Collective Licensing
A report on certain practices in the Collective Licensing
of Public Performance and Broadcasting Rights in Sound Recordings
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Summary
On 30 March 1988 the Secretary for Trade and Industry and
the Secretary of State for the Home Department jointly requested
us to report on practices relating to the collective licensing
of sound recordings for broadcasting and public performance:
in particular, the practice of owners of copyright assigning
their rights to collective licensing bodies, and those bodies
stipulating royalties, common tariffs and restrictions on
performance (see Appendix 1.1).
The licensing of sound recordings for broadcasting and public
performance is undertaken by four collective licensing bodies,
but only Phonographic Performance Ltd (PPL) proved to be within
our terms of reference. PPL has a substantial monopoly of
the market, and some users, in particular the BBC and the
independent local radio (ILR) companies, claimed that PPL
exploits that monopoly position to their disadvantage.
Our inquiry concerned two conflicting interests: on the one
hand, those of the owners of copyright in sound recordings,
who enjoy a monopoly with statutory protection, and on the
other hand, radio stations and promoters of public performances
who are dependent on the ready availability of copyright sound
recordings.
Our inquiry took place during the later stages of the Copyright
Designs and Patents Bill, which amends the relevant law and
establishes the Copyright Tribunal. We make some recommendations
about the way in which the Tribunal should function as successor
to the Performing Right Tribunal (PRT).
Our main conclusion is that collective licensing bodies are
the best available mechanism for licensing sound recordings
provided they can be restrained from using their monopoly
unfairly. We recommend:
(a) PPL should be obliged to permit the use of its repertoire
in return for equitable remuneration;
(b) users should be entitled to a statutory licence, initially
on the basis of self-assessed royalties, pending a Copyright
Tribunal order on equitable remuneration; PPL's injunctive
right should be limited;
(c) the Copyright Tribunal should be strengthened and changes
made to its procedures in order to expedite its decisions;
(d) no changes in PPL's current royalty rates;
(e) performers should be given equitable remuneration from
the royalty income received by PPL, in substitution for the
existing unsatisfactory arrangements;
(/) PPL should no longer require larger discotheques to employ
musicians as a condition of licensing;
(g) the BBC and ILR stations should be subject to a common
tariff, related to audience size; and
(h) abandonment of PPL's needletime constraints.
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