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Belgium introduces ER right on streams

By | Published on Friday 17 June 2022

Belgian Parliament

Belgium’s Parliament yesterday updated the country’s copyright laws to bring them in line with the 2019 European Copyright Directive and in doing so added a performer equitable remuneration right for streaming.

It means that performers in the country will receive at least some of their streaming royalties directly from the services, most likely via the collective licensing system.

In most countries artists receive all their streaming royalties via whichever record labels or music distributors they have done deals with. What percentage they receive of any streaming money their recordings generate will depend entirely on those deals, and could be anywhere from a few percent to 100%. The artist’s share of the money might also be paying off past advances and other upfront costs incurred by the label.

However, many artists have argued for a system in streaming more like what usually happens in radio, where performers receive royalties directly via the collective licensing system at industry standard rates, meaning the specifics of any one record or distribution deal are irrelevant.

That system usually applies with broadcast and public performance because under copyright law – in those scenarios – performers have their own statutory right to remuneration in addition to the rights of the copyright owner, which is often a label. Therefore one way to get that system going in streaming would be to get a similar remuneration right for digital written into copyright law.

When the EU copyright directive was being negotiated, some campaigned for that change to be specifically introduced into European copyright law. However, in the end, that did not happen. But article eighteen of the directive did say that performers should receive “appropriate and proportionate remuneration” from the exploitation of their work.

Once an EU directive has been passed, each EU country needs to amend their national laws so that they are in sync with the new European laws. Most of the countries that have already done that have simply copied article eighteen as written in the directive directly into their national copyright laws, aka ‘literal transposition’.

That basically means nothing changes in practical terms, because article eighteen is pretty vague. After all, who is to say what constitutes “appropriate and proportionate remuneration”? And if lawmakers cut and paste that new commitment into law without seeking to change the current system, that possibly implies that they consider the current system to be “appropriate and proportionate”.

However, some countries have written a more specific interpretation of article eighteen as they implement the directive and, in doing so, have introduced additional rights for performers. For example, in Germany, a new remuneration right for performers has been added that specifically relates to user-upload platforms.

Initially it looked like the same was going to happen in Belgium, with the country’s Council Of Ministers agreeing proposals for a new performer remuneration right relating to user-upload services back in March. Those proposals then went to the country’s Parliament where they were actually expanded so to also cover audio streaming services like Spotify. Which means there will now be ER paid on streams across the board in Belgium.

This is not unprecedented in Europe, with performers already having an ER right that applies to streaming in both Spain and Hungary even before the 2019 directive. Although it’s worth noting that these streaming ER rights generally work differently to the radio ER rights.

With radio, everything is licensed through the collective licensing system, with monies that flow through that system then automatically split between copyright owners (often labels) and performers, including session musicians.

With streaming, labels usually still license their recordings directly to the services and directly receive royalties from said services which they share with their artists. However, in addition to that a small percentage of total streaming monies flows through the collective licensing system and is paid directly to performers, again including session musicians.

That system particularly benefits artists who are still paying off unrecouped advances and such like on their label deals – and, of course, session musicians, who currently don’t receive any cut of streaming income in the countries where ER does not apply, which is most of them.

ER on streams is a contentious topic within the music industry. Most labels – major and indie – are critical of the approach, arguing that it negatively impacts on their ability to invest in new artists and means there is less flexibility when it comes to negotiating deals. Plus those artists who basically run their own labels working with distributors could actually be worse off once the admin costs of running ER and the session musician royalties have been paid.

But plenty of groups representing artists and musicians are highly in favour of ER on streams, arguing that heritage artists in particular have not properly benefited from the streaming boom because they are often stuck in old life of copyright record deals that pay lower physical era royalty rates, and those low payments might still be paying off unrecouped balances.

Some in the indie label community acknowledge that this is often a problem in the wider industry, though usually argue that a better solution than ER is for labels to pay a modern streaming royalty on all recordings oblivious of old deal terms while also writing off unrecouped balances after a period of time. Labels like the Beggars Group already do both those things, and the majors have also started paying through royalties to unrecouped heritage artists.

That big ER debate very much continues within the music industry, so it’s no surprise that the decision to introduce ER on streams in Belgium has garnered a mixed response.

Christophe Van Vaerenbergh, General Manager of PlayRight – the Belgian collecting society for performers – unsurprisingly welcomed the decision. He told reporters: “PlayRight applauds the adoption of [this] bill of law: this is a new era for neighbouring rights and a clear recognition that only a non-transferable and non-waivable right to remuneration provides sufficient and equitable protection for musicians and actors in the digital age”.

Meanwhile, Helen Smith, Executive Chair of IMPALA – the pan-European grouping for independent music companies – was critical of the law change in Belgium. She stated: “We are very concerned by the new remuneration rights introduced by this legislation. We believe these new rights are not compatible with the EU Directive – they were specifically rejected by the EU institutions at the time of adoption – and will be impractical”.

“Labels are the artists’ main partners, the main investors in new music”, she added, “and these new rules will seriously diminish their ability to take risk and invest in Belgian artists and Belgian music – a very bad timing considering that the sector was just on its way back to growth after a two-year pandemic. We sincerely hope the Belgian government will convene all stakeholders around a table to discuss the way forward”.

Supporters of ER on streams are now also wondering if what has happened in Belgium can be replicated in more European countries. The deadline for integrating the 2019 directive into national law was actually a year ago, but twelve more EU member states are still working on it.

With that in mind, Ioan Kaes, General Secretary of AEPO-ARTIS – the pan-European grouping for performer collecting societies – hopes additional ER rights might be introduced in Europe as those final countries implement the directive.

“The only excuse to be late in this implementation is the search for the best additional measures to protect performers in the online environment they are increasingly dependent on”, he said last night.

The Belgian approach is “the most comprehensive and effective” implementation of the directive, he added, concluding: “[This is] a model that the twelve countries that have yet to implement could adopt, and demonstrate to those who have opted for literal transposition that achieving a directive’s objectives is more important than achieving its deadline”.

Pro ER campaigners will likely enjoy the support of Belgian political leaders in pushing for equitable remuneration on streams elsewhere in Europe, especially when the country holds the EU presidency in the first half of 2024.

Commenting on the new copyright reforms in his country, Belgium’s Minister Of Economic Affairs, Pierre-Yves Dermagne, said: “The addition of remuneration rights for online exploitations was made at the request of the artists. It empowers them to effectively receive a remuneration and during the upcoming Belgian EU presidency in 2024, we want to make an effort to generalise this system in the EU”.

This story is discussed on this edition of our Setlist podcast.