BRUSSELS (July 7, 2005) – The Business Software Alliance today welcomed the European Commission’s call for greater competition in cross-border licensing of online music in Europe.

The development of legal online music services is crucial to artists and consumers alike. It also drives the growth of new digital technology and services. Europe lags behind the United States and other countries in the uptake of such technologies. (In 2004 the US market for online legal music sales was almost ten times larger than in Europe: €207 million vs. €23 million).

In a 50-page assessment of copyright licensing ahead of a long-awaited legislative proposal this autumn, the Commission concludes that the market for legal online music services in Europe would be helped by allowing copyright holders to choose one royalty collector for the entire European Union. (Currently, companies have to negotiate terms country-by-country). The BSA agrees with the Commission’s assessment. Competition among collecting societies would go a long way towards encouraging a viable alternative to online piracy.

The BSA regrets, however, that the Commission stopped there.  Equally damaging to the uptake of legal online music services is the proliferation of national copyright “levies.”

Consumers in Europe are often forced to pay copyright levies several times over for the same product—first at the point of sale, and again each time they buy a new digital medium, including PC hard-disk drives, portable digital devices, blank CDs etc. In the Netherlands, for example, €140 might soon be collected on iPods. In Germany, consumers and businesses alike pay more than €200 in copyright levies when they buy a new computer system with a printer and scanner.

“If the Commission wants to spur on-line music sales and help European consumers it also needs to rein in runaway copyright levies,” said Francisco Mingorance, director of public policy for BSA Europe. “Copyright levies are entirely superfluous for on-line sales because consumers already pay royalties at the time of a purchase,” he said.

For further information, please contact:

Shona Jago, Communications Director, BSA Europe, +44 (0) 20 7201-0156, shonaj@bsa.org

or

Brandon Mitchener, +32 2-645-9834, bmitchener@APCO-EUROPE.COM

About the BSA: The Business Software Alliance (www.bsa.org) is the voice of the world's software industry and its hardware partners before governments and in the international marketplace.  With offices in Brussels, London, and Munich, BSA is active across the European Union and in more than seventy countries around the world.  BSA programs foster technology innovation through education and policy initiatives that promote copyright protection, cyber security, trade and e-commerce.  BSA members include: 4D, Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, BVRP Software, Cadence Design Systems, Cisco Systems, CNC Software/Mastercam, Corel, Dell, Entrust, HiT Internet Technologies, HP, IBM, Intel, Intergraph, Internet Security Systems, Insystek, iQuate, LMS International, Macromedia, McAfee, Mamut, Microsoft, Microstar, Monotype Imaging, Nemetschek,  O&O Software, OWG, Panda Software, PTC, Realviz, RSA Security, SAP, SIA, SGS, SolidWorks, SP Grupo Sage, Staff & Line, Sybase, Symantec, UGS Corp., VERITAS Software, Visma, WRQ and Young Digital Poland.

Background:

• The BSA fully supports the need to reward the creators of digital content for their work.
• BSA member companies, like others in the fast-growing online markets for digital music, film and games, use invisible watermarking technology known as digital rights management software to help prevent piracy and to reward content creators fairly and directly at the point of sale.
• Levies are intended to compensate rights holders for legal private copying, not illegal copying, but in practice take the form of a “piracy tax” on European consumers – even if they are neither pirates nor copying protected works legally.
• Because levies are being applied indiscriminately to all digital media in many member-states, consumers are paying collecting societies royalties even when they back up their own hard disks, copy their own personal photos onto blank CDs or save their own home videos onto blank DVDs.
• Because levies are never indicated separately on a sales receipt, consumers for the most part don’t even know they’re paying levies.
• The lack of harmonisation on copyright levies at the EU level is delaying the roll-out of on-line music services.
• Digital Rights Management technology (DRMs) is the fairest, most effective way to compensate rights-holders for their work and thwart piracy while allowing legal private copying under “fair use” laws.
• DRMs will move us a step closer to a system that allows consumers to compensate rights holders directly, fairly and precisely for use of their works, rather than indirectly, inadequately and arbitrarily.
• DRM technology encourages the development of new, innovative markets such as the markets for on-line sales of music, video and games, to the benefit of European consumers.