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Watch out, GEMA? New draft rules for online music services in Europe

record store

record store

The European Parliament's Legal Affairs Committee has given unanimous support to draft rules to make licensing online music services easier in Europe.

The proposal package – due for the first reading needed to pass it into law in November 2013 – would establish new efficiency and accountability requirements for rights collection societies such as GEMA in Germany, SACEM in France and PRS in the UK. Safeguards would ensure rights holders can grant multi-territorial licenses for their content.

Negotiating with music labels and collection societies is a big deal for music startups. "That is one of our biggest limiters to growth, the restriction that you can't share any piece of content anywhere," Spotify founder and CEO Daniel Ek said in an interview with CNET in April. "You need collecting societies in every market and publishing deals in every market."

According to the same interview, Spotify has about 50,000 such deals and is on track to pay out $500m for music rights this year.

Stalemates can be significant. In early 2012, Grooveshark blamed high licensing costs for its shutdown in Germany. In the same country, a long-running disagreement between GEMA and YouTube continues to block many popular music videos.

The draft rules – if passed into law – should make it easier for online music service providers to expand and boost sales in Europe. In future, according to a summary released yesterday, instead of needing to negotiate country-by-country, companies could deal with a small number of such organisations operating across EU borders.

The new rules would also help ensure small and less popular repertoires are issued with the same licenses as big hits, shorten the deadline for paying out artists' royalties and give artists more control over management of their rights.

Deezer CEO Axel Dauchez welcomed yesterday's committee decision. "Despite some interesting initiatives such as the Armonia licensing hub for musical works, publishing rights licensing is currently complex and fragmented," he said.

"I see today’s announcement from the European Parliament as a good first step in delivering improved revenues to rights holders, publishers, producers and artists. But more importantly, this will be good for music fans all over Europe."

Asked what the draft laws could mean for GEMA, communications spokesman Franco Walther pointed out that this is still a fairly early stage in the legislative process. "We still need to examine the results more closely."

Featured image: record store, by Flickr user Libertinus


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