On his blog, Christian Engström, MEP for the Swedish Pirate Party, discusses the upcoming Collective Rights Management Directive, which has just been presented by the European Commission. The directive aims at harmonisation of national royalty collecting societies, as a step to facilitate the Internal Market on the internet, an area where it at this time still has serious shortcomings, as I have commented before.
As Mr. Engström rightfully notes, this is an improvement over the status quo and might really shake up the intransparent structures and the monopoly of rights some national collecting societies currently have. It should be supported.
I also agree with his criticism of the directive. If the author of a work cannot be found within 5 years to be paid his royalties – the work is then considered “orphaned” – the collecting societies should not be allowed to simply keep the money. This would set the wrong incentives and probably weaken the effort to actually search for the rights-holder. The collecting societies have to lose the money in that case, and Mr. Engström’s proposal to donate it to cultural archives and museums in need of funding seems a good idea, though the details of who is eligible might be tricky. Mr. Engström proposes to leave this to the member states, but since the whole idea is to not only make a European Internal Market but a common “cultural zone”, maybe there should be a central European office where cultural institutions and maybe even new up-and-coming creative projects can apply for receiving some of those funds?
The draft directive mentions a due date for payouts of 12 months after the financial year, which is of course ridiculously long. As services like flattr show, flexible distribution of funds between consumers and creators is easily possible on a monthly basis. The distribution societies do of course have a few more transactions to process, but if a small start-up can handle millions of transactions a month, the big collecting societies should easily be able to put up a bigger server or rent some cloud resources to handle billions.
Still, this is definitely a step in the right direction. Though it should not stop here. Like the first draft which I discussed here before, the provisions of the directive do not state an obligation for multi-territorial licensing, it just compels member states to provide specific favourable conditions for this to happen. Should a national collecting society decide not to license multi-territorially, the option to do this falls back to the rights-holder. In many cases, the rights holder will not be the artist, but a record label. And as I explained in my earlier post, they have commercial reasons (regional price discrimination) to refrain from granting a Europe-wide license. In fact, the directive acknowledges that territorial licensing is also grounded in commercial choices in it’s first chapter (page 3). So for many pieces of media, the Digital Internal Market still won’t be realised through the directive.
The goal should be a Cassis-de-Dijon ruling for digital media. The analogy is of course not completely correct as it’s always difficult to compare tangible and digital goods. What I mean by it is that, I, as a consumer or possibly even reseller, should be able to import mp3 or other files that are legally sold in one member state into another via the internet. This is not possible due to nationally-centred licensing, but the button on my favourite mp3 website doesn’t say License. It says Buy. And if I buy something in one member state (the transaction takes place on their server), I own it and should be allowed to take it with me across borders.
However, even though the implementation of the current draft of the Collective Rights Management directive would not bring about this situation, it definitely improves the conditions for forming a true Digital Internal Market in the near future.
The criticism I put forth about the earlier draft of the Collective Rights Management Directive still holds true, but Christian Engström and all like-minded MEPs are right to generally support the Directive (notwithstanding the points he rightfully criticizes). It is a step in the right direction and should facilitate further steps toward a Digital Internal Market.