Counting the Costs of Collective Rights Management of Music Copyright in Europe
The identification and clearance of music copyright is a complex process that suffers from high transaction costs when managed by individual rightsholders. The pooling of music copyright in collective rights management organizations has historically reduced these costs, while providing a larger, and thus more attractive, repertoire to commercial users via the issuance of blanket licenses.However, the development of digital distribution channels and automated clearance technologies for music copyright across multiple borders presents a number of challenges to the current system. As music consumption increasingly takes digital forms, Europe must modernize its collective rights management system in response. The results of this study show there is a very large market for digital music in Europe. As broadband penetration increases and competition amongst Internet Service Providers (ISPs) in Europe enhances access to the Internet, this market will grow rapidly. The market is valued at over 2.6 billion Euro in France, Germany and the UK alone. This constitutes a potential royalty market of 212 million Euro. Yet, only 49 million Euro in royalty revenue from online sources was collected by SACEM, GEMA and PRS for Music. Moreover, the majority of this revenue was collected by PRS for Music in the UK, which is the smallest of the three markets but by far the most efficient CRMO for the collection of royalties from online sources. Other nations in Europe, though significantly smaller, still represent a valuable market opportunity. The disparity between potential and actual revenue for all of the European markets suggests there are problems with the current collective rights management system. The percentage of the royalty market captured in the USA was over 4% more than the European average. New solutions should be sought to capitalize on the market opportunity of digital music services in light of increasing broadband penetration and changing consumer patterns in Europe. This should help unlock the potential of digital music markets, consolidate the single European market, increase competition in the administration of collective rights, and provide better services to European consumers.
|Date of creation:||17 Oct 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-61, October.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:34646. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.