Licensing Issues Accelerate as Music Services Move to Cloud
Cloud music services will provide a turnaround for digital music distribution, which is still too much of a niche market, said music industry executives at the Midem conference in Cannes, France. Several cloud music services were announced during Midem, including Sony’s “Unlimited Music” which is supported by the streaming service Qriocity. But the debate over fair licensing deals for online services and the call of the industry to governments for help to protect their business models against piracy continues.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The German government isn’t acting on online privacy, said Bernard Levy, president of Vivendi, which owns Universal Music Group: “In some countries we have legislation and are working with ISPs, in some countries we had nice words, but no acts. From Germany we do not even hear nice words.” The French legislation of graduated response managed by the new agency “Hadopi” (Haute Autorite pour la diffusion des oevres et la protection des droits sur internet) was “a big breakthrough”, Levy said.
Hadopi will soon send out second warnings to 1,800 alleged infringers, after sending out 70,000 first warnings. “Governments have to help us to save our business models in the future,” said Dagmar Sikorski, president of the German Music Publisher Association (DMV).
Though the new cloud music services will make online music more attractive to a mass market, they also raised concerns about piracy. Harry Maloney, director at Catch Media UK, which is launching a “Play Anywhere” cloud streaming service in several European countries, attacked Daren Tsui, cofounder of New York cloud music provider mspot for not asking for licensing from the major labels and the collecting societies before starting the mspot service, which just had a beta version out in some European countries.
"We went through two and a half years of pain,” said Maloney pointing to the need to negotiate licenses with labels, aggregators and collecting societies. Midem panelists said online music providers who want to offer a worldwide repertoire on a global basis had to negotiate with 30 collecting societies in Europe, major labels and aggregators of independent labels not included.
Michel Barnier, EU Commissioner for Internal Market and Services promised at Midem that the EC would come out with either a directive or regulation to solve licensing and allow easier access to the rights for online service providers. “Licensing is still much too complex,” Barnier said.
But do cloud music providers need licensing at all if they only provide the so-called digital lockers allowing users to store music they own for convenient streaming to all their devices, including mobile devices? Maloney warned that there would always be “proliferation” of pirated songs to the lockers, especially when a cloud provider offered an additional streaming service. Thomas Hesse, president of Sony Music Entertainment, said Sony Music Entertainment would do everything to protect their rights in such a case.
A court question is pending in the U.S. about whether a cloud provider has to monitor customers’ behavior to prevent them from locking up pirated content. The case EMI vs. MP3tunes, in which Google recently filed an amicus brief supporting the MP3tunes, is expected to conclude this year after a three-year process. The start of a Google cloud music service or an expansion of the Apple’s MobileMe locker service could bring a huge change to the market, an expert from Music Ally said.
WIPO Proposes Global Music Registry
Francis Gurry, secretary general of the World Intellectual Property Organization (WIPO), promoted another idea to make licensing and management of global repertoires easier. Gurry proposed an international music registry, “a place where you can go to know who owns a piece of music,” Gurry said in his keynote. He said such a registry is “central to the future of the music industry and its capacity to thrive, if not to survive.” While an EU registry had been discussed before, Gurry said the WIPO registry was different in several regards.
A global registry certainly would be preferable to just an EU organization, and the idea of the WIPO registry was to register all existing rights for a piece of music and not split the rights of authors, publishers and performers, said Nick-Ashton-Hart, consultant of Consensus Optimus. Gurry promoted WIPO as the natural place for the registry because the organization’s experience with large registry databases and dispute resolution. He said he envisaged a governance structure by data owners and expected the music registry to be a public-private partnership.