a new platform, to which existing rules are being applied. AER has repeatedly supported better implementation of these rules in the offline world, through enhanced and more competitive collecting societies. This implementation should be streamlined, online and offline.

II. Radio in the age of Internet: old problems to be solved?
As Internet develops, the offline world is being extended online. While this appears to create immense opportunities for new programming and attractive content, it often equates to duplication of costs for certain creative industries: commercially-funded radios are SMEs and need presence in both offline and online worlds, but certainly cannot sustain the multiplication of costs involved in copyright clearance: the market is fragmented in use, territories and content. AER therefore supports the creation of one-stop-shops delivering access to the global repertoire, both online and offline, on a flexible multi-territorial basis “through a single transaction” .

A. 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. 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.

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, in a transparent manner.

B. 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, and, in that sense, welcomes the CISAC decision. 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.

AER welcomes the recognition that “[c]ommercial users’ access to diverse creative content on a multi-territory basis with legal certainty and fair tariffs” is essential. 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.

C. Commercially-funded radios need access to the global repertoire

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. 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. 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.

The idea mentioned in the Reflection Document of an online database gathering information on rights ownership and the bodies in charge of their management is seen as a valuable tool to address part of the problems related to the fragmentation of the repertoire. While the implementation of such a proposal should be further explained, this could help for dispute resolutions. Moreover, AER supports any move towards more transparency of collective rights’ management organizations, and certainly “the publication of the list of their repertoire” ; this should be accompanied, at least on an individual basis, by the publication of their tariffs (including split costs of both rights usage and administration fees), the licencing conditions, administrative requirements and the destination of the monies received. Nonetheless, this should not lead to a situation where radios should pay online copyright fees per track played: radios could simply not exist online.

Moreover, it is very hard to foresee what form the harmonisation of copyright laws at EU level / European Copyright Law would take. AER recommends first to extend some existing rules (such as the Cable and Satellite rule as mentioned above, and the mandatory collective management of accessory music to online), and correctly implement, offline and online, existing rules, enhancing thereby transparency and competition.

To sum up, AER would like to recall that 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 remains available to explain this position in further details, should this be helpful to the European Commission.

ENDS
05/01/2010

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
aer(Replace this parenthesis with the @ sign)aereurope.org
www.aereurope.org