BRUSSELS (Reuters) - The European Union has drafted a new bill to combat music piracy and strengthen copyright protection which would force companies that manage music rights to pay artists their royalties more speedily.
Musicians, however, say the draft law would only release a tiny fraction of the royalties they are owed and do nothing to unlock royalties made from gigging, clubs and private copying.
“It is time that the money collected in our name reaches the rightful author in a timely manner instead of being spent on marble car parks,” said Kelvin Smits from the artists’ lobby Younison, which represents big names like Pink Floyd, Radiohead and the Dutch trance DJ Armin van Buuren.
The European Commission will present the bill on Wednesday, its second attempt to bring collecting societies into line. These firms manage music rights and collect the fees due to singers, producers, composers and other contributors to a piece of music when it is played.
In a draft law seen by Reuters, EU regulators say poor financial management of collecting societies’ revenues - among other problems - has weakened copyright within the EU, helping to make Europe prime ground for websites offering pirated music.
The draft law would give collecting societies 12 months after the financial year in which a track was played to pay up - or about half the time companies currently have in many countries.
The regulators also demand more clarity on the fees musicians must pay the societies collecting their dues from radio stations or websites streaming their work.
The Commission’s attempts to combat piracy and protect copyright have faced some resistance from the public. Last week, the European Parliament rejected an international agreement to stop piracy because of concerns it would criminalize individuals sharing songs on the Internet - a decision seen as a victory of opponents of the deal, which had been negotiated by the Commission.
Wednesday’s draft law would also lay out guidelines so that collecting societies separate royalty revenues from investments and become subject to supervision by composers and other musicians who hold the intellectual property rights.
“Collecting societies should be required to invoice service providers and to distribute amounts due to rights-holders without delay,” the draft says.
To tackle the proliferation of pirated music, the draft wants to make it easier for websites that stream music, like Spotify, to get licences covering multiple countries, so artists get their work heard by a wider audience.
And if artists cannot get a collecting society to license their work in multiple countries, they can grant their own licences, following the business model in the United States.
The proposed law must be taken up by the European Parliament and approved by member states.
The commission’s clean-up stems from allegations by artists that companies swallow royalties rightly due to the performer or composer.
The Spanish competition authority fined collecting society SGAE 1.7 million euros ($2.09 million) earlier this month for abusing its dominant position.
Artists say the draft law may tackle the distribution of online rights but will do little to unlock the remaining 95 percent of royalties made from gigging, clubs and private copying.
The draft law gives societies permission to keep royalties that have not found their rightful artists after five years.
Smits of the Younison lobby says this puts at risk more than 5.7 billion euros in royalties collected but not paid to the rights-holders. Younison calculated the figure during an investigation into Europe’s main collecting societies in 2010.
“This draft law institutionalizes the vested interests of the power-brokers around the table of collecting societies,” Smits said.
The lobby says artists in Europe see just 1-10 percent of their owed royalties. It also says that collecting societies have an incentive in delaying the payment to artists because they rely on revenue from royalties and subsequent interest.
Younison has praised the model used by the British society PRS, which can earn a commission of up 20 percent on new licences.
Societies say they are not the problem, piracy is.
“The fact is that competition from illegal services offering the same product for free is too great an obstacle for many operators, particularly small stakeholders, to embark on risky cross-border or pan-European ventures,” said the European Grouping of Societies of Authors and Composers (GESAC), which represents 34 societies.
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Reporting by Claire Davenport; Editing by Rex Merrifield and Alessandra Rizzo