Submissions
DG Internal Market and Services
European Commission
B-1049 BRUXELLES
BELGIUM
14 July 2006
Dear Sir/ Madam
STAKEHOLDER CONSULTATION ON COPYRIGHT LEVIES IN A CONVERGING WORLD
I am writing in response to the current stakeholder consultation being conducted by the European Commission Directorate General for the Internal Market and Services, which is examining key issues that arise in relation to the operation of copyright levies.
Equity is a trade union representing 40,000 performers and creative personnel in the UK. Our members work across the whole spectrum of entertainment, including a range of media and creative industries covered by the scope of the European Commission's consultation, such as visual broadcasts, sound recordings and film. Equity is also a member of the European group of the International Federation of Actors (FIA) and would endorse the points made in its more detailed submission on this matter.
The UK is one of a minority of only five EU member states that does not operate a copyright levy. Therefore, it is difficult for Equity to provide a detailed response to the individual questions raised in the consultation document regarding the administration, distribution and operation of copyright levies. Nevertheless, I would like to provide the Commission with a number of comments on the issues raised by the consultation.
COPYRIGHT LEVIES AND THE UK
Despite the fact that the UK does not operate its own copyright levy, the collection and distribution of remuneration from private copying to UK performers and other rights holders, mean that it still forms an important part of the overall intellectual property framework. As a result it is an essential element that supports our creative industries and ensures investment in the individual creators, both now and in the future. Consequently, Equity supports the operation of private copying levies throughout the EU, and would like to see an extension of this model to the UK.
An extension of a private copying levy would provide greater rewards for performers, but also compensate for a more practical "fair use" exception for individual consumers, particularly in a converging world. Equity believes that the increased availability of personal video recorders (PVRs) and the downloading of audiovisual material over the internet, effectively represents the provision of perfect copies of copyright material for life. Private recording of this type far exceeds the intended remit of the current legal exception in the UK, which permits private copying only for "time-shifting" purposes.
In addition, the vast majority of UK consumers would not be aware that it is (theoretically) illegal for them to "format shift" material from CDs onto devices such as i-Pods and MP3 players. The fact that this type of consumer behaviour is so widespread (and is actively encouraged by the new technology available), makes it difficult to sustain an argument for retaining the current system, which is not respected or understood, and criminalises so many private consumers. In the UK, Equity therefore advocates a broader exemption to the reproduction right in the Copyright Designs and Patents Act, coupled with a private copying compensation system for rights-holders.
DIGITAL RIGHTS MANAGEMENT SYSTEMS (DRMs)
On the related issue of DRMs, Equity does not accept that these negate the need for private copying levies. DRMs can be cracked relatively quickly by professional pirates, are incapable of distinguishing between fair dealing and unauthorised copying and do not guarantee financial return for performers.
Moreover, a reliance on DRMs will require Governments and enforcement bodies to spend disproportionate amounts of time and money on policing and monitoring cases where the technological protection is breached. Similarly, it is unrealistic to expect all individual rights holders to have the resources to pursue private prosecutions every time DRM protection is broken and material is copied in a manner that breaches the original licence.
Some stakeholders - particularly phonogram and film producers and the information and communication technology (ICT) industry - believe private copying could make business models using DRMs more difficult to develop. However we are not aware of any evidence that this has been a key factor in tackling this difficult issue in EU states, or indeed Canada and Japan where such levies exist.
Therefore while DRMs may provide a helpful enhancement in the flexibility of the propositions that can be offered to consumers in the short term, a levy system is a more sensible and pragmatic approach capable of providing clarity and transparency for the future. This would enable consumers and legislators to more easily discern between piracy and legitimate private copying, creating a renewed legitimacy in a copyright system sometimes viewed as anti-citizen.
It should also be noted that there have been signs of increased pressure from consumers to enable greater inter-operability of DRMs, with legislation brought forward in France and under consideration in Denmark. This would prevent the current lock on content from providers such as Apple's iTunes, which restricts downloads exclusively to Apple products. Equity believes that improved inter-operability is an admirable goal, but the extent of adjustments to the use of DRMs will ultimately be decided by the market. Nevertheless, if this trend continues a levy system would ultimately support this more open exchange of content, while protecting revenues for both performers and producers.
OTHER ISSUES RAISED
Many of the other issues raised in the consultation document are matters principally for legislators, regulators and collecting societies to determine in consultation with stakeholders. However, Equity would also wish to make the following comments on some of the key questions in the consultation.
- It is misleading to state that the obligation to pay the levy is imposed on the manufacturer, importer or distributor, with no mention of the end consumer who ultimately picks-up a small cost on the price of blank media and/or equipment (question 1), with little discernable market impact.
- The growth of technology-protected sales referred to in the document (question 4) does not illustrate an enthusiasm for this type of product amongst consumers. It merely demonstrates that record companies have sought to extend the presence of DRMs, often in a manner that is unpopular with consumers, due to the fact that these measures are included without their knowledge or consent.
- Private copying is undoubtedly a cause of financial disadvantage to rights holders (question 5). Therefore a private copying levy is a perfectly appropriate response. At this moment in time, no other solution is capable of satisfying both consumer demand for legitimate private copying, and the creators' right to fair compensation for the ancillary use of their material.
- Levies must seek to take account of convergence (question 6 and 7). For precisely this reason there are valid reasons to continue to impose levies on equipment or media that are not "dedicated" to copying - including the examples of convergence provided on page 10. The extent of dedication to private copying is not, and has never been, the determining factor in applying levies. The examples provided of equipment and blank media that were subject to levies in the past, were also used for a range of purposes and not only for private copying. For example a cassette deck or video recorder could also be used for listening or viewing material.
I hope that you find these comments helpful. If you require further information please contact Matt Payton, Equity Research & Parliamentary Officer on 020 76700260 or at mpayton@equity.org.uk.
Yours sincerely
Christine Payne
General Secretary
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