Territoriality in music refers to the licensing of musical works to distributors or broadcasters based on linguistic and/or cultural markets. Music publishers are already licensing multi-territorially and as rightsholders, they don't impose territorial restriction but respond to the demands of the service providers. Music publishers have the incentive to licence to as broad a territory as possible since this will increase the revenue on behalf of their clients: songwriters and composers.
The territorial application of copyright does not preclude EU-wide or cross-border licensing models as currently, EU consumers have access to over 43 million licensed songs on more than 230 legal digital services. The territorial nature of copyright reflects the linguistic diversity of the EU and has been recognised for centuries by many parties, including the Court of Justice of the European Union (CJEU). It neither encourages nor impedes cross border trade, nor is it an obstacle to the single market. On the contrary, it plays an important role in enhancing Europe’s various dynamic cultures, while allowing its unique cultural heritage to flourish. According to a recent IFPI study, in the 12 leading music markets, local repertoire accounts for more than 70% of the sales of the top 10 albums.
The long term agenda of European policy makers is to completely eradicate the principle of territoriality in the name of the Digital Single Market and apply the country of origin rules to all creative sectors. Currently, the draft regulation lays down rules on the exercise of copyright and related rights. These are applicable to certain online transmissions of broadcasting organisations and retransmissions of television and radio programmes. Country of origin rules only applies to ancillary online services, which do not cover music. ICMP however finds the existing definition of an ancillary online service hard to comprehend and calls for it to be clarified.
The most important action to increase the cross-border availability of content services in the single market is inextricably linked to the protection of rightsholders. In order for the Digital Single Market to fully develop, existing measures related to piracy and enforcement of IPRs need to be effectively implemented by EU Member States. Today, European citizens have access to a vast, robust and ever-expanding online music offering. However, the roll-out of even more services is slowed down in a number of Member States due to:
- Variable broadband penetration rate
- Not robust enough broadband connections
- IPR infringements
- A poor e-commerce environment, e.g. slow development in micro-payments and digital signatures
- Discrepancies in fiscal policy among Member States, particularly in the field of VAT