European performance income & US repertoire
IMPALA is calling on the EU and also music businesses to take action on the vital question of European performance income, which is currently under threat of being transferred out of Europe to countries with no domestic right such as the USA. We have a working group looking after this.
It is important to bear in mind the following:
- It all started with a decision in the European courts (C 265/19 Recorded Artists Actors Performers Ltd v Phonographic Performance (Ireland) Ltd) from September 2020 which has created a strange anomaly that we expect to be fixed promptly by the EU as it could have significant consequences.
- IMPALA has a one-pager explaining the impact of the RAAP ruling on European performers and producers and the organisations’ key asks to the European Commission, see here.
- This decision only relates to Ireland and Irish law for now. All other societies should continue to follow their national position already in place unless/until national legislation changes.
- The European court said it was obliged to reach the conclusion because of the way the EU directive is drafted, but expressly acknowledged that this legislation could be changed.
- The principle of reciprocal treatment remains valid under EU law, as long as it is specific and drafted properly. The Dutch law has changed but the producers/performers collecting society and the government support a return to reciprocity and this video explains why.
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Even countries which currently pay should still seek recognition of the principle of reciprocity as it means there is still some leverage in the international system and Europe retains influence – exactly in line with the original intention – and can adjust their decisions in the future. If action is not taken now, it will be too late.
- EU legislation must now be clarified to respond to the court’s views and expressly provide for reciprocal treatment and also allow for national treatment and other systems currently in place, so as to remain compatible with both international and EU copyright law.
- We estimate that 125m euros per annum are at stake – that is what we calculate would be transferred out of Europe away from European performers and labels to the USA alone each year. In addition, there is the question of the past – Sound Exchange has already launched litigation for the future and the past in France.
- There is little prospect of increasing licensing revenues in Europe to compensate for the loss. Even if increases were possible, we would still need reciprocity as it is fundamental to ensure basic protection worldwide (more on this below).
- The very first question is amending EU legislation to reflect the original intention and implement international copyright law properly by recognising reciprocal treatment expressly and also allow for national treatment and other systems currently in place. Both member states and European parliamentarians are asking the European Commission to change the relevant EU directive:
- In June 2021, in an official answer to a question posed by several European parliamentarians the Commission acknowledged concerns about the impact of the ruling and confirmed the launch of a study to evaluate the consequences. IMPALA welcomed the Commission’s response as a first decisive step.
- A few months later, in November 2021, a cross-party group of EU parliamentarians – led by the Chair of its Culture committee Sabine Verheyen – challenged the European Commission about its continued failure to address a court ruling from last year on European performance income. The Commission responded in January 2022 that it was taking this matter very seriously, with work on a study expected to start shortly and a parallel information-gathering exercise being carried out with EU member states.
- Work on the study in question started in March 2022 and the final study was published in April 2023.
- In the meantime, the EC published a first call for evidence in July 2022, followed a year later by a second stakeholder consultation published in September 2023. The European Commission published in April 2024 a synopsis report summarising input received within this latest consultation.
- Also in April 2024, MEP Sabine Verheyen and a few of her colleagues tabled another written question asking the European Commission if it could confirm that it would put forward a proposal before the end of its ongoing term of office to confirm the principle of reciprocity.
- IMPALA raised the alarm on this again in March 2023, two and a half years on from the ruling as there was still no outcome, and yet again in November 2023 in a joint action with artist groups. Music Business Worldwide covered the statement in a piece entitled “Europe’s artists and labels could lose $137m annually to US recorded music rightsholders if EU law isn’t changed, trade groups warn”. In April 2024, as there was still no indication of a possible way forward from the European Commission, IMPALA and several artist organisations from major European music markets published another joint statement calling on the European Commission to “get its house in order” on broadcast and performance monies being transferred away from Europe ahead of the June 2024 European elections.
- To let this slip by doing nothing is like the EU actively choosing national treatment to the detriment of European labels and artists and lets down our counterparts in countries who don’t have rights, as Europe would have no trade pressure.
- This is not just about the financial aspects. It’s also about basic principles and fundamental copyright protections. What we are seeing is the unpicking of settled understanding of an EU directive over many years.
- Our overall priority is to increase the level of protection across the board in all countries and reciprocity is a fundamental part of that. Without reciprocity the general level of protection around the world would be a lot less. Thanks to this, China and Japan have for example now introduced partial rights protecting performers and labels.
- Our view is that allowing the now apparent hole in the EU legislation to stand will make it more difficult for us to achieve maximum rights for all. It cuts across IMPALA’s efforts to increase rights protection for all with Europe’s trading partners. Trade talks between the EU and the USA are important and IMPALA issued a statement on this in June 2021. The EU should not agree for example to national treatment in trade negotiations as that would be the worst possible outcome for both American and European labels and performers.
- IMPALA supports the campaign by USA rightholders for a national terrestrial radio right and paying out on US recordings without a US domestic right will harm the US’s ability to secure such a right. (Note that the campaign is for terrestrial broadcast, not public performance, but the EU and its members, and indeed most countries across the globe, have both rights in their domestic law to protect performers and producers). Note our calculations show this is worth many billions just for terrestrial radio alone as that market is worth 10 times digital radio and Soundexchange revenues for digital radio alone are $2bn. This is the real financial loss for american artists and labels.
- If the USA gains a broadcast right but not a public performance right, we still need the principle of reciprocal treatment to protect European performers and labels from losing their European public performance income. We also need reciprocity to encourage all third countries to introduce full broadcast and performance rights and maximum protection, just like Europe did when it implemented international law in this area.
- Performance revenues already plummeted when venues closed during the Covid-19 pandemic. Now is not the time to further impoverish European performers and their independent label partners, who account for 80% of all new music releases and would be affected disproportionately. Two reports (here & here) have underlined the vital contribution music makes to the EU economy and the losses caused by the crisis.
- Urgent action is needed by the EU to avoid damaging our economy and weakening cultural diversity further.
- STOMP, the Dutch association of independent music companies, wrote a letter in March 2023 calling on Dutch artists and their managers to speak up on RAAP. The letter was picked up in an article by Dutch entertainment website EB Nieuws. (original versions of the letter and article here and here)
- Jonas Sjöström, CEO and owner of Playground Music, Scandinavia’s largest independent music company, was interviewed in March 2023 by Musikindustrin about the impact of the RAAP case on labels and artists in Sweden and across Europe. (original version here)
- The following artist groups joined us in November 2023 (see statement): ADAMI (French performers’ CMO), Musikerförbundet (Swedish Musicians’ Union), NTB/Kunstenbond (Dutch Musician’s Union), PlayRight (Belgian performers’ CMO), SAMI (Swedish performers’ CMO), SYMF (Swedish Union of Professional Musicians), unisono (German Musicians’ Union).
- Another statement by IMPALA and a group of artist organisations from key national markets was published in April 2024, asking the European Commission to “get its house in order” on broadcast and performance monies being transferred away from Europe ahead of the June 2024 European elections.
- Listen to Jérome Roger here talking about this to Juliana Koranteng in our podcast series 20MinutesWith.
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