Collecting societies find new way of spending their money

Displaying a previously unrevealed talent for reading legal decisions in Dutch, and with only a tiny bit of help from his friend Kristof Neefs (Laga), the IPKat brings news of a dramatic development in the Netherlands. In essence, a Dutch interim judge in Haarlem has issued a preliminary injunction prohibiting BUMA (a Dutch copyright collecting society) from granting any further licences for the online sale of the repertoire of works administered by the Performing Rights Society (PRS), in so far as those licences extend beyond the territory of the Netherlands. BUMA had previously granted a licence for the territory of the entire European Community to

PRS maintained that the reciprocal agreements between collecting societies did not grant BUMA any royalty-collecting rights beyond the Dutch territory. In its defence, BUMA attempted to rely on the Commission's recent decision in CISAC (see IP Finance post here). BUMA argued that any territorial restriction in its reciprocal representation agreements is null and void, as these restrictions are anticompetitive and infringe Article 81 EC. The judge in the interim proceedings rejected BUMA's argument, stating that even if the territorial restrictions in the agreements are invalid, BUMA still has no right to license the PRS repertoire beyond the territory of the Netherlands.

This is (says Kristof) an interesting ruling in light of the CISAC decision and the Commission's paper on creative content online. The IPKat agrees, though he is a little surprised to see collecting societies breaking rank like this rather than all being on the same side. Yes indeed, says Merpel: when copyright collecting societies litigate against one other, the cost is borne by the rights owners whom they are supposed to benefit.

BUMA goes beyond the European Union here, and also here
Naughty meaning of BUMA here
Collecting societies find new way of spending their money Collecting societies find new way of spending their money Reviewed by Jeremy on Tuesday, August 26, 2008 Rating: 5


  1. An English translation of the decision is now available at:

    Until this morning the following press statement was available at the Buma website:

    Buma/Stemra issues a Pan-European License
    Hoofddorp/Denver (CO), 21 July – Beatport, the world’s leading online electronic music retailer has signed a licence agreement for author’s rights with Buma/Stemra covering all of the world’s music repertoire. The license applies throughout the entire European Union. Buma/Stemra is the only music copyright organisation so far to issue such a Pan-European licence. The licence model offered by Buma/Stemra provides online music service providers with a one-stop shop for authors’ rights for music for 27 European countries.
    “Beatport has partnered with the world’s leading artists and record labels to bring their content to a growing online community of DJs and enthusiasts who are looking to legally purchase electronic music in premium encoded, non-DRM formats,” says Jonas Tempel, CEO of Beatport.

    The company has taken a proactive decision to adjust its business practices to meet the requirements of rapidly changing copyright administration across Europe. From its inception, the Denver, USA-based Beatport has accounted and paid all publishing royalties to its label partners as required under US laws. However, Beatport's European label partners reported difficulties in effectively disbursing this publishing income to the relevant rights owners. In order to address and resolve this problem Beatport has over the last 18 months thoroughly explored all possible solutions to cause the publishing income from sales in Europe to be paid more efficiently to the relevant rights owners. After extensive research and discussions, Beatport has teamed with the Dutch society Buma/Stemra to create the perfect partnership for this transition.

    “Not only is the Netherlands home for some of electronic music’s greatest producers and DJs,” said Jonas Tempel, “but now, Buma/Stemra has matched that spirit of innovation by currently being the only European music copyright organisation to provide a Pan-European licence that covers all of the world’s music repertoire, greatly simplifying the process of paying royalties.”

    This licensing model allows Beatport to efficiently take care of the music copyright payments for all of Europe in a single transaction. Jonas Tempel went on to say, “In addition, I am impressed with the quality of Buma/Stemra’s services, and the organisation is making serious investments in innovation as well as blazing the trail in the development of new online licensing models in the midst of a rapidly changing market.”

    This is not the first time that Buma/Stemra has issued such a Pan-European licence. The American online music store eMusic has also concluded a similar agreement with Buma/Stemra, allowing it to launch its online music subscription model in 27 European countries in a single transaction.

    Cees Vervoord, CEO of Buma/Stemra, is excited about this latest agreement: “The license agreement with Beatport, which many international music users and right holders are watching with great interest, puts Buma/Stemra in a leading position internationally with respect to the rollout and implementation of competitive new licensing models in line with the needs of today’s market. This allows Buma/Stemra to continue to represent the interests of all music authors and publishers in the Dance scene (both Dutch and international), in an effective manner.”

    One-stop shop
    The Pan-European agreements Buma/Stemra has signed with Beatport and eMusic are in line with the European Commission’s intentions to end the traditional system of territorially restricted collective management in which the music copyright organisations each hold a monopoly in their own country and online licences are issued separately for each EU member state. Without the approach offered by Buma/Stemra, music retailers need to make 27 stops, one in each country, to take care of the music copyrights. This results in endless administrative and fiscal complications. Buma/Stemra acknowledges the need for competition between the various European music copyright organisations and has, in keeping with the requirements of both the European Commission and the online music market, developed and fully stands behind a one-stop-shop model that allows music users to obtain a single licence to exploit authors’ rights in all the European Union.

    The licensing model is based on retaining the world’s music repertoire for every European music copyright organisation. The royalty rates applied through this multi-territorial license are the tariffs set in the country where the copyright is to be exploited (sometimes called the “country of destination” principle or the “country of usage”). In other words, music used in, say, Germany will be accounted for on the basis of the tariffs in use in Germany; music used in Spain will be subject to royalty payments on the basis of the tariff in use there. The advantage of this model is that competition between collecting societies offering multi-territorial licenses takes place on the basis of the costs and services of the music copyright organisations and not on the royalty rates paid to rightsholders. The income of authors, composers and music publishers is thus safeguarded from any downward pressure which might occur in the case of unbridled competition. This model for a one-stop-shop is a highly efficient way for both the music user and the rights holder to make licensing arrangements across Europe.

  2. I was just wandering whether anything had happened when Buma/Stemra issued the pan-European licence to eMusic. I know that PRS was unhappy, but to my knowledge this did not result in court litigation. Did the societies find another agreement? Does anyone know more?



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