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EU plans to boost Web music broadcasts
15:16 Monday 30th September 2002
Reuters
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New EU rules will pit music licensing companies against each other, thereby driving down prices and making music cheaper for Internet radio stations
Music from rap to Rachmaninov will get a boost on Internet radio under a plan by European Competition Commissioner Mario Monti to break open the market for Web broadcasting rights, Commission officials say.
Over-the-air radio stations, which must pay an extra fee for music rights if they want to simultaneously broadcast their signals over the Web, will find they have a choice when they go to rent the rights for music.
The same will apply to any television stations using the Web. The new marketplace will extend to all countries of the 15-nation European Union and neighbouring European Economic Area (EEA) countries such as Norway.
Anyone who wants to offer music at a disco, on a radio station, or on the Internet currently pays for the right to rent the music. Each country has its own private association to rent out such rights, keeping some of the fee for administrative costs and passing on royalties to copyright owners.
When Web broadcasting became available, many radio stations began broadcasting their over-the-air signal on the Internet as well. But in some areas of the world they have had to pull their signal off the Internet because the royalty rights for over-the-Web broadcasts were simply too expensive.
Monti and his aides have hit on a way of introducing competition, which they believe will drive down prices.
Instead of merely licensing music for Internet broadcast in an individual country, each of the EU and EEA "collecting societies", as they are known, will be able to issue licences valid across the European Union and EEA, Commission officials said on Monday.
With that, the societies will suddenly find themselves in competition with each other. Radio and televisions stations will be able to shop around and look for the best deal, according to Commission officials.
The decision is only the first step in the Commission's effort to open up licences for royalties, officials said.
By the end of next year, the societies will present a plan to the Commission to split their fees into two pieces -- one for administrative costs and the other for the royalties themselves, Commission officials said.
That way, radio and television broadcasters will be able to compare the fees and choose those with the lowest administrative costs, the Commission officials said.
The Commission was able to act because the collecting societies had come to them and sought permission for a joint agreement on the licensing of broadcast rights.
That kind of joint agreement requires approval by the Commission to exempt it from the EU's antitrust laws. The Commission agreed to the exemption only if the societies would make the pro-competitive changes, Commission officials said.
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