Wednesday 5 August 2009

EC threaten US with Trade Sanctions and P2P EU Report Gloom

As the P2P debate rages and Europe releases the depressing results of a recent EU study on P2P - of which more later - Brussels is challenging the US in the real world of copyright.

The EU is threatening the US with trade sanctions over the US's failure to provide adequate copyright protection for European composers, songwriters and their publishers when their music is perfomed in restaurants and bars across the pond. US law gives an exemption from a liability to pay ASCAP, BMI or SESSAC licence fees for public performance of songs in certain bars and restaurants (annoyingly referred to as a "tax" in some reports). This is possible under a US copyright law amendment dating from the 1990s.

According to EuroActiv (31 July 2009), "The EU has safeguarded its rights to suspend trade benefits granted to the US if the Copyright Act is not amended," reads a European Commission report published in July regarding trade barriers used by the US.

Protests by the EU did result in US financial assistance for two whole years to compensate EU writers and publishers. This "deal" expired in 2004 and has not been replaced by any other compensation (or a change in US law).

ASCAP and BMI fought very hard against this amendment in the 1990s, sadly with very poor support from US songwriters who seemed reluctant to make the trip to Capitol Hill for the fight. (This writer wonders whether US restaurant and bar owners pay their greengrocers for the parsley that is used to garnish the food - if music is purportedly "incidental" to the dining or drinking experience, surely the parsley is incidental to the meal.)

And, those readers, who have no problem being deafened by the sound of the slamming stable door, might also like to suggest the Commission tries to correct the failure of US cinemas to pay performance royalties to composers of original film scores for the public performance of music in the film - a practice that dates from shortly after World War II and that has been redressed partly thanks only to the efforts in the UK of the PRS in their Membership Agreements (PRS 1 - Music User Nil -for a change). I suppose the argument might be that if music is not properly remunerated in the real world what hope is there in the metaverse.

And so to the Metaverse: Yesterday, along comes a profoundly depressing report from the European Commission - Commission Staff Working Document: "Europe's Digital Competitiveness Report" - very helpfully, and slightly gleefully summarised on Item 5.1 in the Report, entitled Willingness to Pay for Content, reveals that a 2008 survey indicated that fewer than 5% of Europeans had paid for content in the preceding 3 months. Of such individuals, half of them said that nothing would persuade them to pay for content -- though improvements in quality, better payment methods and the right to share materials would tempt some 30% of those surveyed to change their habits. As the P2P blog says:
"...... a pretty important finding, and it goes counter to what entertainment industry executives have been claiming for years. It's impossible to compete with free, they argue, but paid online entertainment would thrive if only those file sharing sites and networks would get shut down."

The Report goes on:
"The diffusion of broadband has brought about rapid growth in the distribution of online content, legal as well as illegal. While young users are at the forefront in the use of the internet for content and entertainment activities, they also stand out from the rest of the population in their attitude towards the payment of online content; they are generally unwilling to pay for many of the services, except those providing some additional added value over and above that provided by those services they can obtain for free.

"This stylised fact is posing a number of challenges to policy makers, regulators and industry."
Oh really?!

The Commission Report's conclusion on paying for content should be an inspiration to us all: "solutions to these problems need to be found; through finding innovative and sustainable business models as well as a favourable regulatory environment" You don't say!

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