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PRS/STIM/GEMA joint venture gets the go ahead

By Chris Cooke | Published on Wednesday 17 June 2015

The European Commission has given the all clear for European collecting societies PRS, STIM and GEMA – which represent publishers and songwriters in, respectively, the UK, Sweden and Germany – to form a central hub to license and process royalties from multi-territory digital services.

The three societies announced the joint venture back in 2013. It will mean that digital services seeking multi-territory licences – which is most digital services – will now be able to licence the PRS, STIM and GEMA song repertoires for Europe through one licence, rather than three.

And while it’s worth noting that the bigger publishers now licence most digital services directly (albeit via joint ventures with the societies), meaning that PRS, STIM and GEMA are no longer licensing their entire repertoires to digital, the number of songs collectively represented by the three organisations is still significant.

Meanwhile, behind the scenes, the new scheme means that royalties due to the three societies from the digital services will be calculated and invoiced together, utilising a combined database of copyright ownership information built on the PRS and STIM’s existing data alliance, aka the International Copyright Enterprise or ICE.

The aim is to make it easier for pan-European digital services to licence song rights and to make the processing of streaming usage-data and monies more efficient, which seems like a fine idea in principle, not least because legislators in Europe are always telling the music rights sector to make licensing simpler.

But competition regulators in Europe nevertheless raised concerns about the joint venture, because PRS, STIM and GEMA collaborating means less competition, and less choice in the market for both licensees and creators/rights owners (sort of, but not really). And while it’s true that the growth of direct licensing of digital in the publishing sector is reducing the dominance of the collecting societies to a point, they are still partners in that direct licensing system.

As previously reported, the EC announced in January that it was opening an ‘in-depth investigation’ into the competition implications of the PRS/STIM/GEMA joint venture because preliminary conversations had suggested the collaboration could “result in higher prices and worsened commercial conditions for digital service providers in the European Economic Area”.

But yesterday the EC announced that, having done that in-depth investigating, it was giving the joint venture the green light, subject to some commitments, mainly to ensure publishers have some flexibility over what administration services they choose to use.

The Commission said in a statement: “The approval is conditional upon the proposed joint venture implementing commitments that will enable other players to compete with the joint venture in the provision of copyright administration services. The Commission had concerns that the creation of the joint venture would make it more difficult for other collecting societies to offer copyright administration services by raising the barriers to entry and growth in this market. The commitments submitted by the companies address these concerns”.

Needless to say, the three societies welcomed the decision, as you will see from the quotes fest below. We now wait to find out the timescales involved in shifting multi-territory digital licensing and royalty processing from the individual societies to the new hub.

Meanwhile, quotes…

PRS For Music CEO Robert Ashcroft: “This is a very significant day for online music licensing as our new joint venture is uniquely positioned to deal with the rapidly transforming online music market. What this clearance means is that we are now able to work even more effectively on behalf of songwriters, composers and their music publishers, while at the same time helping to develop the Digital Single Market across Europe”.

STIM CEO Karsten Dyhrberg Nielsen: “Today’s competition clearance announcement is testament to the incredible work that has gone into the design of this new offering, which will provide a seamless service for both music rights holders and pan-European digital service providers. It’s the result of years of productive collaboration between STIM, GEMA and PRS For Music to deliver a solution that will help the digital market grow”.

GEMA CEO Dr Harald Heker: “Our hub enables fluidity, agility and speed in the multi-territory market, facilitates the licensing process for digital service providers and improves the quality of rights administration for the benefit of rights holders and users. The JV constitutes an important new chapter for the whole rights management industry and a huge step forward towards the development of an EU-wide Digital Single Market for music”.