Consumers Forced to Pay Hefty Private Copy Levies Despite Royalties Paid Upon Download
Brussels (Oct. 13, 2005) – New data released by the Business Software Alliance (BSA) provides evidence of the growing market for DRM-enabled online content, highlighting the incongruity of rising “private copy levies” on digital equipment in Europe. The study was released as the BSA and the European American Business Council (EABC) host a gathering of global industry leaders in Brussels this week to discuss the issue of levies.
The study finds the size of the DRM-enabled online music market in the U.S. and Europe(1) is expected to reach approximately €1.86 billion in 2008, a nearly seven-fold rise from approximately €235 million in 2004. The online music market in western Europe alone is forecast to grow more than 500% by 2008 to €559.1 million, from €106.4 million in 2005.
“With DRM technology’s expanding role in the market, levies have become a superfluous double tax on consumers,” said Francisco Mingorance, director of public policy, Europe for the BSA. “Levies were designed to compensate for unpoliceable private copying; but with DRMs the rationale for levies disappears.” A previous study conducted for the BSA forecast a 500%(2) rise in private copy levies from 2002 to 2006 in France, Spain, Germany, the Netherlands and Italy.
Online music downloads carry a royalty at the point of purchase designed to compensate artists for use of their copy-protected material. Payment of this royalty is facilitated using DRM technology. Yet, according to Bitkom, a German trade association, consumers pay up to €150 in private copy levies for a typical home or small office setup with a PC, scanner, printer and CD or DVD burner, even if they purchase copy-protected digital content such as online music. That means European consumers are forced to pay usage rights multiple times for the same music: at the download point, and through taxes imposed on their equipment.
“Lawmakers cannot ignore that private copy levies are increasingly obsolete in the digital age,” said Mingorance, citing the new study of copy-protected media. “Governments have an opportunity to bring real consumer benefits by applying the European Copyright Directive rules and phasing out the outdated levies system,” Mingorance said.
Background:
- Copy-protection technology known as digital rights management (DRM) is used on virtually all legal music downloads and subscriptions. It typically allows users to make a reasonable number of private copies while helping to prevent outright piracy.
- Copyright levies exist in most countries in Europe—the United Kingdom, Ireland and Luxembourg being notable exceptions.
- Levies were introduced before the advent of copy-protection technology as a means of compensating copyright owners for legitimate private copying.
- Article 5-2-B of the European Union’s Copyright Directive foresaw the gradual phasing out of copyright levies as DRM technology entered widespread use. So far, however, few countries in Europe have implemented the clause in a way that prevents copyright levies being charged on digital devices.
- The BSA study of copy-protected music and DVD sales was conducted by Informa Media and based predominately on actual data through 2004. In some countries where no published data was available, Informa Media spoke to local contacts in each market to produce what it believes to be accurate estimates.
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About the BSA:
The Business Software Alliance (www.bsa.org) is the foremost organisation dedicated to promoting a safe and legal digital world. BSA is the voice of the world's commercial software industry and its hardware partners before governments and in the international marketplace. Its members represent one of the fastest growing industries in the world. BSA programmes foster technology innovation through education and policy initiatives that promote copyright protection, cyber security, trade and e-commerce. BSA members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, Cadence Design Systems, Cisco Systems, CNC Software/Mastercam, Dell, Entrust, HP, IBM, Intel, Internet Security Systems, Macromedia, McAfee, Microsoft, PTC, RSA Security, SAP, SolidWorks, Sybase, Symantec, Synopsys, The MathWorks and UGS.
For further information, please contact:
Lisa Merchant, BSA, +44 (0) 20 7201-0156, lisam@bsa.org
Brandon Mitchener, APCO, +32 2-645-9834, bmitchener@APCO-EUROPE.COM
-ENDS-
(1) The data covers western Europe and the new member states
(2) See Rightscom Economic Impact Study www.bsa.org/eupolicy
