Friday 13 June 2008

Levy, first-sale price or DRM? What the MBG wants

Writing in World Media Law Report this week Frank Jennings (DMH Stallard) discusses the call of the informal UK-based Music Business Group (MBG) for the government to couple format-shifting with a levy to compensate rights holders, following Denmark, France and Germany. This levy is available as an option under the EU Directive on Copyright and the Information Society, which empowers EU Member States to introduce a system that ensures fair compensation for rights holders.

Jennings reminds readers that the 2006 Gowers Review rejected the imposition of any levies for consumers on the assumption that rights holders can include in the sale price the economic cost of the right to copy. Conventional sales are however in sharp decline. UK retailer Woolworths has stopped selling CD singles altogether, pointing out that just 8 million CD singles were sold in the United Kingdom in 2007, compared with 55 million in 2000. Meanwhile in 2007 over 20 million MP3-capable portable devices were sold in the UK; additionally, over 90% of music on the average MP3 player has been copied.

Jennings predicts that a format-shifting exception is likely to be introduced in the UK in order to legitimize consumers’ existing activity, to which the music industry has already turned a blind eye (as Gowers observed). However, the proposal to introduce a levy on blank media has not found favour with the UK government. He suggests therefore that the solution lies in copy-protecting music, allowing rights holders to charge more accurately for the use of their music.

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