DigitalEurope: Reform of the flat-rate remuneration for authors is overdue

The European umbrella organization of the IT industry, DigitalEurope, is "celebrating" 60 years of flat-rate copyright remuneration in the EU with a proposal to finally abolish the "legacy" to a large extent. "Originally, copyright levies on blank media such as cassettes were introduced to compensate artists for private copies," writes the association in a recently published position paper. "In the meantime, they have become a complex and outdated system that is applied to most electronic devices. They hinder the internal market and place an unfair burden on consumers. Although fair remuneration for creators and a thriving cultural sector are essential, the current levy system is ineffective and urgently needs radical reform."

The very different national systems in the EU make "cross-border trade" more difficult, writes DigitalEurope. They distorted prices and the rapid availability of works. Last but not least, they create an enormous administrative burden for the companies concerned. The attempt to extend the levies to cloud services, refurbished products and offline downloads from streaming services only exacerbates the problem. In view of the drastic decline in private copies, it is crucial to switch to alternative models. These must "benefit consumers, Europe's digital transformation and rights holders alike".

Direct licensing with blockchain as a replacement model

According to the authors, the music market is growing year on year, primarily due to the increase in paid streaming subscriptions. Although this makes private copying virtually irrelevant, "European consumers are paying ever higher copyright levies for more and more devices". This leads to a massive double burden. As an alternative, the association suggests, for example, that the device-based flat rate could be replaced by a state fund based on the Finnish model, "which would be managed by an advisory board and thus guarantee fair compensation with reduced administrative costs".

According to the merger, direct payments per copy – "supported by blockchain technology for transparency and reduction of unauthorized use" could also be considered. A cultural contribution for households or charging a fee for cultural works at the point of sale would also be conceivable. It is crucial that new models are "technology-neutral, avoid market distortions and reduce the administrative burden". We would be happy to contribute to finding a long-term solution that suits the digital age. According to estimates by the digital association Bitkom, IT companies have been paying around 70 million euros a year for the levy since 2014. The lobby organization has already argued in favour of switching to individual remuneration for authors with the help of digital rights management (DRM) systems, but was unsuccessful.

(mki)