EU pushes music industry to open up online rights

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EU antitrust regulators told the music industry Tuesday to move quickly and change licenses that currently restrict online music stores such as iTunes from offering the same songs for sale across Europe.

Internet music downloads in Europe lag behind those in the United States, pulling in just a fraction of revenues the record industry is losing from falling CD sales.

Part of the problem in Europe is that music rights are sold separately in each country, which has prevented Apple Inc.’s iTunes from setting up a single store to service all of Europe. Instead, it has to seek licenses from each EU member state where it wishes to sell and to set up separate national stores with different music selections.

EU Competition Commissioner Neelie Kroes said regulators’ talks with the music industry mean that French collecting society SACEM and record label EMI were now willing to license their music to rights managers across Europe.

Apple told the EU executive that it would offer music tracks to all European customers if it was able to license EU-wide rights.

It says the small market size in some EU nations does not currently justify the expense and effort needed to open up a store and it would consider opening online stores in eastern Europe if it was easier to clear music rights.

ITunes is not available to customers in the 12 mostly eastern European states that have joined the EU since 2004.

Kroes said there was now "a clear willingness" from major players in the online music market to tackle these problems. She urged publishers and music copyright groups — also called collecting societies — "to move quickly to adapt their licensing solutions to the online environment," saying she would review progress.

This carries more than a hint of a threat. The European Commission told collecting societies last July to end a system of contracts that allow artists to collect payments only from an agency based in their own country.

It found the 24 European collecting societies guilty of breaking EU antitrust rules, but did not impose any fines. The collecting societies are members of CISAC, the International Confederation of Societies of Authors of Composers.

EU spokesman Jonathan Todd said the talks with the music industry were running parallel to a court appeal against that EU decision.

Musicians make money from their music after they register copyrights with collective rights managers. Those managers then license songs to online services, radio stations, nightclubs and other outlets.

Some artists have complained that altering current licenses could see them shortchanged and miss out on income from increased sales.

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