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European Collecting Societies need to be non-exclusive, like in the USA

Author(s)

John Buckman, Magnatune

Abstract:

The main change we would like to see in EU law is to require collecting societies in the EU to operate in a non-exclusive capacity, allowing musicians to retain their rights and for them to be able to do their own licenses. This is how collecting societies have operated in the USA for over 60 years and has not negatively impacted their ability to collect in efficient ways in their main competence area. In other words, I would like to see a weakening of the monopoly power of the national collecting societies, to allow competition.

More information:

Magnatune's main business is selling music licenses to business for various uses, such as for independent films, TV ads, web sites, and music feeds to restaurants and stores. Currently, most collecting societies (except in the USA) are exclusive and do not let musicians do their own deals (ie, make a direct sale themselves).

For instance, a UK musician belonging to PRS cannot grant a license to a UK restaurant to play their music. The UK Restaurant would still need to pay PRS.

In the USA the situation is different, and the collecting societies are non-exclusive, because the collecting societies were sued as monopolies and are required under the "consent decree" settlement to be allow musicians to do their own deals.

In practice what this means is that when a European customer approaches us, we:
1) can license them any music that not with any collecting society
2) can license them any music from a USA musician
3) can *not* license them any music from outside the USA, if the musician belongs to a collecting society.

This has two negative consequences for Europe:
1) licensing businesses following the Magnatune business model cannot exist in Europe, because the exclusive (monopoly) collecting society system is effectively a "restraint of trade" prohibiting any competition with the national monopoly collecting society
2) European musicians belonging to a collecting society are at an economic disadvantage to USA musicians, because they cannot sell their music for public space usage, except to the USA. USA musicians belonging to a USA collecting society can sell their music for public space usage globally.

The main change I would like to see in EU law is to require collecting societies in the EU to operate in a non-exclusive capacity, allowing musicians to retain their rights and for them to be able to do their own licenses. This is how collecting societies have operated in the USA for over 60 years and has not negatively impacted their ability to collect in efficient ways in their main competence area. In other words, I would like to see a weakening of the monopoly power of the national collecting societies, to allow competition.

Here is a paragraph explaining the regime under which the American collecting societies function under (from http://www.musicdish.com/mag/index.php3?id=3825)
Licensing 80 percent of all music performed on the radio, ASCAP attracted its first antitrust suit from the Antitrust Division in 1934. The Department contended that ASCAP dominated the radio industry and should be dissolved. The case became dormant after the government received a continuance after a two-week trial. In 1941, the Department sued both ASCAP and BMI on the principal ground that their blanket licenses, which were their sole offerings, were in restraint of trade. Consent Decrees quickly followed that specified, among other things, that licensing practices must be non-exclusive and that licenses and individual members/affiliates should be allowed to directly contract with one another.

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