Challenges in the Music Industry Monopoly

Challenges in the Music Industry Monopoly

Copyright societies are enterprises that sell sell copyrights to broadcasters, owners of restaurants, organizers of musical events or record producers in order to collect revenues for the right owner they represent. Right owners like authors, composers or music publishers assign their rights to Copyright societies and entrust them to administer them. The companies grant licenses to users of copyrights and charge license fees for authorization that are distributed to the right owners as royalties afterwards. This occurs on a global level as for instance an English broadcaster needs not only the works repertory of the English artists but also that of American companies. So the copyright societies make reciprocal agreements in order to enable an offer of the whole world repertory to their customers and on the other hand to ensure that their copyrights are protected abroad also (the English artist gets royalties for a performance of his music in this case).

Copyright societies are operating in a specific market that is determined by restricted competition. Right owners are free to join the society they want to, insofar collecting societies compete with each other. But in relation to their licensing partners (users of copyrights) they have got a monopoly that is legally granted by the state authorities ( Copyright societies need a specific authorization for their business). Actually there is only one society in each country of the world ( except the U.S. ) that operates with a particular repertory ( ie. Performing rights of composers) within a certain territory (country where the company is located). When as for instance a public performance takes place in England then the English society PRS is in charge of licensing and the organizer of the event can get a license ( for the whole world repertory) only from PRS. These principles - that have been practised for many years now - have been criticized by competition authorities like the European Commission. Users should have free choice where and from what company they acquire copyrights, they should not be forced to deal with one single company that is located in the territory of use. The goal of the authorities' initiatives is to enable competition on price for one and the same product between the various national units.

Being faced with those demands the societies will have realize competition