Last year, European Commissioner for Competition Neelie Kroes raised questions about the foreign state of the European music market. “Why is it possible to buy a CD from an online retailer and send it anywhere in Europe, but it is not possible to buy the same song, by the same artist, as an electronic download with such ease?” he asked. “Why do pan-European services find it so difficult to get a pan-European license? Why do new services, new services find licensing to be such an obstacle?”
This year, he decided to do something about the problem, which causes low growth rates for digital content sales. Kroes, who has already acquired Microsoft and Intel, wants to move Europe’s digital music business to a common market that transcends national borders. If a company like Apple wants to launch an online music store, it shouldn’t open dozens of separate stores that can each serve only one country. Instead, a single set of licenses should be good enough to provide service across Europe.
We are a long way from that vision, but Kroes said today that progress is being made. French licensing society SACEM and music label EMI have both agreed to a foundation to allow their works to be licensed more easily across Europe.
Kroes, who has chaired the Internet Marketing Roundtable where such issues are discussed, said today“There is a clear desire by the main players in the distribution of music online in Europe to address the many barriers that prevent consumers from taking full advantage of the opportunities that the Internet provides.”
This “willingness” is not surprising, because Kroes has made it possible for regulation or law should voluntary agreements fail to bear fruit.
Sugar water and SACEM
SACEM’s contribution has at least a symbolic importance, because it is the first coordinating society in the world. Set in Paris in the 1850s, SACEM came about after the composer Ernest Bourget stopped by a cafe with a friend in 1847. The cafe band was playing some pieces and surprised Bourget by suddenly playing one of his short songs.
Like one history of social acceptance “When the waiter presented the composer with a bill for the sugar water that he and his partner had consumed as a popular drink of the time, Bourget refused to pay, saying that the singer had played his music over and over — without paying. nothing: and so sugared water in return for playing his piece.”
A Paris court upheld Bourget’s claim that he deserved compensation for the performance of his works, and the world’s first public service right was born. SACEM was created soon after to collect these royalties for producers like Bourget.
But has the music business kept up with the times? Kroes doesn’t think so. “Collectible societies and music labels have come a long way since 1851, the time of Bourget and his sugar water,” he said last year, “but the world has changed around them. The artists have changed, the distribution has changed, and consumers have changed. However, there is an opinion that collecting societies and music labels do not have.”
Collecting societies did not help matters last year, when the International Confederation of Societies of Authors and Composers said in a statement, “Time and again, creators have pleaded that the Commission’s proposed process will lead to a catastrophic decline in the creation of work method, cultural diversity and producers’ income.” Meaning: these border restrictions make prices artificially high. Which is, indeed, exactly the kind of issue that the Commissioner for Competition is into.
Why is it important?
As Kroes tries to drag them into the Internet age, readers can be forgiven for thinking the whole issue to be petty, technical, boring. But the upside is that many Europeans can only buy digital content from stores within their countries, limiting choice and competition.
When the iTunes Store debuted in the US, people from Key West to Seattle could buy music in front of the first digital store to offer an attractive deal. The legal growth of the online music market is largely attributed to iTunes, but the European situation means that some new EU member states such as Bulgaria and Slovakia do not have access to Apple’s online store, even today.
That’s not great for consumers, who often see piracy as an easier and more convenient solution, and it’s not great for the music business. According to the European Commission’s new news on the subject (PDF) put it, “The impossibility of buying IP-protected content from any EU online store is particularly harmful to consumers from new Member States, who have a very limited choice of what music they can be legally purchased on the Internet, although the demand for such content is growing.”
Refuse to provide easy ways to access legal movies and music, and after a while, it may be difficult to create real products in such countries at all.