MMW-54 -- Ringtone Licensing in Europe

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J@pan Inc Magazine Presents:
M U S I C M E D I A W A T C H
Commentary on the week's music technology news
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Issue No. 54
Wednesday, January 28, 2004
Tokyo

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CONTENTS

++ FEATURE: Ringtone Licensing in Europe

++ NOTEWORTHY NEWS:
** Yamaha to Sell Internet-Enabled Organ
** Jasrac Joins with MCSC to Protect Music Rights in China
** Index Launches New Record Label

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++ FEATURE: Ringtone Licensing in Europe

Many Japanese ringtone providers are either currently operating or
planning to launch a service on one of Europe's major carriers. At
present, the most attractive options are Vodafone Live! and European
i-mode (now in Germany, the Netherlands, Belgium, France, Italy and
Spain). In this feature, we'll look at European royalty rates and
other issues surrounding mobile music licensing.

In Europe, copyright licensing procedures differ by country, each of
which has its own collecting society similar to Jasrac in Japan. In
almost all cases, some type of license must be obtained from the
collecting society in order to operate a ringtone or true tone
download service in that country. In addition, some countries also
require the ringtone provider to obtain clearance from the publishing
company and/or the individual artist. Here is a look at the copyright
licensing procedures for some of the major European countries.

UK
In the UK, a potential ringtone provider must first obtain a license
from the Mechanical-Copyright Protection Society (MCPS). This license
requires the provider to pay 17 US cents per ringtone download or 10
percent of the total revenue generated by a particular music file,
whichever is greater. For true tones (which are like "chaku-uta" in
Japan), it is also necessary to negotiate copyright licensing with the
artist, as in the US.

Germany
The German artist rights society, called GEMA, is in charge of
handling copyright licensing for ringtones. At present, the royalty
rates for online music (which includes ringtones) is set at 15 percent
of the gross revenue earned for each download. However, artists in
Germany retain what is called "moral rights" to their work, meaning
they have the right to prohibit ringtone versions of their work if
they do not approve. At present, it appears that GEMA has not yet
settled on a system for copyright licensing of true tones.

Others
Here is a list of the collection societies and royalty rates for
ringtones charged by collection societies in other parts of Europe.

France: SACEM, 12 percent of revenue
Netherlands: BUMA/STEMRA, 12 percent of revenue
Spain: SGAE, 10 percent of revenue
Italy: SIAE, 12 percent of revenue

True tone imitations
For most European countries, the rights make a true tone version of a
song (often called the "master" rights) still reside with the
publisher and/or artist. Because it is often extremely difficult to
negotiate the rights for the master recording, some European true tone
providers, including O2, have recently taken to producing imitations
in which a cover band records a version of a popular song and then
licenses the master for a much lower fee. This is currently a hot
issue of debate in the music industry.

-- Steve Myers

Link:
"German Copyright Issues Plague Ringtone Providers" from March 2002
http://www.japaninc.net/article.php?articleID=759

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++ NOTEWORTHY NEWS

** Yamaha to Sell Internet-Enabled Organ

In brief: Yamaha announced last week that it will release an
electronic organ that can be connected directly to the Internet
without requiring the use of a PC. Called STAGEA, the organ will be
able to directly preview and download music data. It is scheduled to
start shipping on March 20.

Source:
http://www.japantoday.com/e/?content=news&cat=4&id=285165

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** Jasrac Joins with MCSC to Protect Music Rights in China

In brief: The Japanese Society for Rights of Authors, Composers and
Publishers (Jasrac) and the Music Copyright Society of China (MCSC)
announced an agreement this month to mutually protect against piracy
of music administered by the two societies. Under the agreement, the
MCSC can take legal action in China on behalf of Jasrac, and Jasrac
can do the same in Japan for the MCSC.

Sources:
http://neasia.nikkeibp.com/wcs/leaf?CID=onair/asabt/news/287620

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** Index Launches New Record Label

In brief: In partnership with Solstice, Tokyo-based Index recently
announced the start of a new record label called "Raijin." Index is
one of the largest providers of mobile content, and the new label is
expected to explore new ways of selling CDs and mobile-based digital
music.

Source:
http://www.digitalmusicnews.com/#012604index

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===============================================
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Subscribers: 2,294 as of January 28, 2004

STAFF
Written by: Steve Myers (steve@thetamusic.com)
Steve Myers is president and chief enthusiast of Theta Music
Technologies, which specializes in the development of music-related
software applications.

Edited by J@pan Inc editors: (editors@japaninc.com)

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