From next week, British creators and other rights holders who license their rights through ‘collective management organisations’ (CMOs) will benefit from increased oversight and control of these bodies.
The Collective Rights Management Directive will be implemented into UK law on 10 April. It is designed to help make sure royalty payments are timely and accurate while significantly improving the transparency and governance of European CMOs.
The Directive also creates a level playing field for multi-territorial licensing of online music services. This development complements the government’s ongoing support for a Digital Single Market across Europe.
Right holders in the UK make extensive use of collective management organisations to manage their copyright. The new Regulations will improve the system in a number of ways:
- control of rights: right holders will have an explicit right to authorise any CMO in the EU to manage their rights, and to withdraw this authorisation
- decision-making: CMOs will need to give their members proper representation in decision-making processes, including on how royalties are distributed
- payment: right holders will be entitled to timely, accurate royalty payments for the use of their works
- transparency: CMOs will need to publish more detail about their operations, letting right holders make an informed judgement on their performance
Baroness Neville-Rolfe, Minister for Intellectual Property, said:
This is great news for UK rights holders who deserve to be paid accurately and promptly for their work. I am certain that the increased oversight and transparency offered to artists will improve the standards of collective management organisations across Europe, and make the entire process run more smoothly. It is right that artists have more choice over who manages their work and how they do it.
Annabella Coldrick, CEO of the Music Managers Forum, said:
The Music Managers Forum supports the provisions of the CMO Directive to help drive increased transparency and accountability within the UK’s collective music management bodies - PPL and PRS. We hope that the implementation of these requirements in other European territories should lead to increased revenues being correctly returned to UK artists from overseas.
The Regulations will also establish a framework to make it easier for CMOs to offer single licences across the EU for online music services. This should encourage the development of new products for consumers, and create new sources of revenue for creators.
Notes for editors
A CMO is a body that is mandated by its members, the copyright owners, to license their rights and collect and distribute their royalties in return for an administrative fee. They are typically not for profit organisations, and are owned and controlled by their members - the right holders. CMOs in the UK are a major part of the copyright system: they have a combined turnover of over £1 billion p.a., and around 500,000 members. As they have historically tended to operate as monopolies in relation to the type of rights they manage, it is important to ensure that they adhere to high standards.
The Collective Rights Management Directive is a measure to harmonise certain aspects of copyright primarily relating to the operation of CMOs, and to create a level playing field for the transparent and effective management of copyright across borders.
- The issues of cross-border licensing of online music and standards of governance and transparency of collective management organisations (CMOs, previously known as collecting societies) have been under discussion in Europe for many years. In 2005 the Commission published a non-binding Recommendation, the impact of which was limited. After further consultation, in May 2010 the Commission announced its intention to bring forward legislation and the CRM Directive was published in July 2012.
- This policy is part of the European Commission’s ‘Digital Agenda for Europe’ and the ‘Europe 2020 Strategy for smart, sustainable and inclusive growth’ and is designed to help strengthen the Digital Single Market.
- In February 2015, the government launched a consultation on implementation of the Directive, focusing on the options for implementation, the discretionary provisions, and the overall costs of implementation. Following consultation, the government published its proposed approach to CRM implementation.
- In November 2015, the government published draft Regulations to implement the Directive for technical review. Following this process, the UK published the final Regulations on 25 February 2016. They are due to come into force on April 10.
- The Intellectual Property Office will be responsible for monitoring compliance with the Regulations, and has produced CRM guidance to accompany them.
- There is currently a regulatory framework in place which requires CMOs to adhere to certain minimum standards through the adoption of codes of practice. . The Regulations that implement the CRM Directive will revoke these Regulations. The new Regulations provide protections in the same areas as those covered by the previous regulatory framework.