The changing role of collecting societies in the internet

Abstract

Collecting societies currently face major challenges stemming from: the reconfiguration of existing and emergence of new powerful players in the field of music distribution; the necessity of cross-territorial licensing options, and; the fragmentation of copyrights. This article presents an overview of recent technical and policy developments in this area in Europe and, on a more abstract level, it discusses structural problems underlying the policy conflicts. Collecting societies became indispensable intermediaries in the copyright system of the 20th century. Their core task was the collection of high-volume, low-value royalties stemming from secondary uses (e.g., broadcasting, public performance, lending) of creative works. Collecting societies are the solution to the problems that the individual creator – provided she/he is not among the small group of famous, top-selling artists – is confronted with, such as a weak bargaining position vis-a-vis broadcasters or online music platforms, and the fact that transaction costs for collecting small royalties from many users of her/his work (e.g., bars, clubs, discotheques) are generally too high (Mazziotti et al. 2009: 17 ff). In the field of music, the system of national collecting societies with monopolistic or quasi monopolistic positions always had its shortcomings. They are usually privileging top-selling artists and are not well suited to accommodate non-commercial music production and venues. But they provided a relatively stable and reliable framework for licensing musical works. As a result of the growing importance of the internet for the distribution and sale of music, this system of national collective rights management societies currently faces major challenges. The internet introduces new and transnational distribution channels. In combination with the heavily criticised (Drexl et al. 2012) attempts of the European Commission to introduce more competitive elements to the