On July 16, 2008, the European Commission adopted a proposal to extend the term of protection for performers and sound recordings from the current 50 years to 95 years. The proposal has caused quite a stir among the general public and in legal circles, and is subject to controversial discussions.
Protection of aging performers
The proposal was elaborated on the basis of the initiative of the Internal Market and Services Commissioner Charlie McCreevy. The main objective of the proposal is to improve the economic situation of performers who are increasingly outliving the existing period of protection for their performances. A Commission survey shows that many performers start their career in their early 20s or even earlier. When the current protection expires, they will be in their 70s and, given the life expectancy in the EU, it is not unusual for performers to live well into their 80s and 90s.
In comparison with the works protected by copyright that grants protection for 70 years after the death of the author, the performance rights come into being at the time the recording is released. If no changes are made, an increasing amount of performances recorded between 1957 and 1967 will lose protection over the next decade.
Benefits for the record companies
The record companies gladly support the proposal. In recent years, the record labels faced major challenges because of the evaporation of the CD markets and the insufficient replacement revenue from online sales. In order to invest in new talent and innovative recordings, the record companies require new income that can be generated through the extension of the protection term.
Term extension as an efficient mechanism of protection?
Many have militated against the extension of the term. The main point of criticism is that the extension of the protection term will, if anything, inure to the benefit of market-dominating record companies, while the old recordings will not be available for the free market and for young performers.
It has also received strong criticism, saying that only those musicians will benefit from the new rules who do not need it because of their successful carrier. For instance, Mick Jagger, lead singer of the Rolling Stones, has been lobbying the term extension.
Mr. McCreevy objects that he wants to protect “poor cousins” of the music business and not successful performers like Mick Jagger. The Commission’s impact study demonstrates that the proposal would provide average performers with an additional income ranging from approximately €130 to €2000 per year. These amounts, mostly attributable to airplay royalties, might not appear spectacular, but the Commission advances the view that they are often considerable for musical performers.
According to the report of the Max Planck Institute, which has criticized the proposal, the main reason for the weak position of performers is in most cases not the term, but the fact that the performers do not command sufficient negotiating power against the recording companies. The best way to protect the performers is to restrict the legitimacy of the so-called buy-out agreements. In a buy-out agreement, the producer makes a single payment to the performer. If the recording becomes successful in the years to come, only the record company benefits from it. Though the income gained from the collecting societies also increases in relation to the performer’s success, this income is insignificant in comparison to the contractual royalties that the performer could have obtained from the producer.
The ‘use it or lose it’ clause
The proposal contains further measures like the “use it or lose it” clause. This clause will be compulsory for agreements between performers and record companies. According to this rule, performers will be able to claim their rights back if the record company does not market the sound recording during the extended protection term. This will in particular be sensible for less successful recordings that would otherwise gather dust in the archives. The performer will be able to either market the recordings himself or find another record company. In case neither the performer nor the producer exploits the rights to the work within one year after extension of the term, the rights in the sound carrier and the rights in the fixation of the performance shall expire.
Fund for studio musicians
The proposal also stipulates that record companies will have to set up a fund into which they shall pay 20 percent of their revenues earned during the extended period. The money from this fund will be distributed to studio musicians.
No negative impact on consumer prices
The Commissioner stressed that the proposal is not expected to have a negative impact on consumer prices. Empirical studies on the price effects of copyright protection show that the price of sound recordings that are no longer protected by copyright is not necessarily lower than that of protected recordings.
Musical compositions with lyrics
Finally, the Commission proposes a unified regulation for musical compositions with lyrics. The current provisions in the Member States are not consistent. In some Member States, musical compositions with lyrics enjoy a single term of protection of 70 years, calculated from the death of the last surviving author. In other Member States, musical compositions with lyrics are regarded as separate works with different terms of protection. This means that the term for the lyrics of a song has already expired while the melody remains protected. The Commission now intends to introduce a new regulation to apply a uniform method of calculating the term of protection of musical compositions with lyrics, which shall be modeled on the existing method for calculating the term of protection for cinematographic or audiovisual works. When a musical composition is published with lyrics, the term of protection shall be calculated from the death of the last surviving person who can be either the author of the lyrics or the composer of the music. This standardization has been appreciated by many groups.
It remains to be seen which consequences will follow the debate on the initiative. In Germany, the regulation in the proposed form has so far been met by refusal.