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When Dot-Coms & Labels Agree (In Principle)
By Eric de Fontenay (Founder & Publisher)
(more articles from this author)
2003-03-19
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While recording labels and publishers typically agree on the nature and enforcement of copyright, it does not prevent them from clashing over alleged infringements of each others rights, providing much irony for industry observers. Like when a group of music publishers recently sued Bertelsmann for providing a lifeline to Napster, thus perpetuating the infringement of their works.

The last example is Universal Music International's antitrust complaint to the European Commission against Europe's copyright collecting societies. UMI's complaint accuses mechanical rights societies represented by Paris-based BIEM (Bureau International des Sociétés Gérant les Droits d'Enregistrement et de Reproduction Mécanique) of imposing terms & conditions for the right to manufacture sound recordings for sale in Europe that are "unfair and in breach of EU antitrust laws" and calls on the Commission to intercede with a solution that "work[s] fairly and efficiently for everyone's benefit."

The complaint specifically alleges that:

* BIEM and its members are abusing their monopoly over mechanical rights;

* that the royalty, a percentage of the wholesale price of a sound recording and presently representing around 11% of the average retail price, "is by a significant margin the highest in the world"

* that the terms prevent record labels from developing products and pricing that meet the needs of the market, including penalizing discounts offered to wholesale and retail customers, selling records at reduced prices and including more than a certain number of tracks on albums. * that together, these result in "higher prices and in a reduction in consumer choice"

For anyone familiar with the hurdles faced until very recently by dot-coms in acquiring licenses from record labels, this is the ultimate in irony. Replace "copyright collecting societies" with "recording labels" in UMI's complaint and you'd find the exact same arguments advanced by innumerable dot-coms against the recording labels, whether they be OMDs such as MP3.com, file sharing systems like Napster or webcasters that fought the RIAA for a percentage on revenue formula over the industry's inflated per track-per listener royalty structure.

Related News from Mi2N:
» UMI Files Further Submission To European Commission In Anti-trust Complaint Against BIEM's Excessive Mechanical Royalty Rate


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