Published: June 30, 2005, 6:21 AM PDT

By Reuters

A European Union initiative to foster EU-wide licensing of online music businesses and royalty collection is due out in early July, a source close to the situation said Thursday.

The goal of the measure is to help spur jobs and creativity.

At present, anyone who wants to open an online store for music has to run it country by country by approaching the royalty collector in each member state.

This complexity can put people off launching new online services because of the bureaucratic maze they must navigate.

A study for the European Commission of how to create an EU-wide market for online music venues such as Apple Computer`s iTunes favors allowing organizations to offer a royalty collection service across the 25 member states, the source said.

The paper also favors giving commercial users of music a one-stop-shop option of buying a single license that would be valid across the EU, the source said.

The Commission is expected to start a public consultation later this month with a formal proposal likely in the autumn, the source added.

Music, due to its appeal to an international, mass audience and its easy access over the Internet, is seen as the best starting point for streamlining online copyright management in the EU, the study concludes.

``Music is uniquely placed as a starting point for new European online services in line with the Lisbon goals to help create competitiveness,`` the source said.

``The single European license for online music use requires the Commission to rethink existing models for copyright licensing,`` the source said.

In 2003, more than 100 royalty collectors gathered several billion euros of royalties on behalf of more than a million copyright holders, according to the study seen by the source.

Artists and music publishers should be given a choice of pan-European royalty collectors to better safeguard that royalties earned on sales outside their home countries are passed on to them speedily and with the lowest amount of deductions by middlemen, the source added.

The study said a new EU system would require the rights managers to actively compete for the business of authors, composers and other creators. The new rights managers emerging from the process would be a powerful counterbalance to the giant media groups now emerging.

The study said that legislation would lead to the emergence of a handful of online, cross-border copyright management companies that would collect royalties on behalf of musicians.

This would replace a complex web of country-based systems that stifle competition and hinder the fair transferral of royalties, the source said after looking at the study.

Many industry players say in the study that they would welcome EU legislation, the source said.

PPL, a U.K. group that collects royalties, told the study`s authors that a true internal market in the EU for handling copyright music would help ensure that artists get royalties in line with actual airplay from all member states.

Some royalty collectors are seen as not being accountable to nondomestic copyright holders.

The Association of European Radios, the Europe-wide trade body of private and commercial radio stations, told the Commission it favored a single EU-wide license granted by a single royalties collector in one transaction that would cover all member states.

Previous Next Copyright holders are often barred from going directly to a royalty collector in another country, while the collectors themselves are stopped from being able to offer a pan-European service.

Doing nothing is not an option, according to the study, as more and more people are buying and playing music in a digital format that makes national boundaries irrelevant.

But the management of royalties collection has remained essentially national and can discourage businesses from introducing new services, the source said the study found.