by : Business, February 2016

A Pan European Licensing Initiative

A Pan European Licensing Initiative

With the birth of music trading over the Internet, a number of Performing Rights Organisations lobbied for the creation of a multi-national database through which a host of musical works could be controlled. The aim was to streamline the process of licensing and distributing music online and to enthuse other intermediary services with the prospects of a more federated approach.

The most recent example is the Global Repertoire Database (GRD), which failed in July of 2014; see the previous issue of the Music Business Journal. The attempt to lower administrative costs while making collections more efficient never materialized and the GRD consortium piled up debts of $14 million. The PROS themselves had cold feet, with the American PRO ASCAP allegedly pulling the plug first. A contagion effect followed, and in short succession expertise and funding was withheld by other PROs and interested parties, including publishers and online service providers. Before the GRD, another initiative, the International Music Registry or IMR, sponsored by the World Intellectual Property Organization (WIPO), never launched either; see the Music Business Journal, May 2012.

Despite this, a handful of the European PROs that were involved with GRD are back with a new project, the International Copyright Enterprise or ICE. The PROs in question are PRS For Music of the United Kingdom, STIM of Sweden, and GEMA of Germany. The inspiration, of course, goes back to GRD and IMR. For instance, in 2006 PRS recognised that their own back office systems and supporting computing infrastructure were vastly out-dated, in some cases by the worst part of twenty-five years; after considering whether their upgrade should be just internal, they decide that it could not be: it was thought that the best way forward was to create an original database, to streamline back office processes, and partner up with other leading European musical collection societies to create a system of superior efficiency. In 2015, it is back to the drawing board again.

The newly appointed CEO of the ICE Licensing and ICE Services is PRS’s Robert Ashcroft. As he states, “the DNA of this hub has been forged from the same qualities of [our earlier] copyright database, which was in itself born of collaboration and a strong will to solve big problems in the market place. ICE is a truly mass-market proposition that will appeal to the widest cross section of rights holders and digital service providers operating across Europe. ICE builds out the brand with a truly flexible suite of options. It is set to deliver security, speed and reliability very cost effectively to all customers.” Ashcroft shall keep his duties as CEO of PRS in conjunction with this newfound responsibility at ICE. Joining Ashcroft as Commercial Director of ICE Licensing will be Ben McEwen, also of PRS.

As of early 2016, ICE will be performing three major roles in the industry: (i) services, (ii) licensing, and (iii) general operations. ICE Licensing is the amalgamation of the pre-existing licensing services provided by PRS, STIM and GEMA, between whom the rights of 235,000 registered member artists and songwriters are represented. ICE Services offers crucial support to this in the form of intermediary assistance, which covers invoicing, legal support and the provision of business expertise to all of ICE’s licensing clients. ICE Operations will provide online matching and processing services. At present, Digital Service Providers (DSPs) can choose whether they want to join ICE or not. This will, of course, depend on the particular needs and wants of the DSPs. For instance, if a particular firm is large enough to the extent that they have their own in-house legal and business accounting department, they may opt for not including ICE Services as part of their package.

But why should ICE succeed as a successful ‘pan-European licensing hub’? In particular, what is to stop any of the three co-founding organisations, PRS For Music, STIM or GEMA, from getting the same cold feet GRD members did?

With ICE, there is likely going to be fewer conflicts of interest because there are fewer parties involved, — just three nation states in a part of the globe that shares long standing trade, political, and cultural ties. Security can be more easily trusted for the same reason: no publisher wants to devolve collection of worldwide performing rights to a new multinational body without the right assurances about possible breaches in the basic data, the administration of fulfilment rights, and, fundamentally, the control that is given up in collection operations. Size matters here, and co-operation between the UK, Germany, and Sweden is far more manageable and easier to trust than a wider European Union of stakeholders with North American participation (ASCAP, for example, may have lost confidence in Europe’s ability to handle proper collection of performance rights because many European societies double up on mechanicals).

If ICE succeeds, artists and songwriters will benefit from the speed at which they can get their works licensed to DSPs and then paid royalties. France, Italy, and Spain are not part of ICE so far, but, given the prominence of the founding countries, ICE’s impact in Europe, where there are twenty-eight collection societies, could be a game changer and precipitate new country alliances. From the point of view of the DSPs and other entertainment mediums that need to acquire licenses for songs, film and television studios, a single licensing body will be a godsend.

 

By Edward Panek

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