The Trend Setter in the Weightless Economy

Counting the Costs of Collective Rights Management of Music Copyright in Europe

Summary: As music consumption increasingly takes digital forms, Europe must modernize its collective rights management system in response. The results of this study show there is a very large market for digital music in Europe. As broadband penetration increases and competition amongst Internet Service Providers (ISPs) in Europe enhances access to the Internet, this market will grow rapidly. The market is valued at over 2.6 billion Euro in France, Germany and the UK alone. This constitutes a potential royalty market of 212 million Euro. Yet, only 49 million Euro in royalty revenue from online sources was collected by SACEM, GEMA and PRS for Music. Moreover, the majority of this revenue was collected by PRS for Music in the UK, which is the smallest of the three markets but by far the most efficient CRMO for the collection of royalties from online sources. Other nations in Europe, though significantly smaller, still represent a valuable market opportunity. The disparity between potential and actual revenue for all of the European markets suggests there are problems with the current collective rights management system. The percentage of the royalty market captured in the USA was over 4% more than the European average.