It seems that aging rockers might get what they want after all with the European Commission’s formal proposal to extend the term of copyright protection for sound recordings from 50 to 95 years. The proposal, along with another to harmonise the term of copyright protection in co-written musical works, is contained in a Proposal for a Directive amending Directive 2006/116/EC on the term of protection of copyright and certain related rights published by the Commission on 16 July 2008. Performers on recordings made in the late 50s and early 60s, whose copyrights are about to expire, will therefore be entitled to royalties in the additional period. They will continue to be eligible for broadcast royalties, public performance royalties and, where applicable, compensation payments for private copying of their performances. Record labels will also benefit from revenue earned on record sales. Additional measures in the draft Directive include a proposal that record producers set aside 20 per cent of all revenues for a fund for session artists along with a “use it or lose it” clause to enable performers to regain the rights in recordings over 50 years old that record companies no longer exploit commercially.
The terms of protection for copyright were harmonised by Directive 93/98/EEC, which was subsequently codified by Directive 2006/116/EC. The term of protection for performers and record producers is currently 50 years after publication. The Commission’s proposal would extend that protection to 95 years after publication.
The Commission’s proposal reflects the fact that performers are increasingly outliving the existing 50 year period of protection for their performances. The Commission estimates that, over the next ten years, the expiry of copyright in recordings released between 1957 and 1967 will mean that around 7,000 performers in any of the big EU Member States, and a proportionate number in the smaller Member States, will lose all of their income deriving from contractual royalties and statutory remuneration claims from broadcasting and public communication of their performances. This affects not just feature performers like Sir Cliff Richard, who receive contractual royalties, but also anonymous session musicians who may have had their exclusive rights bought out but are still entitled to “single equitable remuneration” payments for broadcasting and communication to the public.
In relation to co-written mu sical compositions, the problem is that, due to different approaches at national level, in some EU Member States musical compositions with words will be protected until 70 years after the last contributing author dies, whilst in other Member States, each contribution loses protection 70 years after its author dies. Such discrepancies lead to difficulties in administering copyright in co-written works across the Community, as well as difficulties in crossborder distribution of royalties for exploitation that occurs in different Member States.
As well as extending the term of protection for performers and record producers to 95 years, the plan is for record producers to contribute to a fund designed to “remedy” the situation in which session musicians usually sign away their exclusive rights of reproduction, distribution and making available to record labels in return for a one off payment. In other words, the proposed remedy for the “buy out” is that session musicians will be entitled to make a claim to receive a yearly payment from the dedicated fund. This will be made up by paymentsfrom record producers of at least 20 per cent of the revenues from the exclusive rights of distribution, rental, reproduction and making available which, in the absence of the term extension, would no longer be protected. The plan is to allow Member States to require this to be administered by collecting societies representing performers.
The proposed Directive also provides for a statutory use it or lose it clause. This essentially means that if a record producer does not publish a recording which, but for the term extension, would be in the public domain, the rights in the fixation of the performance shall, upon request, revert to the performer and the rights in the record as such will expire. Further, if after one year neither the record label nor the performer makes the record available to the public, the rights in the recording and in the fixation of the performance will expire.
In this respect, publication of a recording means the offering of copies of the recording to the public, with the consent of the right holder, provided the copies are offered to the public in reasonable quantity. Publication would also comprise otherwise commercial exploitation, such as making available to online retailers.
The use it or lose it clause will also ensure that recordings are not “locked up”. In other words, “orphan” recordings, for which neither the record producer nor the performers can be identified or found, will be available for public use on the basis that they have not been exploited within a year of the extension period.
CO-WRITTEN MUSICAL COMPOSITIONS
By “co-written musical compositions” the Commission simply means a musical composition that comprises contributions from several authors to—most obviously, the score and the lyrics. The problem is that in different EU Member States, such cowritten musical compositions are classified as either: a single work of joint authorship with a unitary term of protection, running from the death of the last surviving co-author; or separate works with separate terms running from the death of each individual author. As a result, a single piece of music may have different terms of protection in different Member States.
The Commission takes by way of example the opera Pelléas et Mélisande. Debussy, the composer, died in 1919. Maeterlinck, the librettist, died much later in 1946. In those Member States that apply a unitary term (e.g., France, Greece, Lithuania, Portugal and Spain) the entire opera remains protected until 2016 (i.e., life of the last surviving author plus 70 years). In those countries that consider the music and the libretto as two distinct works (e.g., Austria, the Netherlands, Poland, Slovenia and the United Kingdom) or two works that can be exploited separately (e.g., Germany, Hungary and the Czech Republic) the protection of the music expired in 1989, while the words remain protected until 2016.
According to the new rule in the proposed Directive, the term of protection of a musical composition will expire 70 years after the death of the last surviving author, be it the author of the lyrics or the composer of the music.
The Gowers Review did not support a term extension for recorded musical performances. In fact, it recommended against it. The Commission has nonetheless done its best to allay concerns over the potential effect on consumer prices, for example, in the frequently asked questions published alongside the proposal (see MEMO/08/508). It also tries to deflect criticism that a term extension, insofar as it may benefit session musicians, is pointless.
The Commission cites empirical studies showing that the price of sound recordings that are out of copyright is not lower than that of sound recordings in copyright. The Commission also insists that the proposal will not affect the amount of airplay royalties that broadcasters have to pay as all public performance rights used by broadcasters are managed collectively and broadcasters pay a fee based on turnover irrespective of how many performances are protected. No broadcaster clears sound recordings on a “per track” basis.
The Commission believes that it has struck the right balance with the fund and the use it or lose it provisions to protect performers who have already transferred their rights to record labels. It criticises the Gowers Review for considering performers’ royalties from the point of view of their exclusive rights. The Commission says that performers actually receive a large part of their income from remuneration for the broadcast of their performances in music, i.e., airplay royalties, and, in most other EU Member States, from compensation for private copying. Neither of which are mentioned by Gowers, even though these are not transferred to record companies.
Not surprisingly, recording artists like Sir Cliff and Roger Daltrey, who have lobbied hard for this change, are delighted. Under current rules, the copyright in the first of Sir Cliff’s recordings will exp ire in 2009. Over the next ten years some major recordings will follow, including those in the Beatles’ catalogue. But the minor players in the industry—musicians, engineers and session players—not just featured artists and record labels, will also derive real benefits from the Commission’s proposal. The UK Government’s response will not be revealed until after the summer of 2008. The UK Intellectual Property Office (UK-IPO) has responded by launching an immediate consultation. At this point it does not say much, stressing the need “to be very clear that the circumstances justify an extension” and reminding everyone that there was evidence before the Gowers Review “suggesting that extending the term of protection would negatively impact on consumers in industry”. It is clear, however, that the UKIPO has set its standard against the Commission’s proposal.