Usually, a service provider acquires a licence from the rightholder that covers all copyright relevant acts involved in the provision of the service, including the reproduction of copyright protected content by the end user. Such licensing agreements also reflect the view and the expectations of the end user.
A person paying for e.g. the download of a song expects that this payment does not only cover the first download of that song onto his or her personal computer but also the subsequent copying of that song to a certain number of his or her mobile devices, as determined by the usage rules of the service provider. Similarly, a person subscribing to a music streaming service is usually not only paying for the online streaming to his or her device/s but also for the possibility to create “playlists” that can be listened to when “offline”.
Some stakeholders, however, argue that the consent of e.g. an author to the reproduction of his or her work for private purposes does not have any legal effect, even if explicitly given in a licence agreement. They say that a rightholder’s consent, if given within the scope of an exception, is null and void.
Arguing that the making of a copy for private purposes can never be allowed by the rightholder but only by way of the private copying exception paves the way for further argument that all such copies require fair compensation in the form of levies, regardless of whether they are already covered by a licence agreement or not. Other stakeholders warn that this would mean that levies would be due on top of the licence fee that was contractually agreed between the service provider and the rightholder and intended to pay for all copyright relevant acts which are part of a given service.
Moreover, they are of the view that rightholders should not be bound to a levy regime against their explicit will, but rather be allowed to choose a contractually agreed form of remuneration instead. They further argue that a copy made for private purposes with the consent of the rightholder cannot cause any ‘harm’ that requires fair compensation in the form of levies.
It was also submitted that some agreements reached in the market could deliberately carve out acts of private copying from the scope of a licence for an online service, in order to lay ground for levy claims on top of the licence fee.
It should be kept in mind that the levy system was put in place because, in the offline environment, rightholders did not have any other possibility to be compensated for copies made by end users. The online environment, however, allows a much more targeted provision of copyright protected content to consumers, including with regard to copies made for private purposes. Content can now be delivered to consumers in the exact way they expect to receive it.
Licence agreements reflect these new ways of distributing content to consumers and allow rightholders to be adequately remunerated for the exploitation of their works and other protected subject matter. The use of so called “technical protection measures” enable the contractually agreed scope of a licence to be mirrored, and acts that go beyond what rightholders have been paid for in the form of a licence fee to be prevented. They are widely used to sustain different business models (for instance downloads versus streaming) and strengthen the case for direct licensing.
It would be best for rightholders to fully embrace the new direct licensing opportunities in the digital environment. Licensing fees are already by far the most important source of income for rightholders, and are well suited to reflect the actual use of content and to ensure that the rightholders are paid for acts of copying that also take place in this context.
Authors and performers often transfer their exclusive rights in a work or other protected subject matter to the producer or the publisher. Some stakeholders claim that if such a work or other protected subject matter is then licensed to e.g. a service provider, authors and performers do not get a share of the licence fee, and need to be satisfied with the payment they received for the initial transfer of their rights. Such authors and performers sometimes suffer from a lack of bargaining power.
However, private copying levies are not the right way to address this imbalance. Mandatory rules in copyright contract law or labour law would be a better manner to ensure that authors and performers receive an adequate share when their works and other protected subject matter are exploited. Another option would be to help them to organise themselves better in order to conduct negotiations more successfully. The principle of subsidiarity, however, should be given specific consideration when examining this issue at EU level.
Licensed copies should not trigger the application of levies. The opposite view would pave the way for double payments. Consumers cannot be expected to show understanding for such double payments. Authorised – i.e. licensed – reproductions do not cause any ‘harm’ that would require fair compensation.
Clarify that copies that are made by end users for private purposes in the context of a service that has been licensed by rightholders do not cause any harm that would require additional remuneration in the form of private copying levies.