Will Europe Ever Get Its Shit Together?

There’s a lot to love about the European digital music industry.

Europe gave us Spotify, and subscription achievements by companies like Aspiro Music make you want to clap out loud. But the rest gets really depressing, really fast.  I’ve sat down with European executives who genuinely feel that progress is being made, that this country-by-country licensing morass will eventually iron itself out.  That companies will someday be able to launch with a lucid licensing structure, without the fear of lurking lawsuits, unmanageable and shifting costs, and other nuggets of investor kryptonite.

Optimism is a great thing, I want to believe too! But I’m starting to think this situation is hopeless.  After all, why is Pandora – arguably THE hottest digital music company on the planet right now – still unable to license Europe after years of trying?  Why are rates, complicated licenses, and opaque rules keeping a clear winner out of this region?

Where’s the centralized, easy licensing marketplace that is critical for industry growth?  “Having one place to go to get licenses is really valuable for a company like Pandora,” founder Tim Westergren recently told MusicWeek, stating the obvious. “Ultimately, we hope that sooner rather than later the various constituencies among rights holders will come together and realize that it is really the answer, in that it facilitates the launch of businesses that are good for the industry. Our hope is that what is going on in the US will be the exemplar.”

That’s right!  Westergren might kvetch about SoundExchange and the Copyright Royalty Board for days on end, but compared to Europe, that’s the ‘exemplar‘!

But wait, it gets worse.  Because just a few days ago, quickly-rising Turntable.fm also pulled its troops from the region.  This is a more dicey example, but Turntable doesn’t even want to try.  Which means, someone else probably will, legally or otherwise.

Which seems like the gigantic lesson of the past ten years.  These are incredibly tricky and involved issues, but the cost of not solving them is catastrophic.  In the US, a DRM’d iTunes Store launched years after Napster, and arguably, the damage was already done.  It was too late, the pricing never made sense to the consumer, and piracy still eclipses paid channels to this day.

Divided this industry has fallen.

/pr. Tim Westegren pictured while speaking with Charlie Rose.

17 Responses

  1. marcjacobson

    Simplifying the process of securing publishing rights for digital music providers will take time to resolve.

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  2. mdti

    Copyright laws in the US and in the various EU countries are very different.

    USA is a country, Europe is a collection of countries with various copyright offices distributing shares at various percentages and according to various criteria.

    Also, the industry itself is a collection of labels that act on various territories according to diffrerent status and different missions, and in various legal environments.

    The only solution is to get the EU/US copyright laws the same, but it is improbable that a French artist will give up the highest standard of copyright from which he benefits, to a US copyright standard which is lower.

    It is unlikely that a US major company is willing to act according to the standards set up by EU independant artists or even their counterpart local major company, even though it is the same Group (actually, there is no group per se, but a network of majors with the same name).

    etc etc

    • not a solution

      I hear that type of resigned response all the time. You can’t solve a challenge by describing the impossible challenge in greater detail, that’s called giving up. It has to then move to a solution.

      • mdti

        There is no resigned answer but just a stement ofcurrent facts.

        The solution resides in the hand of the industry, especially major labels, not in the legislator.

        There have been agreements between ascap, sacem and BMI (US, France and germany) but this is only local, and took around 4 to 5 years to find a decent deal that encompasses various revenues from medias ‘radios, yourube, daily motion).

        The industry players are probably the most reluctant to find common rules, that was my point, eventhough not easy to express as i am not native english speaking.

        In the new industry point of view, it is also important to know that you can’t find funds and investors inside the EU as it would be in the US: different countries, different languages.. where the audience of the US state can be united into one huge audience (the US), it is much harder to do the same in a EU country. also culkture of business.

        Where is the EU directive about copyrights ? when i was a student, 15 years ago, it was something that was discussed for 5 years already, and 5 years later it wasn’t ready. I don’tr know what happened to it though 🙂

        It is all facts, now, noone said it can’t change, you can only observe that it didn’t change and won’t soon.

          • James Blunt

            I don’t think anyone cares about Pandora in Europe.

            Is this really news? Pandora? It’s just bad radio with little programming.

  3. @Sonicbids

    Sonicbids

    #SmallWorld

    I was just talking to an European artist today about this…

    • America

      Same thing happens in America. You need to obtain rights separately for each country. Canada, US Mexico , Argentina, Chile etc etc all have different societies.

      Would be open to advice on any of these matters if y’all are confused.

      • newm

        That’s a good point. A lot of artciles coming out of the US seem to point the finger at Europe as if it’s making things difficult when the US has already crossed this bridge. That isn’t the case, populations aside the fact remains that the USA is one country, Europe is a collection of a large number of very different countries. Most attempts to unify Europe in any area are met with a large amount of resistance.

        The set up with regards to PROs is also very different with each countries PRO not wanting to give up the monopoly it has in it’s territory to another organisation.

        I’m not saying people aren’t right to want a simplified approach to licensing but I think it’s naive to think it we can just set up a single agency who will licence the whole of Europe.

  4. @FeaturedArtists

    Resnikoff should have been a diplomat!

    • Lagula

      There is plenty of room for copyright reform, but this article does smack of techies saying things like “if musicians didn’t demand that we pay them, my company could launch our new service and make lots of money so fast”. There are the extremes of labels who want to get paid what they did ten years ago, and techies who think musicians should be satisfied with anything more than zero, which is what they are often getting now. Spotify is not a “clear winner” , it is one of several companies offering fairly similar services, who need licenses to offer music legally. Apple has been winning the race for years, but things are getting interesting these days.

      • mdti

        yes, that’s the main issue.

        people who broadcast and sometimes sell medias, not willing to pay the “content providers”… it might be difficult for a company to agree paying artists in accordance with many local laws, and that’s why it took so long to get deals from youtube/dailymotion/spotify/deezer, and a couple of others. if a broadcaster doesn’t want ot can’t comply with this, it is understandable that the labels are more than reluctant to give up content which is valuable in their countries. It’s just a current fact, not a prediction.

  5. @Hampstead17

    Nora Rothrock

    Fragmented, frustrating and doesn’t serve people or musicians.

  6. Cringe

    The USA is not so clever. Record labels and publishers see both sides of the coin. (when they actually receive payment, that is)

    How come the mechanical royalty in downloads on eg. iTunes is paid to publishers through collection societies in most civilised countries for example UK, Australia, Germany, Italy, France and Scandinavia and Japan who incidentally speak different languages and have slightly different rules – but not in the USA and Canada. Radio and TV performance also flows but well not in the USA. There are times when the USA acts like a 3rd world country.

    Label and publisher accounting is tough enough already without different currency calculation to do on streams worth a 1000th of a dollar and unpaid mechanicals in downloads leaving everyone hanging out to dry.

    Publishers are wondering if they are going to get paid by who and when whilst labels are struggling with setting aside miniscule amounts of calculated royalties due to maybe multiple publishers when it reaches a dollar or two.

    It is thought by many colleagues that Western Europe is likely to grow up and regulate sooner than the US. Perhaps the US should look at the European models, join in and grow up before they are left on the outside. Heard a conversation yersterday that went something like this.
    Ok, we are in agreement to the digital distribution plan but I want to decide which countries don’t get it. Happy for ,,, and ,, but we are being ripped in the States…….. Oooh! that was a musician speaking. What has he heard?

  7. PRS for Music

    In regard to the above article “Will Europe Ever Get Its Shit Together” I wanted to highlight a couple of points. Firstly we believe that whilst there are licensing issues across the EU – when the 27-country multi-language, multi-currency market is taken as a whole – and licensing is a complex business as you yourself say, there are many moves in progress to simplify things. In the UK we have licensed 63 new digital services and 17 of these on a pan-European basis, allowing the UK to have a thriving digital music market. Consumers are well served in terms of type of service (i.e. streaming, download and subscription) and provider. The industry is moving ahead with a Global Repertoire Database to offer an improved service to both music creators and users across the continent and beyond, with a single view of the copyright data that underpins the rights we represent. Similarly collecting societies such as PRS for Music have invested in new systems, processes and training to adapt to the vast volumes of transactional data we now have to process in the digital market place.

    In relation to Pandora the answer is simple: they didn’t accept the price offered for the repertoire they wanted to use. I’m delighted to say that We7, Spotify, LastFM, iTunes, Amazon, Deezer, YouTube to name but a few have engaged with rightsholders and successfully operate in the European marketplace. While we want as many different music services to use our members’ music as possible, we respect the commercial decision of any organisation not to launch in a territory or territories for whatever reason.

    The US and European legal frameworks, copyright legislation as well as values ascribed to rights, are distinctly different and this should be clarified so all of the facts are understood. Comparing these markets in a simple like-for-like way is an unhelpful exercise and misses the underlying subtleties in the licensing models. It must be noted that one of the most successful streaming services across Europe has not yet launched in the US market because it has not so far been able to obtain the necessary licences.

    Whilst I agree we must solve issues collectively in the online market place to help support this growing business and tackle piracy, we should not overlook the great progress made, the real choice on offer for our consumers and the differences in these markets.

    Robert Ashcroft, Chief Executive PRS for Music

  8. Julian

    Agreed, this industry is an absolute f*cking mess, and none of the elite in charge are willing to allow progress. An artist’s blood, sweat and tears are now worth nothing more than some alcoholic sophomore’s Facebook photos.

  9. @JPGthedude

    John-Paul

    Will European collection societies ever work together for the benefit of all?