Wednesday, 27 May 2009 04:41

iTunes Store willing, if not ready, to go Europe-wide

Mooted changes in the administration of intellectual property rights in Europe could see the iTunes Store and other online music retailers open their virtual doors to customers across the continent.

For some time, the European Union has been pushing the idea of extending the 'common market' concept to music downloads.

iTWire previously reported on a round table meeting called last September to discuss the opportunities and barriers to increased online retailing in Europe.

Joining EU Competition Commissioner Neelie Kroes at the meeting were, among others, eBay's John Donahoe,  Roger Faxon of EMI (the first publisher to offer pan-EU licensing), musician Sir Mick Jagger, Apple's Steve Jobs, and Bernard Miyet of French performing rights association SACEM.

Kroes made it clear that she would, if necessary, take action to ensure a competitive online marketplace across member states, especially when it comes to digital music.

A second meeting took place in December, and now the EU has released a report [PDF, 116K] on both discussions.

At the first meeting, Apple's position was that it was not viable to offer the iTunes Store throughout the EU as it must obtain the necessary rights on a per-country basis, and the small size of some local markets means the benefits may be less than the costs incurred.

So what does Apple want? See page 2.

This situation had been made worse by various publishers withdrawing rights from the collecting societies, as the latter are no longer able to offer 'blanket licences' covering all the rights needed by a digital music seller such as the iTunes Store. Instead, it requires "a myriad of different licenses from different licensors."

Apple suggested a system where performing and mechanical rights always go hand in glove (that is, performing rights agencies would be also able to license mechanical rights, and vice versa), and where publishers cannot refuse to licence their rights to collecting societies.

At the followup meeting, Eddy Cue, Apple’s vice president of Internet services, restated the company's position that the difficulties in obtaining rights for each country are a major obstacle to providing pan-EU access to online music services. There are too many parties to negotiations, and not enough information about who owns which rights.

Being able to license a global repertoire - even if that licence is limited to a particular territory - is more important than the availability of multi-territory licences to subsets of the global repertoire, he said.

But SACEM's Miyet warned that a system that put the various rights managers in competition with each other could lead to a "race to the bottom" to the detriment of rightsholders.

According to the report, iTunes would agree to making its content available to all European consumers, including those in countries where the iTunes Store does not currently operate, if multi-territory licences were readily available along with a shared database of rights ownership.

It seems likely that other online music retailers would follow suit.

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Stephen Withers

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Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.

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