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Liverpool Sound City: The ups and downs of confusing digital licensing

By | Published on Thursday 27 May 2010

Two final reports from last week’s Liverpool Sound City conference now, the first from the licensing panel that took place during the technology strand that dominated day three of the convention.

The Orchard founder Scott Cohen had mixed opinions about the confusing nature of music licensing in the digital domain. On the issue of pan-European licensing he was quite clear: the system operated by the collecting societies on the music publishing side of the equation was just too complicated. Of course, that’s not especially surprising, given he runs a company that is able to licence the sound recordings The Orchard represents to Europe-wide digital ventures, but must then break the news to the entrepreneurs behind such ventures that they need separate publishing licences from every collecting society in Europe.

Representing the publishing sector, Eric Mackay of CELAS, which represents EMI Music Publishing’s catalogue in the digital domain, admitted that the system for licensing music on a pan-European basis wasn’t ideal, but argued that the publishing sector was slowly adapting to the needs of the digital market, partly to satisfy the demands of the European Commission on this issue, and partly for commercial motivations. Prior to the internet, he added, no one needed cross-territory licences, and creating such licences was not without its challenges. But, he countered, the publishing sector is moving in the right direction.

Cohen wasn’t so sure. “Many licenses say that moves by the European Commission to force pan-European licences has made things more confusing than ever”, CMU Publisher Chris Cooke, also on the panel, noted. “Is that because we’re in a state of flux, or is everything screwed up, and basically we need to start again?”

“I really think it’s the latter”, Cohen said.

“I still believe the long term future for digital licensing – publishing and sound recordings – is blanket licensing through collecting societies which all offer pan-European licences”, Cooke added. “Though it might take us a few years to get there. Because even if law makers don’t force a radio-style licensing system for digital services onto copyright owners – which they might in France – ultimately, once there are no more million-dollar deal-sweeteners to be had by major record companies, blanket collective licensing just makes sense for logistical reasons”.

Cohen said he was prone to agree, though Mackay said he couldn’t disagree more. Partly because he felt regulators, far from forcing blanket licensing on the music industry, would block it for anti-competitive reasons, certainly at a European level.

But is the confusing nature of music licensing always a bad thing? Panel chair Cliff Fluet of legal firm Lewis Silkin, who counts Nokia among his clients, wanted to know about licensing in the sync and brand partnership domain, an area where blanket licences will surely never apply. The multiple ownership of songs and sound recordings by different individuals and companies – and the fact the artist a brand actually wants to work with often doesn’t control any of their own music – seriously confuses marketing bosses with big budgets to spend. Isn’t that a problem?

“Yes and no”, Cohen reckoned. “Really it’s a business opportunity, for those of us in the room who do understand how it works, and who can sell that expertise to brands and marketing agencies looking to work with music”.

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