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European societies formally launch their speedy digital rights hub

By | Published on Tuesday 21 July 2015


Good news for fans of joined up collective licensing, the UK, German and Swedish music publishing sectors’ collecting societies – PRS, GEMA and STIM respectively – have formally signed their long planned alliance to create what they are calling the ‘hub’, but which I will be referring to as Prezgaymastim.

As previously reported, the new joint venture entity being created by the three societies aims to make the licensing of multi-territory digital services in Europe more efficient, both by offering combined licences covering PRS, GEMA and STIM repertoire, and by uniting the three societies’ data and royalty processing operations for digital services operating in multiple countries. The hub will also tap into the existing PRS/STIM combined database set-up ICE, which will be updated to incorporate GEMA data.

The aim is to reduce the time and cost it takes to process the flood of data that comes in to the music publishing sector each and every month from streaming services. With no central repertoire database of song ownership, DSPs have to provide all the publishers and collecting societies they have licences from with a complete list of every track streamed, and then it’s up to publishers and societies to claim the royalties they believe they are due.

By combining efforts, the three societies hope to make that big task more efficient, plus joined up databases mean that the chances of two societies both claiming 60% of a song – which usually delays payment – will be less likely to happen.

Of course, in Europe the big five publishers negotiate direct deals with multi-territory streaming services via joint venture operations with one or more of the collecting societies. In Europe, song copyrights are routinely split up, so that some elements (such as mechanicals) are owned by the publishers and others (such as performing rights) are controlled by the societies, but under this direct dealing system the publisher gets to negotiate all elements of the copyright, subject to relevant societies approving terms.

The new Prezgaymastim hub won’t affect any of this, with the joint licence offered by the new joint venture covering that repertoire not currently subject to direct licensing. But it will nevertheless mean that streaming services looking to operate across Europe will need two fewer licences in place to cover song rights.

Plus those publishers doing direct deals will be able to opt to use the new hub to administer digital royalties, with Sony/ATV’s direct dealing vehicle Solar (a joint venture with PRS) and BMG’s ARESA (a joint venture with GEMA) set to do just that.

Most of this we pretty much already knew, but the whole operation is now formally in place. Finalising the alliance was delayed for a time by the European Commission – which expressed some competition law concerns about three big collecting societies merging some of their operations – but it green lighted the hub plans earlier this year.

As part of the deal, GEMA becomes a shareholder in the existing ICE data alliance between PRS and STIM, while PRS For Music boss man Robert Ashcroft has been confirmed as CEO of the new JV’s licensing and professional services arm, meaning he will oversee the establishment of the new operation, which hopes to start granting joined up licences to multi-territory digital services from next year.

Announcing all this, Ashcroft said: “We are immensely proud to announce the completion of PRS For Music, STIM and GEMA’s agreement to launch the first integrated music licensing and processing hub. We had a vision five years ago to support the fragmented music market by developing a hub that would encourage the aggregation of music repertoires and offer state-of-the art rights management systems run from a single, authoritative database. Today we are bringing that vision to life with the launch of this brand new company. It’s a defining moment for the music industry”.

STIM CEO Karsten Dyhrberg Nielsen added that “the hub is unique – there is nothing else that offers access to a vast repertoire of European music and with the efficiency and power of new technology”, while GEMA chief Dr Harald Heker said: “We have designed a transformative and very flexible service offering to fit the needs of different rightsholders and DSPs … the integrated systems have been built from the ground up to provide unparalleled speed, accuracy and economies of scale”.

So, everyone better hold on tight, or they may be toppled over by the sheer speed with which digital royalties will work their way through the system once the hub is fully operational.

Elsewhere in PRS news, the UK society yesterday announced the appointment of two new external directors to its executive board: former BBC, ITV and Channel 4 exec Michael Grade and recently retired media, IP and commercial law man Paul Mitchell. Let’s just hope they are both speed junkies, or they might feel out of place in this bold new world of collective licensing.