EN    EN EN 
 
EN 1   EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 16.7.2008 
SEC(2008) 2287 
  
COMMISSION STAFF WORKING DOCUMENT 
 
accompanying the 
Proposal for a 
 
COUNCIL DIRECTIVE 
 
amending Council Directive 2006/116/EC as regards  the term of protection of copyright 
and related rights 
  
IMPACT ASSESSMENT ON  
THE LEGAL AND ECONOMIC SI TUATION OF PE RFORMERS AND 
RECORD PRODUCERS IN THE EUROPEAN UNION  
{COM(2008) 464 final} 
{SEC(2008) 2288} 
 
EN 2   EN EXECUTIVE SUMMARY  
This Impact Assessment (IA) analyses the econ omic and social situat ion of performers and 
record producers in the European Union.  
With respect to performing artists, this IA shows that many Europe an musicians or singers 
start their career in their early 20's. That means that when the current 50 year protection 
ends, they will be in their 70's and likely to  live well into their 80' s and 90's (average life 
expectancy in the EU is 75 years for men and 81  years for women). As a result, performers 
face an income gap at the end of their lifetimes, as they lose ro yalty payments from record 
companies as well as remuneration due for th e broadcasting or public performance of their 
sound recordings. The latter income streams ar e paid to performers di rectly through their 
collecting societies and are not affected by their contractual arrangements with the record 
companies.  
For session musicians, who play background music,  and lesser known artists, that means that 
broadcasting and public performance income decreases when performers are at the most vulnerable period of their live s, i.e. when they are approach ing retirement. Once copyright 
protection expires, they will also lose out on po tential revenue when their early performances 
are sold on the Internet.  
Moreover, when their rights expire performers are exposed to potentia lly objectionable uses 
of their performance which are harmful to their name or reputa tion. Performers are also at a 
disadvantage as compared to authors whose works are protecte d until 70 years after their 
death. This could be seen as unfair since pe rformers are nowadays not only just as necessary 
as authors but also more identifiable with the commercial success of a sound recording.  
As regards producers of sound recordings, the IA shows that their principal challenge is peer-
to-peer piracy and their n eed to adapt their busi ness to the challenges  of dematerialised 
distribution. In these circumstances, they face th e challenge of keeping up the steady revenue 
stream necessary to invest in new talent. Record companies claim that they invest around 
17% of their revenues in the d evelopment of new talent, i.e. to sign new talent, promote 
untried talent and produce innovat ive recordings. Therefore, a longer term of protection 
would generate additional in come to help finance new ta lent and would allow record 
companies to better spread the risk in develop ing new talent. Due to uncertain returns (only 
one in eight sound recordings is successful) and so-called 'information asymmetries' such 
revenue is often not avai lable on capital markets. 
The impact assessment analyses the economic, so cial and cultural impacts of six options 
This IA presents a total of seven options, but one option was discarded before the analysis of 
impacts. Apart from the standard option of 'd oing nothing' and letting the music market 
develop, the IA analyses two opti ons linked to the term of pr otection for sound recordings and 
three options that would not require a change  in the current terms that apply to sound 
recordings.  
With respect to the term of protection this IA looks at the option of extending the term of 
performers to 'life or 50 years' , whichever is longer. This op tion would enhance the status of 
performers and, by linking protection to their l ifetime, recognise the individual and creative 
nature of their performances. This option woul d not only apply to the performers' exclusive 
 
EN 3   EN rights but also to the variety of broadcasti ng and public performance rights that are not 
transferred to the record companies.  
Another option involving the term of protection would be to extend the current 50 year term to 
95 years for performers and record companies. This  option ensures full equivalence with the 
longest term of protection in the world. In order to ensure that the benefit of term extension 
accrues to performing artists, especially sessi on musicians that have tr ansferred their related 
right against a one off payment, the extension of the term of protection for record companies 
should be accompanied by the payment of a certain percentage of record companies' 
increased revenues into a fund dedicated to improving the situati on of session musicians. 
Again, as in the 'life or 50 year' option, the remuneration for broadcasting and public 
performance would remain with the performer for 95 years.  
Another set of options looks at ways to address the probl ems identified above without 
modifying the term of protec tion. These options comprise va rious possibilities which could 
improve the financial situation and moral rights of performers. These measures, of course, 
could be used either as alternatives to a te rm extension or as measures to complement an 
extension of the term of protection. Several of  these measures could only be the subject of 
Community legislation. 
This IA describes how performers contractual ly transfer their exclusive rights to record 
labels, (including their reproduction, distributio n, rental and making avai lable rights, but not 
their remuneration claims for broadcasting and public performances. In  order to limit the 
effect of the systematic contractual transfe r of performers' exclusive rights to record 
companies, the IA examines the possibility of an 'unwaivable' right to remuneration to which 
performers would remain entitled even after hav ing transferred their making available right 
to a record producer. The creation of a claim for equitable remuneration for online sales or 
other forms of making performances available online is an interesting option, whose time may 
yet come. However, at this stage, the uncertain ties surrounding the issue of who should pay 
this 'equitable remuneration' are such that the likely effects of this option cannot be quantified 
with any reasonable measure of certainty. In  light of the uncertainties surrounding the 
practical administration of the claim for equ itable remuneration, further study on this option 
is imperative. While in the futu re this option might well be introduced to enhance performers' 
participation in revenue generated online, it is too early to disc uss at this stage. This option 
was therefore discarded before  the analysis of impacts. 
Another option analysed is to strengthen perfor mers' moral rights. The scope of their moral 
rights could be harmonised to include a right  to restrict derogatory uses of their 
performances.  
A further option is to ensure that 'use it or lo se it' clauses are included in agreements between 
performers and record labels. This means that, if a record company is unwilling to re-release 
a performance during the extended term, the pe rformer can move to ano ther record company 
or exploit the record himself.  
The impacts of the different options 
All options are assesse d against the following six operational objectives : (1) gradually align 
authors' and performers' protection; (2) in crementally increase the remuneration of 
performers; (3) diminish th e discrepancies in protection between the EU and US; (4) 
 
EN 4   EN incrementally increase A&R resources, i.e., the development of new talent; (5) ensure 
availability of music at reasonable prices; and (6) encourage digitisati on of back catalogue.  
The IA concludes that 'doing nothing' is not a preferable option. If nothing was done, 
thousands of European performers who recorded in  the late fifties and si xties would lose all 
of their airplay royalties over the next ten years. This would have considerable social and 
cultural impacts. Equally, the sound recording industry would be obliged to cut down on the 
creation of new sound recordings in Europe.  
The IA considers the impact of options not in volving the term of performers' and record 
producers' rights (options 3a, b, c and d). Op tion 3a (unwaivable right to equitable 
remuneration) appears premature as it is unclear  who would pay for th is remuneration and it 
is hard to estimate the financia l benefit it would bring. Option 3b (the strengthening of moral 
rights), has no financial impact on performers and record producers. Option 3c, the 'use it or 
lose it' clause, would be bene ficial to performers by allowing them to make sure their 
performances are available on the market. It w ould also be beneficial for cultural diversity. 
Option 3d, the fund to be set up by record co mpanies, would be very beneficial to non-
featured performer. Record producers, however, would have to pay into the fund at least 20% 
of the additional revenue genera ted by the term extension. Ho wever, the IA concludes that 
marketing sound recordings would remain profit able for record companies despite having to 
pay 20% towards thus fund.  
Options involving a term extension (2a "life or 50 years" and 2b "95 years for performers and 
record producers") seem to be rather more suitable in contributing towards the six policy objectives. Both options 2a and 2b bring financi al benefits to performers and would thus 
allow more performers to dedicate more  time to their artistic activities.  
Option 2a, by linking the term to the life of a pe rformer, would contribute to aligning the legal 
protection of performers and aut hors. It would reflect the pe rsonal nature of performers' 
artistic contributions and recogni se that performers are as e ssential as authors to bringing 
music to the public. It would also allow performe rs to object to derogatory uses of their works 
during their lifetime. 
In addition, option 2b would increase the pool  of A&R resources available to record 
producers and could thus have an additional positive impact on cu ltural diversity. This IA 
also demonstrates that the benefits of a term extension are no t necessarily skewed  in favour of 
famous featured performers. While featured  performers certainly earn the bulk of the 
copyright royalties that are negotiated with the record companies, all performers, be it 
featured artists or session musi cians, are entitled to so-cal led 'secondary' income sources, 
such as single equitable remuneration when the sound recording incorporating their performances is broadcast or performed in pub lic. A term extension would ensure that these 
income sources do not cease during the performe r's lifetime. Even incr emental increases in 
income are used by performers to buy more tim e to devote to their artistic careers, and to 
spend less time on part time employment. Moreo ver, for the thousands of anonymous session 
musicians who were at the peak of their careers in the late fifties and si xties, 'single equitable 
remuneration' for the broadcasting of  their recordings is often th e only source of income left 
from their artistic career.  
In addition to ensuring the increased availab ility of A&R, option 2b is also easier to 
implement than option 2a, becaus e the latter option is linked to the life of individual 
performers. As the example of co-written works demonstrates, linking a copyright to the life of 
 
EN 5   EN individual contributors raises complex issues when several performers contribute to a sound 
recording. These would increase the legislat ive and administrative bur den on Member States 
and create legal uncertainty, bec ause the term of protection to the term of protection would 
no longer be linked to a certain and uniform dat e, i.e., the publication of the phonogram that 
contains the performance, but to the sometim es very different lifetimes of individual co-
performers. 
What are the likely provisions in the proposal to  ensure that it is the performing artists that 
benefit?  
In order to ensure that the benefit of term extension would accrue to performing artists, 
especially session musicians, th is IA concludes that record  companies should contribute 
towards a fund for session musicians (option 3d). In order to have the financial volume necessary to ensure real benefits for session musicians, this IA proposes that the record companies set aside at least 20%  of the revenue that accrue s during the extended term for 
session musicians. The fund's impac t on session musicians would be  positive, as the average 
performer' additional annual revenues duri ng a 45-year term would almost triple 
In respect of featured artists, the Commission' s analysis concludes that  original advances 
paid by the record companies should no longer  be set off against roya lties in the extended 
term. That means the artist would get all the royalties during the extended term.  
The IA also proposes that a term extension shoul d be accompanied by a 'use it or lose it' 
provision (option 3c). This means that, in the event that a record company is unwilling to re-
release a performance during the extended term , the performer can mo ve to another record 
company or make his performance available himself.  
Empirical studies show that the impact of a term extension would not be negative for 
consumers.  
Empirical studies show that the price of sound recordings that  are out of copyright is not 
lower than that of sound recordings in copyri ght. This is true in relation to statutory 
remuneration claims and for the sale of CDs. 
The 'single equitable remuneration' due for br oadcasting and performances  of music in public 
venues would remain the same as these payment s are calculated as a percentage of the 
broadcasters or other operators' revenue. As fa r as CD sales are concerned, very few studies 
analyse the price between prices of in-copyright  and out-of copyright recordings. A study by 
Price Waterhouse Coopers concluded that there was no systematic difference between prices 
of in-copyright and out-of copyri ght recordings. It is the most  comprehensive study to date 
and covers 129 albums recorded between 1950 and 1958. On this basis, it finds no clear 
evidence that records in which the related rights have expired are systematically sold at lower prices than records whic h are still protected.  
Other studies have been consider ed in analysing the impact of copyright or related rights on 
prices. Most of them focus on books. However, even in this category, either no overall price difference is found between the samples of book s in- or out-of-copyrig ht, or, the impact of 
copyright on the price is extremely model-de pendant and therefore the estimates obtained 
cannot be seen as very robust. Given the lack of  widely accepted models  and the length of the 
time span, it is fair to sa y that there is no clear evidence that  prices will increase due to term 
extension.  
 
EN 6   EN In addition, overall, the extended term shoul d have a positive impact on consumer choice and 
cultural diversity. In the long run, this is because a term extension will benefit cultural 
diversity by ensuring the availability of res ources to fund and develop new talent. In the short 
to medium term, a term extension provides r ecord companies with an incentive to digitise and 
market their back catalogue of old recordings. It  is already clear that  internet distribution 
offers unique opportunities to market an unprecedented quantity of sound recordings. 
 
EN 7   EN International dimension 
The IA also looked at the trade  implications of a longer term  of protection and provisionally 
concludes that most of the additional revenue collected in an extended term would stay in Europe and benefit European performers. This is good for promoting Europe's performers 
and the cultural vibrancy of European sound recordings.  
 
EN 8   EN 1. P ROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  
A Commission Staff Wo rking Paper on the review of the EC  legal framework in the field of 
copyright and related rights1 was published on 19 July 2004. Interested parties were invited to 
submit their comments by 31 October 2004. Full in formation can be found at the following 
link to the DG MARKT copyright unit web page set aside specifically for this exercise: 
http://ec.europa.eu/internal_marke t/copyright/review/consultation_en.htm . Even though all 
copyright issues were open for comment, of the 139 contributions received, 76 position papers commented on Directive 93/98/EC harmonising th e term of protection of copyright and 
certain related rights
2. More specifically, 36 organisations and stakeholders were in favour of 
extending the protection of related rights (p erformers and record producers) while 29 
indicated that they were against any extensi on. Table 1A indicating the summary of these 
submissions can be found in the Annex, section 1. 
In 2005, the Commission contracted out a study entitled "The recasting of copyright for the 
knowledge economy". Part of this study was to cons ider the term of protection for performers, 
record companies and broadcasters in Europe  in general and whether these related rights 
holders are at a disadvantage wh en compared to those in the USA and other major economic 
competitors (see Annex, section 4). The study was completed in December 2006 and 
published on the Commission's web site on January 2007.3 During 2006-2007, Commission 
services had meetings with a variety of stakeholders on a bilateral basis4 to discuss relevant 
issues in more detail. A ques tionnaire was prepared by the Commission and distributed to 
major stakeholders in the framework of these bilateral discussions. Mo re or less detailed 
responses were received from performers' associations and the recording industry.5 It was not 
possible to establish a steering-group on th e subject of this impact assessment. 
The Commission also analysed other independen t studies such as the "Gowers Review of 
Intellectual Property" (2006) in the UK, "The  Economy of Culture in Europe" (2006), by 
Kern European Affairs, "Performers' Rights in European Legislation: Situation and Elements 
for Improvement" (2007), by AEPO-ARTIS, "What are the Consequences of the EU extending Copyright Length for Sound Recordi ngs" (2006), by Liebowitz, "The Impact of 
Copyright Extension for Sound Recordings in  the UK" (2006), by Price Waterhouse Coopers, 
"Review of the Economic Evidence  Relating to an Extension of  the Term of Copyright in 
Sound Recordings" (2006), by the Cent re for IP and Information Law. 
                                                
 
1 SEC(2004) 995 of 19 July 2004. 
2 Directive 93/98/EEC has been superseded by a codified version (Directive 2006/116/EC of 12 
December 2006 on the term of prot ection of copyright and certain related rights, OJ L372 of 
27.12.2006, p.12 (hereafter  referred to as the "Term Directive").  This codified version did not include 
any substantive changes. 
3 http://ec.europa.eu/in ternal_market/copyright/docs/studies/e td2005imd195recast_report_2006.pdf 
4 Telecom Italia/ETNO, FIM/FIA, IFPI, PPL, MPA,  GIART, Eurocopya/Eurocinema, Naxos, EMI, AER, 
EBU, BEUC, British Library, ACT 
5 AEPO, BEUC, IFPI, Naxos.  
 
EN 9   EN 2. P ROCEEDINGS BEFORE THE IAB 
A draft version of the impact assessment was discussed before the Impact Assessment Board 
(IAB) on 2 April 2008. In the course of this meeti ng the IAB raised a series of issues that DG 
MARKT undertook to address. In particul ar, the IAB asked for clarification on: 
– The relationship between the EU acquis and in ternational conventions governing the field 
of performers and producers rights; 
– The scope of the intended initiative, especia lly as the impact assessment distinguishes 
between performers and producers in the musi cal and the audiovisual sectors; and  
– The events that triggered the initiative.  
2.1. International conventions and the EU acquis 
The impetus behind the initiative can best be explained against the b ackdrop of international 
conventions. These also explain the distinc tion between performers and producers in the 
musical and audiovi sual fields.  
Performers, whether in the musical or in th e audiovisual field, are not covered by the 1886 
Berne Convention on Literary and Artistic Work s. Although several proposals were made to 
include performers and performances within the scope of the Berne Convention at later 
revision conferences, none of these proposal s found sufficient support. The need for 
protection of performers and record producer s was only perceived as imminent with the 
proliferation of phonographic tec hnology and the subsequent intr oduction of sound recordings 
and broadcasting. In these circumstances, pe rformers and producers were first granted 
protection against a variety of unauthorised ac ts in the 1961 Rome Convention. Both groups 
of rightholders were considered jointly under th e Convention not because of the similar nature 
of their rights, but because of the developmen t, in the 1950s, of commercial markets for sound 
recordings. Most significantly, to compensate  both rightholders for the relatively narrow 
scope of their exclusive rights (there is  no right governing the communication of 
performances to the public), the 1961 Rome C onventions provides both groups of rightholders 
with a right to receive 'single equitable rem uneration' for the broadcasting or communication 
to the public of a commercially published pho nogram. Significantly, this important claim to 
equitable remuneration only covers the br oadcasting or public communication of a 
phonogram and would thus exclude audiovisual performers or f ilm producers from its scope.  
It is also relevant to note that film producer s, based on Article 14bis of the Berne Convention, 
already enjoy a far better status than the produ cers of sound recordings. By virtue of this 
Article, a film producer can either be granted co -ownership in the copyright that applies to 
authors (like in the UK or Irela nd) or benefit from a variety of  statutory assignments (Italy, 
Austria) or presumptions of copyright owners hip in their favour (Bel gium, France, Germany, 
Luxembourg, the Netherlands or Spain). Ownersh ip of copyright, of course, entitles film 
producers to a copyright term that spans the life of the film authors, plus seventy years. In 
respect of the term of protection, the situati ons of film and phonogram  producers thus differ 
fundamentally. 
The 1996 WIPO Performances and Phonograms Tr eaty (WPPT) upgraded musical performers 
and producers rights by introduc ing a new right of 'making av ailable' that is tailored 
essentially to cover digital downloads offere d on an individualised basis. The 1996 WPPT 
 
EN 10   EN does not cover audiovisual performances or pr oductions. Indeed, a 2000 conference at WIPO 
aimed at introducing a WIPO Audiovisual Performances Tr eaty ended in failure as 
delegations were unable to agre e on provisions governing the tran sfer of rights of performers 
to film producers. 
The EU acquis essentially mirrors the above me ntioned international conventions. Like the 
Rome Convention, the acquis only provides  for equitable remuneration in case of 
broadcasting or communication to the public of  a commercial sound re cording (cf. Article 
8(2) of Directive 2006/115) and there are no comparable provisions governing audiovisual 
performances. Audiovisual performances do, however, benefit from the reproduction right 
now contained in Article 2 of Directive 2001/29 and would thus also appear eligible for levies 
that apply in case of private reproductions.  
2.2. The scope of the intended initiative 
The impact assessment focuses not only on the term of protection that would apply to 
performers' and producers' exclusive rights but also on the (identical) term that governs a 
series of highly relevant 'secondary' remunerati on claims. Special emphasis is put on the claim 
to receive equitable remunerati on for broadcasting and communica tion to the public it is not 
transferred to producers but admini stered by performers' collectin g societies directly. As this 
claim does not apply to audiovisua l productions, the analysis of th e impacts of term expiry is 
limited to musical performances and phonograms. 
In addition, as mentioned above, the term applic able to phonogram producers differs from that 
applicable to film producers. As the latter  usually enjoy copyright  ownership, a statutory 
assignment of the author's rights or at least a presumption of such a transfer, copyright for 
film producers essentially lasts fo r seventy years after the death of the last surviving author 
while the phonogram producers' right expires 50 years after the recording was made or 
published. This, again, explains  why the impact assessment deals with phonogram producers 
only. 
2.3. Events triggering the term initiative 
Since promulgation of the 2004 Staff Working Pape r, a series of studies on the social and 
economic situation of the European performi ng artist were conducted and published. Most 
notably, a study by AEPO ARTIS 'Performers Right s in European Legislation: Situation and 
Elements for Improvement' have brought the social  and economic difficulties of performers to 
the fore. This study has also revealed the crucial importance that secondary remuneration schemes play in rewarding the creative effort s of performers. For many performers, equitable 
remuneration collected for broadcasting and comm unication to the public is a more important 
source of revenue than the exerci se of their exclusive rights, wh ich are often transferred to the 
producers. For example, 57% of monies collect ed by performers coll ecting societies stem 
from equitable remuneration for broadcasti ng and communication to  the public. A term 
extension to cover at least the life of a perf ormer would thus benefit individual performers 
primarily by extending their eligibility to rece ive a share of equitable remuneration payments. 
None of these issues had been fully c onsidered in the 2004 Staff Working Paper. 
 
EN 11   EN 3. I NTRODUCTION  
This impact assessment will cover the issue of performers' and record producers' rights under 
the Community acquis . Only performers whose performances are included in a sound 
recording are considered. Audio- visual performers and producers are not considered, as their 
economic and legal situation is significantly differe nt. This concerns their legal status as well 
as the assignment and transfers of their rights.  Film producers, in certain Member States, are 
considered as co-authors of a film6 while in others they are cons idered as proprietors of so-
called 'related' rights7. Moreover, contracts in the film in dustry differ from those in music, 
especially in respect of presumpti ons of rights transfer to the producer8.  
3.1. Who are performers? 
A performer is a person who perfor ms or executes a work such as a piece of music, an opera, 
a play or a film. "Actors, singers, musicians, dancers, and other persons who act, sing, deliver, 
declaim, play in, or otherwise perform literary or artistic works" are all performers9.  
The status and income of performers varies c onsiderably. A small number of performers such 
as "featured artists" (whose name appears on th e album credits) achieve fame and fortune or 
"superstardom". At the other end of the spectru m, most performers are less well-known and 
cannot earn a living from their creative activi ties. They include session musicians (whose 
names do not appear on the al bum credits) who are employed inter alia  to provide 
background music and performers who are aspi ring to a career as featured artists. 
It is difficult to provide a precise estimate of the number of performers in the EU. 
Membership in performers' collecting societies or  artists unions or the number of artists active 
in musical education only provide rough proxies . In 2004, the total number of members of 
performers' collecting societ ies amounted to nearly 40000010. 
3.2. Who are record producers? 
Record producers create sound recordings (i.e. the "fixation" of a performance)11 and ensure 
their subsequent promotion and marketing, di stribution to retail outlets and sale to 
consumers/end users. Record producers provide the financial investment necessary to produce 
and sell music records. They also invest in  discovering and developing performers both 
commercially and artistically. As it is estimated that only 1 in 8 CDs is profitable, the 
investments of record producers in the music industry are regarded as risky. 
The recording industry is dominated by a few la rge companies (often integrated into bigger 
media conglomerates), whic h are also known as "the majors ": Universal Music Group, Sony 
                                                 
6 For instance in the U.K., under section 9(2)(ab) of the 1988 Copyright Patent and Designs Act. 
7 E.g. in France, see Article L. 215-1 Intellectual Property Code. 
8 See, at international level, Article 14 bis Berne Convention, and at Community level, Article 2(5)-(7) of 
the Rental and Lending Directive. National laws cont ain more detailed provisions regarding transfer of 
rights and the status of film producers. 
9 See Article 3 of the Rome Convention for the protection of performers, producers of phonograms and 
broadcasting organisations). 
10 Based on AEPO-ARTIS data complemented by Commission's own research. 
11 See Article 3 (c) of the Rome Convention for the protection of performers, producers of phonograms 
and broadcasting organisations (the first interna tional convention which provided performers with 
exclusive rights). 
 
EN 12   EN BMG Music Entertainment, EMI group and the Warner Music Group, which control about 
80% of the recorded music sales12. The remainder of the market belongs to a myriad of small 
and medium-sized cultural entrepreneurs, th e so-called independent record companies or 
"indies "13. Some recent successful bands are signed up to independent labels (Franz Ferdinand 
with Domino Records founded in 1993 and Kaiser Chiefs with B-Unique founded in 2004)14. 
The independent record companies are more vulnerable financially than the music majors and have more difficulty accessing financing to  keep them afloat between successes. 
3.3. How are record producers and perfor mers protected under copyright law? 
At Community level, both perf ormers and record producers enjoy a similar set of so-called 
'related' rights in their records and recorded performances. These rights are referred to as 
related rights to distinguish them from authors' and composers' copyright that arises in respect 
of the 'works' they create. Performances and phonograms are not works.  
Record producers and performers are therefor e granted 'related' rights under Directives 
2006/115/EC and 2001/29/EC. These related rights were harmonised at European level by 
Directive 93/98/EEC (now codified by Direct ive 2006/116/EC) and last for 50 years from the 
date of the performance or from the publi cation of the sound reco rding. This length of 
protection represents the minimum internationa l standard as provided for in the TRIPS 
Agreement of 1994 and the WIPO Performances  and Phonograms Treaty from 1996. In this 
impact assessment the rights in performances a nd sound recordings will either be referred to 
as rights in performances (held by performing ar tists) or rights in sound recordings (held by 
the record producers) or colle ctively as 'related' rights. 
Related rights can either be exclusive rights or rights to receive equitable remuneration for the 
commercial use of performances and sound record ings. Performers' exclusive rights (such as 
the right of reproduction, distribution, rental and 'making available' online) are usually 
transferred to the producer of the sound recording. The latter lice nses the exclusive rights to 
end users, such as broadcasters, rental s hops or online music shop s. Rights to receive 
equitable remuneration are not transferred to producers but are exercised by performers 
themselves through their collec ting societies. Such claims for equitable remuneration are 
collected from broadcasters, a series of public  venues (bars, hotels, shopping arcades, etc.). 
Compensation for private copying is also admini stered by collecting societies and paid by a 
variety of ICT industries
15. 
4. P ROBLEM DEFINITION  
4.1. What is the problem? 
If the present term of protec tion were maintained for performers, some 7000 performers, in 
the UK alone, over the next ten years, would lose the single equitable remuneration they 
                                                 
12 IFPI –The recording industry in numbers 2007. 
13 According to IFPI there are around 1000 indepe ndents active in the European music market. 
14 Gowers Review 2006, page 57. 
15 It should be noted that exclusive rights are almost always governed by individual contracts between the 
performer and the producer of th e sound recording while remunera tion claims are administered by 
collecting societies. 
 
EN 13   EN receive for the broadcasting and communica tion to the public of their performances16. It is 
expected that a corresponding num ber would be affected in the other big Member States and a 
proportionally lower number would be aff ected in the smaller Member States.  
Expiry of related rights would not appear as urgent with resp ect to famous superstars, featured 
artists like Sir Cliff Richards or the Beatles. But an expiry of related rights would be a serious 
blow to the thousands of anonymous session musici ans, i.e., musicians hired for one recording 
only and not members of a group, who contributed to sound recordings in the late fifties and 
sixties. They will no longe r get single equitable remune ration for broadcasting and 
communication to the public, pr ivate copying levies and equitable remuneration for the 
transfer of the performers' rental right. They will find it more difficult to devote time to their artistic career, as they generally respond to small increase in revenues, such as provided by 
the income flows mentioned a bove, by devoting more time to their creative activities. They 
will also lose protection just when online re tailing promises a new source of revenue.  
Single equitable remuneration is important, esp ecially with respect to  early performances. 
Many performers or singers start their career in th eir early 20's, if not earlier. That means that 
the current 50 year protection ends when they will be in their 70's. Once protection has ended, 
performers no longer receive any income from these sound recordings. For session musicians 
and lesser known artists  that means that income from those sound recordings stops when 
performers are at the most vulnerabl e period of their lives (retirement). 
Record companies argue that their main probl em is a decrease in revenues following large 
scale piracy over the internet. They also point out that record producer s in the USA and other 
countries in the world enjoy a much longer term  of protection. This, they argue, will divert 
creative efforts away from Europe and toward  those markets that grant longer periods of 
protection and thus income. They  point to a tendency for record  producers to orient their 
productions to cater to the taste of those jurisdictions where most  revenue could be achieved.  
The underlying problems of performers and reco rd producers will be considered separately. 
4.2. What are the underlying drivers be hind these problems for performers 
4.2.1. The treatment of performers, in comparison with authors, is unfair 
The term of protection for performers is  much shorter than that for authors. 
Their moral rights, which entitle them to re strict objectionable alterations to their 
performances, are weaker than those of authors. 
Performers are essential contributors to the cu ltural industries. They are often the necessary 
intermediary between the author and the public. For instance, very few people can derive the 
same enjoyment from reading sheet music as from listening to a sound recording. The 
contribution of performers is socially accepted and recognised by the public, as the popularity and success of well known performers suggests. 
However, performers are concerned about the disp arities that exist in re lation to the length of 
protection they currently enjoy as compared to th at given to authors. Authors are protected for 
70 years after their death whereas performers  are only protected for 50 years from the 
                                                
 
16 UK House of Commons Committee for Culture, Media and Sport, May 2007, p. 78. 
 
EN 14   EN performance or when their perf ormance is published or communi cated to the public via a CD 
or DVD, or a radio or TV broadcast, for exampl e. Performers believe that their creative input 
is as important as that of the author of the work17. In view of the development and importance 
of music over the past few decades, performers f eel that the value of their contribution to the 
success of a piece of music is at least equal to , and sometimes even more identifiable, than 
that of the authors (i.e. the composer, the lyri cist, the photographer/art designer of the cover of 
the compact disc, the writer of the sleeve notes). It could seem unfair that "the graphic artist 
who designs the artwork on a CD cover is prot ected for longer than the singer or musician 
who performs on the recording"18. 
The following examples illustrate the different terms of protection between performers and 
authors: 
 
In addition, the moral rights  of performers are weaker than the moral rights of authors. At 
international level, th e moral rights of performers are not recognised unde r the 1961 Rome 
Convention for the Protection of Performe rs, Producers of Phonograms and Broadcasting 
Organisations, but are r ecognised under Art 5 of the 1996 WIPO Performances and 
Phonograms Treaty (WPPT)19. However, the level of protec tion under Article 5 WPPT is in 
some respects lower than that a fforded to authors under Article 6bis of the Berne Convention 
for the Protection of Literary and Artistic Work s. While authors are protected against "other 
derogatory action in relation to the said wo rk", performers can only object to "other 
modifications". The term "derogatory action" us ed in the Berne Convention allows authors to 
restrict objectionable uses  of their performance (for inst ance use in pornographic material20, 
use in advertising or in a polit ical context which is contrary to the performers' opinion or 
beliefs) which do not imply a "modification" of the work but simply its use in an 
objectionable context.  
This discrepancy between the moral rights of au thors and performers is also reflected in 
national laws. In addition, the dur ation of moral rights varies. In some countries, these last as 
long as economic rights, while in  others they are perpetual21. While in any case authors are 
                                                 
17 "I put as much creative effort in to my performances as I do into my compositions, so there does not 
appear to be any justification for this big discrepancy", letter from Udo Jürgens to Commissioner 
McCreevy, 12 July 2007. Mr. Jürgens is both an author and performer. 
18 Submission from the Irish Recorded Music Associ ation to Michael Ahern, Minister for Innovation 
Policy in Ireland, November 2007. 
19 Art 5 (1) of the WIPO Performers and Phonograms Treaty 1996 provides that : " Independently of a 
performer's economic rights, and even after the transfer of those rights, the performer shall, as regards 
his live aural performances or performances fixed in phonograms, have the right to claim to be 
identified as the performer of his pe rformances, except where omission is  dictated by the manner of the 
use of the performance, and to object to any distortion, mutilation or other modification of his 
performances that would be prejudicial to his reputation". The Treaty is in force in some, but not all, 
Member States, and has been signed but not yet ratified by the EC. 
20 Sam Ricketson, "The Berne Convention: 1886-1986", p. 469, 1987. 
21 For example the moral rights of performers are perp etual in France and Romani a, protected 50 years 
after death in Portugal and the Netherlands, life or 25  years after the performan ce if longer in Germany. 
 
EN 15   EN protected during their lifetime and beyond, this is  not the case for performers. In the UK for 
instance, their moral rights will  only be protected for 50 years fr om the first publication of the 
fixation of their performance22. They will thus be exposed to di stortions or mutilations of their 
performances during their lifetime at least in respect of their early performances. 
4.2.2. Performers create young and live longer: the performers' age gap 
Performers suffer from an "income gap" towards the end of their life 
Performers have no control of thei r performances after the 50 years. 
Protection for performers stands at 50 years fr om the event that trig gers protection (the 
performance or the publication or communica tion to the public of a recording of the 
performance). An increasing number of perfor ming artists are seeing their performances 
falling into the public doma in during their lifetimes23. PPL, the UK collecting society that 
represents performers has indicated24 that sound recordings from 1955 to 1965 will involve 
7000 performers who will stop re ceiving royalties or equ itable remuneration from 2005 
onwards as the sound recordings reach the 50 year protection cut off date. 
Current average life expectancy  stands at 75.1 years for men and 81.2 years for women,25 
although it is not unusual for persons to live well into their 80's and 90's. On average, most 
performing artists or singers start their career in their early 20's which means that the current 
50 year protection ends when they are in their 70's. For instance, the singer/songwriter Elton John signed his first contract aged 20
26. Once protection has ended, performers no longer have 
a say in how their performances are used nor do they receive any further remuneration from the commercial exploitation of their performan ces. In fact, income from those recordings 
stops when performers are at the mo st vulnerable period of their lives. 
4.2.3. Most performers do not earn a li ving from their artistic work 
Performers' earnings are on average low and distribution of income is highly uneven. 
Performers are under-employed and supplemen t their income with part time jobs 
The current employment status and conditions for the average performe r are not necessarily 
very rewarding. Apparently, only  famous performers make a liv ing from their profession. For 
instance, in the UK, in 2001, only 5% of performers earne d over £10000 annually. Moreover, 
between 77 and 89.5% of all income distributed to  performers goes to th e top 20% of earning 
                                                                                                                                                         
See "Study contract concerning moral rights in the context of the exploitation of works through digital 
technology", (April 2000), available at http://ec.europa.eu/internal_market/copyright/docs/studies/ 
etd1999b53000e28_en.pdf .  
22 Section 205I — (1) of the 1988 Copyright Designs and Patents Acts. 
23 The market for recorded music star ted in the 1950's and really blossomed in the 60's and 70's (and has 
increased ever since) so the number of musical works that will be falling into the public domain after 
the 50 year protection period will show a significant increase from 2010 onwards. 
24 In an interview on 31/3/2006 in premises of DG MARKT Copyright unit. 
25 Eurostat, Life expectancy at birth. 
26 See Elton John and Others v. Richard Leon James  [1991] FSR 397, High Court decision of 29th 
November 1985. Other examples include Irish performer Bono, from U2 (first record released when he 
was 17), French singer Johnny Halliday (first record released when he was 17), Greek singer George 
Michael (first record released  when he was 19), etc. 
 
EN 16   EN performers27. Economists have shown that the great di screpancies between the low earning of 
the majority of little-known performers and th e significant earnings of "superstar" performers 
are endemic to the music industry28. However, the lesser paid perf ormers are as essential as 
superstars, as the latter are invariably plucked from a large number of lesser-known 
performers. 
Moreover, the social situation of performers is not  very secure. It is difficult for performers to 
find sufficient employment and most need other jobs to supplement their incomes29. Overall, 
only 5% of performers actually make a living fr om their profession – a ll the others have to 
seek parallel employment. Often, performers qua lify as self employed. This limits the impact 
of collective bargaining through unions30. 
However, studies suggest that performers use in cremental increases in income to devote more 
time to their artistic careers31. This means that when performers receive additional income 
from a part time activity or from royalty  payments, they spend more time creating. 
4.2.4. Performers lose the financial benefits of  their exclusive rights when they transfer 
them 
Session artists transfer their exclusive rights ag ainst a lump sum payment, irrespective of the 
success of the work. 
The rights recognised to performers under the acquis  do not result in concrete benefits for 
performers. 
Performers usually transfer th eir most economically significant exclusive rights to record 
companies via contract. In most cases, indivi dual performers have little bargaining power32. 
Session musicians may be part of a union or  association and bene fit from collectively 
bargained minimum terms. Featured artists are generally willing to accept the contract they are offered because the reputation and exposure gained by signing with a record label gives 
them the possibility of reaching a broad audience . Consequently, it is di fficult for performers 
to negotiate which type of contract or whic h level of remuneration they will obtain. Session 
musicians cannot negotiate at all, they have to transfer  their rights 'in perpetuity' against a one 
off payment.  
Contractual relations between record compan ies and performing artists vary greatly but 
typically fall into three categories:
33 
                                                 
27 AEPO study – "Performers' Rights in European Legislation: Situation and Elements for Improvement.", 
July 2007, p. 89 
28 For a survey of economic "superstar theories",  see R. Towse, "Creativity, Incentive and Reward" 
(2000), pp. 99-108. 
29 FIM – EP Hearing 31.1.2006 and meeting in Commission offices on 16 March 2006. For example, 
Luciano Pavarotti and Sting were initially teachers and Elton John worked in the packaging department 
of a record company. 
30 "The Collective negotiation and its actors in the cultu re and media sector", Re search project conducted 
on behalf of the Social Affairs Directorate of the European Commission, March 2005. 
31 E.g. R. Towse, op.cit (for artists generally) . 
32 In several instances courts have intervened to  cast aside excessively harsh agreements, noting in 
particular the "immense inequality in bargai ning power, negotiation ability, understanding and 
representation" between artists and professi onals of the entertainment industries", Silvertone Records 
Limited v. Mountfield and Others , [1993] EMLR 152. 
33 Adapted from contribution from Naxos to Commission questionnaire – May 2006. 
 
EN 17   EN 
 
Table 1: Types of performers' contracts 
Session artists are generally pa id a flat fee as their right s are bought out by the producer. 
Accordingly, their remuneration does not increase  if the record becomes a huge success. For 
instance, the school of the children si nging in the choir in Pink Floyd's hit Another brick in the 
wall (part II)  in The Wall  (1979) album, which sold 30 million copies worldwide, was paid a 
flat fee34. The 2004 film Les Choristes  included the contributions of an amateur choir of 
children. Although the soundtrack achieved considerable commercial success35, the choir 
association was paid € 21000 for three days of work and subsequently obtained only 1% from 
sales. 
Featured artists' contracts usually provide for a royalty-based remuneration on terms which 
are not necessarily very favourable. For example, the highly successful British singer/songwriter Gilbert O'Sullivan was initially paid £10 a week, the equivalent of his previous wages as a postal cl erk, when retail sales of reco rds of his music between 1970 and 
1978 realised a gross figure of some £14.5 million
36. More generally, depending on their fame 
and bargaining power, performers usually r eceive net royalties of 5-15% of revenues37. 
The deduction of a variety of record producers'  costs from the royalty payments can also 
significantly undermine the remuneration of performers. These deductions are often 
formulated in technical terms and included in complex legal documents38. In practice, after 
the various contractual deductions (for costs borne by the producers such as music videos, 
promotion, master costs), the average percenta ge of royalties actually received by performers 
can be lower. Moreover, as most performers'  sound recordings do not  sell enough copies for 
                                                 
34 School children were "hired" an d the school received a lump sum payment of £1000, without any 
royalty payments. The children received no remuneratio n other than a concert ticket, a single and an 
album each. They were denied the right to participat e in the video of the album on the ground that they 
did not have card from "Equity", a UK union of performers. However, at that time performers enjoyed 
very limited protection in the UK. After the law was revised, an agent sought to relocate the choir 
performers and initiated legal pro ceedings to obtain pa yment. See The Times, November 27 2004, 
"Payout after Pink Floyd leaves them kids alone", available at http://www.timesonline.co.uk/tol/news/ 
uk/article395989.ece  and BBC News Magazine, 2 October 2007, "Just another brick in the Wall", 
available at http://news.bbc.co.uk/1/hi/magazine/7021797.stm  . 
35 According to the parents of some choir boys, the soundtrack generated €20 million. Some parents 
initiated legal proceedings against th e producer, as the children had r eceived no remuneration at all for 
their performance. 
36 See O'Sullivan v Management Agency and Music Ltd . [1985] Q.B. 428 at 444 before the Court of 
Appeal of England and Wales. See also Financial Times, 29/30 September 2007, Life & Arts, p. 3. 
37 CIPIL Study, p.36. 
38 This has led courts to conclude that artists such as the "Stone Roses" rock band or Elton John were 
insufficiently aware of th e sometimes excessive deductions oper ated from the basis for calculating 
royalties, see Silvertone Records Limited v. Mountfield and Others , [1993] EMLR 152. 
 
EN 18   EN the record company to recoup its initial investment (onl y 1 in 8 CDs is profitable)39, royalty 
payments are often not paid out at all. 
However, performers also receive revenue fr om other sources. In most cases, they do not 
assign certain exclusive rights to record producers, such as their right to authoris e use of their 
performance in advertising or films (so-ca lled 'synchronisation rights'). Moreover, they 
receive income from collecting societies which administer their secondary remuneration 
claims. There are three principal sources: equitable remuneration for broadcasting and 
communication to the public, pr ivate copying levies and equitable remuneration for the 
transfer of the performers' rental right. All of these sources are commonly referred to as 
'secondary' sources of income and performers receive them directly.  
4.3. What are the underlying drivers behi nd these problems for record producers? 
4.3.1. Loss of revenue for record producers 
Declining sales and profit s of record producers. 
Loss of revenue through piracy. 
The EU recorded music industry has indicated a slump in their activities: sales of music CDs 
peaked in 2000 and have been falling at an average rate of 6% ever since40. Estimates for the 
future show a continued decrease in phys ical album sales from $12.1bn in 2006 to $10.3bn by 
201041. Since 2001, the total European market for r ecorded music has lost 22% of its value42.  
Revenues in general and profits in particular ha ve decreased, largely due to increased piracy. 
In January 2006 the music trade publication ‘Bill board’ indicated that, worldwide, there were 
350 million legal downloads for the whole year of 2005, but that there were also 250 million 
illegal downloads per week . The music industry indicates that  approximately a third of all 
CDs bought in 2005 in the world were pirated – a total of 1.2 billion CDs. EMI's expenditure 
on anti-piracy and protection of IP  for 2006 was in excess of £10m. 
4.3.2. Loss of revenue entails a reduction in  Artist & Repertoire (A&R) spending 
Less profits means fewer new acts (n ew releases or re-releases). 
Less profit means fewer ar tists under contract. 
Less profits means less diversity, partic ularly in (smaller) niche markets. 
Due to losses in revenue, the worldwide music industry, during the last five years, has 
contracted by some 25%. For instance, Univer sal's total number of employees which in 2003 
amounted to 12000 was down to 7600 in 200643. After an initial reduction in employees in 
2006, EMI also announced a second reduction of 2000 j obs (about one third of its work force) 
in January 200844. EMI indicated in addition an intention to be more selective with its artist 
                                                 
39 Comment from IFPI. 
40 "Back to the Digital Future: The Role of Copyrights in Sustaining Creativity and Diversity in the Music 
Industry", page 3, April 2006, Professor Joseph Lampel, Cass Business School, London. 
41 Figures from PricewaterhouseCoopers, Financial Times, 6 July 2006. 
42 Article from the Times, 14 February 2007. 
43 Interview with IFPI - and John Kennedy - on 29/3/2006 in Copyright Unit of DG MARKT. 
44 International Herald Tribune, The Associated Press, January 14, 2008 
 
EN 19   EN partnerships despite a significant reducti on in its artist roster already in 200645. EMI has also 
been reducing its advertising expenditure46. 
Record companies claim the creative cycle w ill become unsustainable under the current 
financial constraints. Accordin g to record producer s, the music industry is a risky business 
and finding and developing talented artists (A&R) is expensive47. They claim long term 
earnings are required to disc over and market new talent48. Record companies point out that 
their A&R spending, which can be up to 20% of  their turnover, is comparable to R&D 
expenditure in other sectors. Th e comparison reveals that they i nvest substantially more than 
the automobile and parts industrial sector (4.2% of turnover) or than the software and 
computer services sect or (10.4% of turnover)49. In popular music, it is  estimated that only 
about 10% to 12% of all recordings reach break-even or become profitable50. It has been 
suggested that profitability is ach ieved only once sales exceed 20000 CDs51. With online 
piracy, this target is increas ingly difficult to achieve.  
The recording industry has indicated that if th eir revenues are lower they will spend less on 
A&R52 and discovering and promoting new talent. If these trends persist, there will be a real 
risk that European based talent will not be deve loped nor benefit from th e possibility of global 
exposure offered through  on-line exploitation. 
The digitisation of record pr oducers' back catalogue will al so be hampered by declining 
revenues. Digitisation is an ongoing process wh ich is costly but necessary to ensure the 
availability of local repertoire and cater for the needs of niche markets. 
4.3.3. Cultural diversity 
The term gap could lead to record compan ies producing sound recordings to cater to 
American taste in music. 
In the US, the record companies point out that the longer term of protection (95 years) gives 
incentives for companies to invest in repertoire th at will appeal to US markets, and thus yield 
higher returns. The economic be nefits of the longer terms of  protection in the US should 
nevertheless take into account th e fact that the protection of r ecord producers and performers 
suffers more exceptions in the US53. This would offset some of th e benefits of the longer term 
of protection in the US. However, the US is  considering the adoption of the performance 
                                                 
45 EMI response to Gowers Review, 2006. EMI's workforce was reduced by a third to 6,000 persons. 
46 Advertising expenditure by music industry dropped by 25% in 2002 and 7% in 2003. The four music 
majors are in the top 100 spenders on advertising and 2 of them are in the top 20. ("Evolution of the 
recorded music industry value ch ain", anonymous report) p. 13.  
47 Input from responses to public consultation carried out on the Commission Staff Working Paper on the 
review of the EC legal framework in the field of copyright and related rights, SEC(2004) 995 of 
19.7.2004. 
48 "The Recording Industry in numbers", IFPI, June 2007, p. 17; EMI says it invests over 20% of revenues 
on musicians and music in more than  50 countries" – 2006 Annual Report. 
49 DTI figures – "The Top 800 UK and 1250 Global Companies business R & D investment", 2006. 
50 Comment from Naxos on 10% and IFPI for the 12% 
51 Study entitled ‘The Recasting of Copyright and related rights for the Knowledge Economy’, October 
2006, Institute for Information law, University of Amsterdam, page 112. 
52 International Herald Tribune, The Associated Press, January 14, 2008 and EMI contribution to Gowers 
Review 2006. 
53 Under US Copyright law, broadcasters as well as a number of public venues are exempted from 
payments to rightholders, see Gowers Review of Intellectual Property, p. 49. 
 
EN 20   EN rights bill54, which would significantly in crease the scope of protecti on in the US and increase 
the appeal of the US market. Overall, record companies argue, the level of protection in the 
US will divert creative efforts away from Eu ropean repertoire and performers and towards 
those markets that grant longer periods of pr otection and thus income. They point to a 
tendency for record producers to orient their productions to cater to the taste of those 
jurisdictions where most reve nue could be achieved. Some economists point out that, over 
time, this could lead to fewer incentives to  produce sound recordings that appeal to the 
European market55 and, in turn, to a decline in Europ ean repertoires and cultural diversity. 
However, it is difficult to assess the precise exte nt of this problem as other parameters than 
the term of protection may affect the investments of the record industry.  
4.4. How would the problem evolve, all things being equal? 
The impacts of 'doing nothing' are analysed in de tail in section 7.1 below.  Suffice it to say at 
this stage that, if nothing were done, this w ould have individual impacts on the roughly 24500 
performers who will see their term of protection expire over the course of the next decade (24500 is 3.5 times the number of UK performe rs that, over the next decade, will lose 
protection. This multiplier was chosen because  European sales acc ount for roughly 3.5 times 
of UK sales). These performers will lose reve nue from royalties and, more importantly, from 
equitable remuneration for broad casting and communicatio n to the public. They will also lose 
their entitlement to compensation for private copying.  
On the other hand, there will be few, if any, positive impacts if nothing was done, as retail 
prices for consumes and equitable remuneration payments for commercial users are unlikely to be affected by the term of protection of  sound recordings and performances. The only 
beneficiary of the 'do nothing' scenario would be 'public domain' record companies who could 
progressively re-issue sound recordings from  the period between 1957 and 1967 without 
paying royalties to performers. As there is little  evidence that records in which the rights of 
performers and producers have expired are cheape r than those still protected, the 'do nothing' 
option would lead to a shift in economic in come from performers to "public domain" 
companies. 
4.5. Does the EU have the right to act? 
4.5.1. Treaty base The Term Directive was adopted on the basi s of the Articles 47(2), 55 and 95 TEC. Any 
amendment to this Directive should be based on the same legal basis because the subject 
matter covers the free circulation of services and the good functioning of  the Internal Market. 
If alternative measures  not involving modification of the Directive were chosen to be the 
optimal remedy to the problems identified in this IA, further consideration has to be given to 
the identification of the most appropriate instrument and lega l base. Operational action may 
have to be taken at the level of Member States. 
                                                
 
54 Performance Rights Act. Bill H.R. 4789, introduced on Decembe r 18, 2007, in the House of 
Representatives: “To provide parity in radio perfor mance rights under title 17, United States Code, and 
for other purposes.”  
55 Liebowitz (February 2006), "What are the Consequences of the EU extending Copyright Length for 
Sound Recordings, report prepared for IFPI., p. 22.  
 
EN 21   EN 4.5.2. Subsidiarity test 
The length of protectio n of copyright and rela ted rights has already been harmonised at EU 
level and falls under the exclusive competence of the Community. However, the harmonisation achieved in Directive 93/98/EEC was not complete in that, as provided for in 
its Article 10(1), certain Member States were  allowed to keep longer terms of protection 
already in place before 1 July 1995, as is the case in Greece
56. Options involving a term 
extension (2a "life or 50 years"  and 2b "95 years for performers  and record producers") would 
involve modifications to Directive 93/98/EEC and thus could only be achieved at Community 
level.  
4.6. Summary of problems 
Performers are treated unfairly, in  financial, legal and social terms:  most performers are in a 
precarious financial and social s ituation. In addition, from a legal perspective, the importance 
of their contribution to musical  creation is not appropriatel y recognised. They are granted 
lesser moral and economic rights than authors. 
The record industry faces si gnificant challenges which unde rmine its competitiveness : online 
piracy has lead to signi ficant losses. The ability of the mu sic industry to finance new talent 
and adapt to dematerialised distribution is severely undermined. In addition, the longer term of protection in the US risks undermini ng the production of European music.  
Consumers may not have access to the widest choice of music  available at reasonable prices . 
The opportunities offered by online digital dist ribution, allowing the dissemination of local 
repertoire and catering for niche markets, may not be fully seized by the music industry under 
the current conditions. 
5. O
BJECTIVES  
The following graph presents an overview of  the general policy objectives, the specific 
objectives and the operational objectives. 
                                                 
56 Article 52 of Law 2121/1993 provides for 'life or 50  years whichever is the longer' for performers. This 
applies to the last surviving performer of any set of performs who are members of the same group. 
 
EN 22   EN 
 
Figure 1: Overview of objectives 
5.1. General objectives 
Promoting music production in Europe: The protection of performe rs and record producers 
should ensure a sustainable level of creation. Th e European music industr y should also play a 
leading role in promoting Eu ropean music in the world.  
5.2. Specific objectives 
Contribute to enhancing the welfare of  performers in the music industry : Performers should 
feel that they are receiving a ju st reward for their effort and creativity throughout their lives.  
Contribute to enhancing the competitiven ess of the European music industry: The music 
industry should remain competitive57. It should be equipped to face the challenges of piracy 
and the opportunities of dematerialised dist ribution. It should not be at a competitive 
disadvantage, in order to preserve the place of European music.  
Increase available music repertoire:  the public should have access to a large and diverse 
choice of music.  
5.3. Operational objectives 
Gradually align authors' and performers' protection: The legal protection of performers 
should reflect the importance of their contribution to cultural diversity. They should not be 
                                                 
57 Competitiveness is a comparative concept of the ability and performance of a firm, sub-sector or 
country to sell and supply goods and/or services in a given market. In this case, competitiveness is used 
to refer in a broader sense to the economic competitiveness of the region (the EU) on global markets. 
 
EN 23   EN treated as second tier contributors to cultural diversity, in particular in comparison with 
authors. 
Incremental increase in the remuneration of performers: Ensure that performers receive an 
increase in revenues from as ma ny different sources as possible to alleviate their difficult 
financial situation, especially at  the end of their lives. Revenues  accruing to performers and in 
particular less well-known performers, who are mostly self-employed, will ensure they can 
devote more time to creation and possibly make  a living from their artistic activities. 
Diminish the discrepancies in protection between the EU and US  music markets: The legal 
protection afforded to record producers should encourage investment and production of music 
for the European market. 
Incremental increase in A&R resources: Revenue streams derived fr om current repertoire 
should be sufficient to finance a healthy A&R sector in the re cording industry.  
Ensure availability of music at reasonable prices: a balanced protection should both 
encourage the creation of music and ensure that as wide a public as possible can access it.  
Encourage the digitisation of back catalogue: the widest possible choice  should be offered to 
consumers, including niche and local repertoire. 
6. P OLICY OPTIONS  
Some of the options considered would be complementary to options involving a term 
extension. Apart from options 2a and 2b, other combinations of options are not mutually 
exclusive. 
Table 2: Overview of Options 
6.1. The wait and see option 
The first option  is to leave the copyright acquis  as it is.  
6.2. Options related to an extens ion of the term of protection 
The second option  is to extend the term of protection. There are va rious possibilities (sub-
options) for such an extension, all of whic h would require an am endment to the Term 
Directive, in particular to Article 3. There coul d be three options in the application in time of 
a term extension: it could apply only to new reco rdings, be 'partially' re troactive (applying to 
all recordings which are currently sill protect ed) or be fully retroactive (applying to all 
recordings, including those in which the rights of performers and producers have expired). 
 
EN 24   EN Out of these three options, which are analysed in the Annex (section 2), the preferable option 
is to extend the term with 'partial' retroactiv e effect. This means that  only recordings which 
are still protected at a certain date, such as the implementation date of the Directive, will 
benefit from the term extension. It is the s implest option to apply and brings immediate 
benefit to many right holders. It is also in li ne with previous practice, such as Directive 
2006/115 (rental and lending Directive) and Dir ective 2001/29 (copyright in the information 
society).  
6.2.1. Amend the term of protection for pe rformers only to "life or 50 years" 
Sub-option 2a  amends the term of protection for performers only  to "life or 50 years", 
whichever is the longer. This option ensures that the performer enjoys protection during 
his/her entire life. It would a pply to the performers' exclusiv e rights and to the variety of 
'secondary' remuneration or compensation cl aims that a performer enjoys under the acquis  
(see section 3.3 above).  
6.2.2. Extend the term of protec tion for performers and reco rd producers from 50 to 95 
years 
Under sub-option 2b  the term of protection is extended from 50 to 95 years for performers 
and record companies.58 This option ensures equivalence wi th the term of protection in the 
US.  
6.3. Complementary options not involving an ex tension of the term of protection but 
which improve the situation of performers 
The third option  comprises various possibilities which could improve the financial situation 
and moral rights of performers without necessari ly extending the term of protection. These 
measures could be used either as alternatives to a term extension or as complementary measures to an extension of the term of protection for performers. 
6.3.1. Create an 'unwaivable right to equitabl e remuneration' for performers who transfer 
their rights to record companies 
This impact assessment previously describes how performers contract ually transfer their 
exclusive rights (including thei r reproduction, distribution and ma king available rights) to 
record labels. As a result, performers are of ten deprived of a fair  share of the revenues 
generated from the exploitation of their performa nces. To address this issue in relation to the 
rental right, Article 4 of Di rective 2006/115 provides for an unwaivable right to 
remuneration  to which authors and performers remain  entitled even after having transferred 
their rental right to a producer. In view of the fact that perf ormers do not enjoy any share in 
the money collected by record producers for sales of music on the in ternet, one option to 
improve the social situation of performing artis ts would thus be an amendment to extend the 
scope of Article 4 of the Rent al and Lending Directive to also  cover the situation when the 
making available right is transferred. The remu neration right would have to be administered 
by a collecting society. 
                                                
 
58 Concretely, one would have to substitute the number ' 50' by '95' in the respective paragraphs in Article 
3 of Directive 2006/116/EC. 
 
EN 25   EN The impact assessment identifies three possible approaches in respect to the issue of who 
should pay the equitable remuneration to perfo rmers. It could be paid by a number of 
stakeholders: (1) equitable remuneration could be paid by users and distributors.  Such 
payment will be likely to oc cur through a collecting society, because performers are not 
contractually linked to distribu tors; (2) equitable remunerati on could be paid by record 
producers and (3) it could be left  to interested parties to d ecide who pays the equitable 
remuneration to performers. 
For example, Article 108 of the Spanish IP C ode stipulates that, where a performer has 
transferred his exclusive 'making available' righ t, he retains an unwaivable claim to equitable 
remuneration. The remuneration has to be pa id by whoever makes the fixation of his 
performance available, usually  online music providers, and the claim is exercised against 
them by collecting societies. Since this pr ovision was only introduced in July 2006, collecting 
societies have not yet collected any monies under the new provisions. It is thus too early to 
say whether this scheme of collectively admini stered performers' remuneration will work in 
practice.  
It is, at this stage, also ha rd to quantify the financial be nefit that would arise from a 
remuneration claim for the making available of  performances online. A study conducted by 
the French collecting society ADAMI suggests that a performer receives between € 0.03 and 
0.04 for a download sold at € 0.9959, and that online music yielded € 120 million in revenues 
in the EU in 200460. This implies that the new claim would yield roughly between € 3.6 
million and 4.8 million per year. This compares to approximately €351 million collected in 
2005 by performers' collecting societies' from single equitable remuneration, private copying 
levies and the rental right61. Given the fast pace of change in the online music market, which 
is far from mature, it is also difficult to pr edict how such figures would evolve in time. 
Moreover, the uncertainties su rrounding the issue of who should pay this 'equitable 
remuneration' also contribute to  the difficulties in quantifyi ng its impact. Should equitable 
remuneration be paid by the reco rd producers, the latt er would likely shift the overall payment 
burden to performers by reducing royalty payments  and the buy-out fees to session musicians. 
On the other hand, if payment of equitable remuneration were made incumbent on online 
retailers or operators of similar online services, such a measure might well complicate the administration of online rights. Indeed, online reta ilers, in order to offer legitimate services, 
would now have to clear another right with a collecting society representing performers. 
Finally, if it were left open to interested parties to deci de who should pay the claim for 
'equitable remuneration', as is the case under Belgian law, the entire option might well become moot. 
In light of the uncertainties su rrounding the practical administra tion of the claim for equitable 
remuneration, this option appears untimely, as fu rther study would be required to assess its 
impact. While in the future this option might  well be introduced to  enhance performers 
participation in revenue generated online, it cannot be considered at this stage.  
                                                
 
59 ADAMI study, 'Filière de la musique enregistrée : quels sont les véritables revenus des artistes 
interprètes?' (April 2006), p.27. 
60 Study for the European Commission, 'Interactive content and convergence' (2007), p. 42 (source: 
Screen Digest). 
61 KEA Study, 'The collective management of rights in Europe' (2006), p. 33. 
 
EN 26   EN 6.3.2. Moral rights of performers 
Several Member States recognise the moral rights  of performers but to a lesser extent than 
they recognise the rights of authors. The mora l rights of performers could be strengthened. 
The scope of their moral rights could be harmonis ed to include a right to  restrict derogatory 
uses of their performances. However, sin ce moral rights have no t been harmonised at 
Community level, it would be preferable that  Member States strengthen the protection of 
moral rights under their national laws.  
6.3.3. A "use it or lose it" provision for performers' rights 
A safety net protecting performers  against practices which depriv e them of the benefits of a 
term extension could be promoted. This  could take the form of a so-called "use it or lose it"  
provision. 'Use it or lose it' provisions are curren tly in force in some EU Member States for 
authors' rights62 and in some cases for performers63. We have learnt from our discussions with 
stakeholders that some independent record compan ies transfer rights back to the performer if 
they are not selling his record any more64. 
The effect of a use it or lose it provision woul d be to allow the performer to move to another 
record company or exploit a recording himsel f if the producer does not exploit it. This 
provision would also apply should the record company decide to only use certain channels of 
distribution (like sales of CDs) but not others (l ike online sales). In order for a use it or lose it 
clause to achieve this result, however, it must also be clear that the producer cannot use his 
exclusive right in the recordi ng to oppose the new exploitation or ask for remuneration which 
would render the exploitation of the pe rformance not viable economically.  
"Use it or lose it" provisions could be made mandatory, in orde r to ensure that all performers 
benefit from them. However, as they must ar ticulate with existing national copyright and 
contract legislation of the Me mber States, sufficient flexibili ty should be allowed for the 
transposition of such a provision. 
6.3.4. Create a fund for session musicians 
In order to ensure that the benefit of term extension woul d accrue to performing artists, 
especially session musicians that have transf erred their related ri ght against a one off 
payment, the extension of protection for record companies should be accompanied by a payment of 20% of the increased revenues the record companies will enjoy into a fund , set up 
in each record company, dedicated to improving the situation of performers, including session musicians whose performances are used in recordings. The basis for calculating this 
percentage would comprise produ cers' revenue (and not profit) from: (1) the sale of sound 
recordings and (2) online di stribution of sound recordings
65.  
                                                 
62 Austria, Belgium, Germany, Luxemburg, Nordic Countries, Portugal and Spain. 
63 Denmark (articles and of the Danish Copyright Act) and Germany (articles 41 and 79(2) of the German 
Copyright Act). 
64 Comment from the Chairman of IMPALA (the i ndependent music label association) on 5 December 
2007. 
65 In order to have the financial volume necessary to ensure real benefits for session musicians, this IA 
proposes that the fund should reserve at least  20%  of the annual revenue that accrues during the 
extended term. This fund  should be administered by each reco rd company in close cooperation with 
performers and their representatives . Such an obligation would be in line with an earlier commitment by 
 
EN 27   EN 7. A NALYSIS OF IMPACTS  
This section looks at the economic and social  impacts resulting from the options presented 
above. For purposes of better pres entation such impacts are pres ented according to the group 
of stakeholders that is affect ed by the option in qu estion. Environmental impacts are neglected 
since they are marginal. If there is no obvious im pact on one group of mark et players, they are 
not necessarily mentioned in the impact analysis. 
7.1. Doing nothing 
7.1.1. Impact on performers Over the next 10 years performers and reco rds producers will lose their neighbouring rights 
over an increasing amount of r ecorded music (those recorded  and released between 1957 and 
1967). It is estimated that around 7000 performers , in the UK alone, will lose all of their 
airplay and reproduction-related payments (e .g., the 'single equitable remuneration' for 
broadcasting and any communication to the pub lic and compensation for private copying) 
over the next ten years
66. This concerns the thousands of  anonymous session musicians who 
contributed to recordings in the late fifties and sixties. Their income will stop when they are at 
the most vulnerable period of their lives, i. e., as they are approaching retirement. 
For those individual performers affected by the expiry of thei r term, this would entail an 
annual loss of between € 181 and € 3663 in e quitable remuneration payments that they 
currently receive67. 
Moreover, in view of the curren t and suggested future steady in crease in digital sales many 
older sound recordings get a second life in the digital format. Performe rs whose performances 
fall into the public domain will lose out on immediate and future revenues from the digital exploitation of recordings. Fu rthermore, income from primar y exploitation, such as sound 
recording sales may stop. Only the big name s will enjoy financ ial security and good 
bargaining power with record companies.  
The number of performers able to sustain a long term livelihood from their performances 
would perhaps decrease, and performers would not  be able to devote as much time to their 
artistic career. Over time, the problem will worsen as the rights of performers and record producer will expire in an in creasing numbers of recordings . Finally, in several Member 
States performers would also not be in a pos ition to restrict objectio nable uses of their 
performances. 
                                                                                                                                                        
 
the sound recording industry and the musicians' union FIM. In a joint letter of 5 June 2007 addressed to 
Commissioner McCreevy, IFPI, on behalf of the international sound recording industry and FIM, on behalf of musicians unions from several countries, stated as follows: "FIM and IFPI are working 
together to find ways to ensure that all performers  benefit financially from any extension of term of 
protection and that their older recordings can be made available to the public". The Commission might undertake to monitor how this fund develops and how many session musicians benefit from it.  
66 UK House of Commons Committee for Culture, Media and Sport, May 2007. 
67 According to the AEPO study ('Performers' Rights in European Legislation: Situation and Elements for Improvements', July 2007), collecting societies in the EU, in 2005, collected € 351 million and 
distributed this sum to around 400000 performers. This revenue is not evenly distributed. 77-90% of the 
revenue is distributed to 20% of the performers. On average € 293 million is distributed to 80000 performers, whereas € 58 million is distributed to 320000 performers. The average annual income per 
performer that is attributable to secondary remune ration claims therefore ranges between € 181 and € 
3663 per year.  
 
EN 28   EN 7.1.2. Impact on record producers 
Record companies will continue to suffer from piracy and spend a lot of money on anti-piracy 
law suits. The financial situation of record producers would not improve. While popular recordings from the 50's and 60's are still in demand and the record company that holds the 
master copy would still derive revenue from thei r exploitation, this revenue stream might now 
be subject to competition from re-releases by public domain companies. Indeed, an increasing 
number of popular performances (from the golden 1950s and 1960s) will fall into the public 
domain and the revenue from these recordin gs will no longer be available to fund the 
production and marketing of new recordings (see below).  
Record producers would still receive remunerati on for 'secondary' forms of exploitation, in 
particular their share of the 'single eq uitable remuneration' for broadcasting and 
communication to the public of music. These re venues would not be significantly affected by 
some records falling out of protection. Accordi ng to KEA, they amounted to € 293 million in 
2004
68. 
7.1.3. Impact on broadcasters and public venues where music is played 
While the rights of performers a nd record producers w ill expire in certain recordings, this 
would not affect the fees paid by broadcasters  and public venues for using music. Such fees 
are not calculated on a 'per track' basis and th e amount of recordings which are no longer 
protected by related rights is thus no t relevant to establishing the fee. 
Broadcasters (TV and Radio) pa y the 'equitable remuneration' due  to performers and record 
producers via a variety of pa yments, all of which are not  linked to the number of 
performances and sound recordings protecte d by copyright. For inst ance, commercial TV 
broadcasters pay a percentage of their total revenue (France), net broadcasting revenue (UK), 
or advertising (Germany). In Germany, an ad ditional graduation is made according to the 
percentage of music that is contained in the br oadcast. Cable re-transmitters, for example, in 
Germany, pay on the basis of their subscription  income. In addition, equitable remuneration 
by broadcasters represents a relatively small share of their revenues. According to IFPI 
estimates, only 1% of broadcaster's total re venue is paid to rightholders in 'equitable 
remuneration'.  
Equally, public venues where music is played – bars, hairdressers, fitnes s studios or doctors – 
do not pay on a 'per track' basis. These establ ishments pay according to seating capacity (UK, 
hairdressers), square meters (Germany, bars , hotels, hairdressers, UK, public houses, pubs, 
restaurants), revenue (France, discothèques), on the basis of th e number of instructors (UK, 
gyms). In Germany and France, the revenue for related rights is sometimes calculated as a percentage of the revenue charged for authors.  Again, those payments are not influenced by 
the number of performances or sound recordings that are in copyright.  
7.1.4. Impact on public domain record labels 
By doing nothing, public domain record companies would continue to pr ofit from a larger 
share of sound recordings, from late fifties and sixties, which would no longer be  protected by 
the rights of performers and record producers. 
                                                
 
68 KEA, 'The Collective Management of Rights in Europe: The Quest for Efficiency' (July 2006). 
 
EN 29   EN 7.1.5. Impact on consumers 
There is no clear empirical evidence that pri ce difference between sound recordings that are 
in- or out-of copyright would be significant. Th is would imply that public domain companies 
would not necessarily sell sound re cordings at prices lower than  those applied to protected 
recordings marketed by recording companies. Thus if the term of protection were not 
extended the economic rent would be shifted away  from the artists and record producers to the 
public domain labels. While this may be good for public domain record labels it is not 
beneficial to cultural diversity, because the reve nue would not be redistributed to performers 
nor used for A&R. 
7.1.6. Impact on cultural diversity 
By doing nothing there may be a risk that a perc entage of recordings phonograms in regard of 
which the performer and the phonogram producer are no longer protected disappear due to a 
lack of stewardship by the original record co mpany. Once out of protection, and thus of lesser 
value, there will be no incentive to 'look after'  master copies of old recordings and public 
domain companies will only reissue the bette r known and potentially profitable repertoire. 
Cultural diversity might therefore suffer. 
7.1.7. Impact on informati on society services 
The impact on digital libraries a nd other services which organise collections of digital content 
made available to the public would be neutral. While digital libraries would have to clear the 
rights of producers and performers in phonograms for an additional period, it should not be 
forgotten that, even after e xpiry of all neighbouring rights in a phonogram, the rights of the 
author of the musical compositions performed and recorded must still be cleared during the entire life of the author plus seventy years thereafter. Information so ciety services would, 
even in the absence of term extension, be ob liged to clear a variety of authors' rights.  
7.1.8. The international dimension 
The gap in length of protection as compared to the US would not be closed. Records produced 
or recorded in the EU are pr otected in the US for 95 years
69. Investors would be more inclined 
to support creators who produc e sound recordings destined for the USA as a recording 
popular in the US market would bring them bett er revenue streams for a longer period than a 
recording popular in the EU. 
7.2. Extend the term of protection fo r performers to "life or 50" 
7.2.1. Impact on performers 
A term extension to life or 50 years whicheve r is longer, will benefit all performers. The 
financial benefits to performers will be  positive (see further, section 7.3.1.)  
Extending the term of protection would also lead to more fairness in the remuneration of all 
performers : also It would lead to in creased revenues for performers whose performances 
experience popularity late after th e initial release of the recor d. For example, the song 'Build 
me up Buttercup', performed by 'The Foundations' and released in 1968, was used in the film 
                                                 
69 See 17 U.S.C. 104. The US does not apply a 'comparison of terms' with the term of protection in the EU 
and thus grants the full 95 years term of protection to EU phonograms. 
 
EN 30   EN 'There's Something About Mary' (1998). The sudde n renewed interest in  this tracks brought 
significantly increased earnings to the perfor mers. An extended term would ensure that 
performers or their heirs do not see commercia lly successful exploitations free-riding their 
performance and are not unfairly deprived of  their share of the revenues. In addition, 
performer's 'life' in the term of protection would also mark a convergence between the legal 
protection of performers and authors . This is because linking a term to the life of the creator 
is indirectly an acknowledgement of the pe rsonal nature of the creator's contribution. 
Academics indeed point out th at linking the term of protect ion to the life of creators 
acknowledges to some degree the personal nature of their creativ e contribution and this is one 
reason why the term of protection of an author is linked to the individual author's life. As 
Mick Hucknall states: "Modern music, especially  popular music, with its  roots in the oral 
traditions of the blues, country and folk music,  lays far greater emphasis on the characteristics 
of performers and performances, than on the nuances of composition or musical structure. 
Given the huge increase over the past 50 years or  so in the importance of sound recordings to 
consumers, the law should strive to catch up and grant performers equivalent protection to 
composers"70. 
In those Member States that recognise some moral rights of performers only for the duration 
of the economic rights, performers would also  be protected during their entire lifetime. 
However, in Member States which do not recognise  the moral right of pe rformers to restrict 
objectionable uses  of their performances, performers would remain powerless to prevent such 
uses. 
7.2.2. Impact on record producers 
For record companies, the  term extension  for performers would bring a smaller financial 
impact than an extension to 95 years (sub- option 2b). Even though producers' rights would 
not be affected by this option, producers woul d benefit from additional sales revenue when 
they have been assigned of the performers' ex clusive rights of reproduction, distribution and 
'making available' online. 
7.2.3. Impact on broadcasters and public venues where music is played 
There is no evidence that TV broadcasters or  venues that perform s ound recording in public 
(bars, discotheques, hairdressers or doctors) w ould have to pay more for the blanket licenses 
covering the 'secondary' uses they make of a performance incorporated in a sound recording71. 
The Gowers report argues that, once protection in a sound recording en ds: "No royalties are 
due for that recording and fewer licences are requ ired to play those s ongs. … Because the cost 
of licences reflects the royalties payable to the copyrights, as those copyrights expire, so the 
cost of licences will fall"72. This implies that broadcasters or the operators of venues where a 
public performance occurs pay royalties for soun d recordings on a 'per-track' basis. However, 
this is not the case, as ex plained above (see section 7.1.3). 
                                                 
70 Mick Hucknall, Simply Red (UK), Speech to AIM Annual Assembly, June 2004.  
71 For example, the BBC alone uses around 180,000 music items per week and spends over £230 million a 
year on the acquisition of IP rights from programme contributors (actors, writers, musicians and 
presenters) in BBC-produced programmes. 
72 Gowers Review on Intellectual Property, December 2006, p. 56. 
 
EN 31   EN 7.2.4. Impact on public domain labels 
An extension covering life of the performer or 50 years, whichever is longer, will imply that 
those record companies that republish so-called "public domain" music un der their own labels 
will have to wait longer for recordings to fall out of copyright. However, the term extension 
would only marginally affect the availability  of sound recordings phonograms in regard of 
which the performer and the phonogram producer are no longer protected, because it is not 
fully retroactive, and thus the recordings whic h are currently free of any related rights would 
remain so. Moreover, performances which have fallen into the public domain are not always 
freely available for public domain labels to use. This is because several Member States allow 
performers to use their moral ri ghts to restrict certain uses of  performances even after the 
performance has fallen into the public domain. Pe rformers can for example restrict the re-
release of public domain records which have not been re-mastered, object to the inclusion of 
their performance in new compilati ons or even to a sales environment which is detrimental to 
their reputation. For instan ce, the French performer Henri Salv ador was allowed to object to a 
public domain label issuing a cheap and low qua lity compilation of his early performances73. 
The impact of the term extension would also be limited as there are very few labels that 
specialise exclusively in distri buting copies of records which are in the public domain. Music 
is truly in the public domain once both (a) th e copyright in the musical composition and (b) 
the neighbouring rights of perf ormers and record producers have  expired. There are very few 
labels distributing such music, and they tend to  be very small, release a limited number of 
recordings and employ very few people - in fact, they are usually a one-man operation74. 
However, other so-called public domain labels tend to focus on releasing new recordings of 
compositions which are in the public domain (essentially classical music). This is for example the case of Naxos, a leading public domain label
75. For Naxos, reissuing public domain music 
is only a marginal part of its activities, and in this sense, the co mpany acknowledges it would 
benefit from an extension of the term of protection76.  
Any negative effect on public domain labels wo uld also have limited, if any, knock-on effect 
on performers. Indeed public domain companie s have no A&R costs and they do no discover 
and develop new talent. 
7.2.5. Impact on consumers 
As broadcasters and other venues that owe e quitable remuneration for broadcasting and any 
communication to the public do not pay on a 'per tr ack' basis, the impact of a life or 50 year 
term is neutral on these operators and thus on consumer prices (e.g., licence fees to public 
                                                 
73 In a judgment delivered on Thursday 15 November 2007, the Paris Court of Appeal ruled in favour of 
Henri Salvador by holding that a song, even if recorded more than 50 years ago and thus in the public 
domain, cannot be used without restrictions. The Court of Appeal condemned the company for having 
violated Henri Salvador's moral rights in his works and performances by publishing a compilation of his songs without his prior authorisation and awarded € 85000 of damages to the artist (including € 35000 
for the moral rights as a performer and € 30000 for the moral rights as an author). Paris Court of 
Appeal, November 14
th, 2007, SARL Jacky boy Music v Salvador , JurisData : 2007-349990.  
74 Sepia Records has a catalogue of 80 titles from the 1930s to the 1950s and has one employee; Flare 
Records has a catalogue of 45 titles and has one employee; Windyridge has a catalogue of 76 titles. 
75 For example, in 2005, Naxos released 194 new recordings of currently unavailable works that had fallen 
into the public domain. 
76 As acknowledged by Naxos in its response to the Commission questionnaire on the term of protection 
for sound recordings, point 61. 
 
EN 32   EN broadcasters). In addition, a life or 50 year te rm for performers only would have no impact on 
retail prices as the performers' share on a retail sale is very low. 
7.2.6. Impact on cultural diversity 
Term extension for performers only will also lead to some financial benefit for record 
producers. This might result in a limited incr ease in A&R investments, the development and 
the promotion of new artists. Without a significa nt improvement of the financial situation of 
the recording industry there might be less opp ortunities for promoting performers in both 
popular and niche repertoire. 
7.2.7. Impact on informati on society services 
The impact on digital libraries and other simila r services would be negative. However, it is 
difficult to identify such services and to quantify to what effect they would be affected, given 
that have yet to fully develop on the market. 
Clearing the rights of performers would be mo re complex, as it woul d involve identifying all 
performers whose performances are embodied in  a sound recording. Moreover, when the term 
of protection for record producer s and performers is the same, all the rights can be cleared 
from the record producer. This is because th e producer has an assignment from all the 
performers who perform on the re cord. If the rights of perform ers only are extended, it may 
no longer be possible to clear the performers' rights from the producer, and the rights of each 
performer would have to be cleared individually during the extended term. 
7.2.8. The international dimension 
A term extension for performers only would have a negligible impact on the flow of royalties 
between the EU and the US. Sec tion 7.3.7 describes in more detail  why the impact on royalty 
flows would not be significant. 
7.2.9. Administrative burden  
Extending the term of protection for performers  would require an amendment to Directive 
2006/116/EC and Member States would then have to amend their national laws accordingly. 
This would only require Member States to adapt their existing laws covering performers. The 
administrative burden incumbent on Member St ates would be considerably lower than 
introducing a new law.  
However, linking the term of protection to th e lifetime of performers would raise complex 
issues, essentially because co-performances, i. e. performances by a band, an orchestra or a 
featured artists accompanied by session musicians77 are the rule.  
This leads to an increased legislative bur den for Member States . There are currently no rules 
providing for the calculation of  the term of protection for co-performances, because the event 
which triggers the current term of protection is the publication of th e performance. If the 
event triggering the term of pr otection is the death of a pe rformer, then, when several 
                                                 
77 Under international and national laws, performers enjoy rights in their performance, unlike copyright, 
irrespective of its originality. It is likely that all performers would have to be taken into account to 
calculate the term of protection. 
 
EN 33   EN performers contribute to a recording or perf ormance, it might seem more appropriate to 
calculate the term from the death of the last su rviving performer, but this could also lead to 
excessively long terms of protec tion. Alternatively, it could be provided that the contributions 
of session musicians should not be taken into account to calculate the term of protection78. 
However, there are currently no Community rule s on this matter. The analogy with the term 
of copyright protection of co-written work s is of limited assistance, as there are no 
Community rules on the calculation of the te rm of protection for co-written works. 
In addition, the calculation of th e term of protection from the death of the performers would 
also have a negative impact on tracking costs and transaction costs . Tracking costs are the 
costs of identifying the perfor mers whose performances are embodied in a sound recording 
and registering their death. In pr actice, it would be excessively cumbersome to identify all the 
members of an orchestra, which includes more  than 80 musicians, and of session musicians 
which are hired on an occasional ba sis to perform certain parts or instruments in a recording . 
Because session musicians are paid a flat fee fo r the assignment of thei r rights, the recording 
companies do not keep track of them.In addition to identifying performers, the databases used to manage performers' rights and to calculate the term of prot ection would then have to be 
modified to include additional da ta on the death of all the perf ormers in a sound recording. In 
addition, for collecting societies,  the cross-border administrati on of rights would also become 
more complex and more expensive
79. This could be even more complex if Member States 
adopt different rules on the calculat ion of term for co-performances. 
Finally, the term of protection of co-perfo rmed musical works would give rise to legal 
uncertainty , because the term of protection would no longer depend on an easily identifiable 
and certain event, namely the date of publica tion or broadcasting of the record. Instead, the 
term of protection would depend on two factors: first, which performers are performing in the 
record, and second, the date of each performer's death. Third pa rties exploiting a record which 
they believe in the public domai n would face the risk of unide ntified performers bringing 
claims in sound recordings a nd thus extending the term of protection of that record. 
7.3. Extend the term of protection for perf ormers and record producers from 50 to 
95 years 
7.3.1. Impact on performers The effect on performers would be more extens ive than under the 'life or 50 years' term. For 
instance, Edith Piaf's interpreta tion of 'Non, je ne regrette rien ', recorded in 1960, was used in 
the film 'La Môme' (2007), and experienced renewed success. However, as Edith Piaf died in 1963, the term of protection under  the "life or 50 years term " would effectively not be 
extended and expire on 1
st January 2011, thus leading to a shor tfall after that date. Under the 
95 years option, the recording would be protected until 1st January 2056.  
                                                 
78 This would be possible because the minimum term of protection required under international 
agreements (50 years from end of the calendar year on which the performance took place, under Article 
14(5)of the TRIPs agreement) would be complied with. However, it would require articulating in legal 
term a difficult distinction between session musicians and other performers. 
79 In effect, collecting societies often exploit each other's repertoire on their own territory and exchange 
information and payments under so-called "reciprocal  agreements". For a more detailed explanation of 
the cross-border management of copyright, see 'Impact Assessment Reforming Cross-Border Collective Management Of Copyright And Related Rights For Legitimate Online Music Services', SEC (2005) 
1254, p.6, available at 
http://ec.europa.eu/internal_market/copyright/docs/management/sec_2005_1254_en.pdf
.  
 
EN 34   EN Performers derive revenue both from royalty in come linked to the sale of sound recordings 
and from secondary remuneration claims linked to the broadcasting and communication to the 
public of their performances. As the overall level of revenue generated from secondary 
remuneration claims should not increase because of  the term extension, the impact is difficult 
to determine. Individual performers would however benefit from income streams for 45 
additional years.  
For the sale of sound recordings, the PWC study estimates the present value of performers' 
and producers' additional income in the extended term between € 44 and € 843 million in the EU (see section 7.3.2). On this basis, an estimat e of the additional annual revenue accruing to 
performers from a 45 year term extension can be drawn up. 
The calculation of annual revenue for an av erage performer is based on a variety of 
assumptions that are further explained in the Annex, section 3. These assumptions concern the 
distribution of financial benef its between performers and record producers (performers getting 
10% and producers 90% of the re venues), the annual distribution of the overall present value 
gain and the number of performers that would be nefit from a term extension. On the basis of 
these assumptions, the additional term of prot ection would generate between € 46 and € 737 
per performer per year. Just as for the 'life or  50' option, one should also mention that a term 
extension would be a boost for performers' and se ssion musicians' social status. They will feel 
that their artistic contribution is properly valued by society. 
7.3.2. Impact on record producers 
Several economic studies attempt to analyse the impact that a term extension from 50 to 95 
years would have on the sales revenue of r ecord producers. All of them come to the 
conclusion that an extension would have some financial be nefits; however they are not 
unanimous on how large this benefit would be. This IA is based on three principal studies 
submitted by stakeholders
80. These studies consider the future revenue stream that record 
companies can expect to receive from an additional 45 years of protection and compare this 
revenue with the revenue stream generate d during the initial 50 years of protection.81 
                                                 
80 These studies are: 1) Liebowitz (February 2006), "What are the Co nsequences of the EU extending 
Copyright Length for Sound Recordings, report prepared for IFPI. (" Liebowitz "); 2) 
PriceWaterhouseCoopers (April 2006), "The Impact of Copyright Extension for Sound Recordings in 
the UK", report prepared for BPI. (" PWC "); 3) Centre for IP and Information Law (2006), "Review of 
the Economic Evidence Relating to an Extension of the Term of Copyright in Sound Recordings", 
report prepared for the Gower's review. (" CIPIL ") 
81 The estimates vary on account of the basic assumpti ons that each study makes with respect to three key 
parameters: (1) the discount rate that is applied to determine the present value of future income that 
results from term extension; (2) assumptions as to the depreciation of annual sales value with the passage of time (so-called 'cultural depreciation'); (2) the possible loss of market share upon expiry of 
the 50 year term. The choice of the discount rate is one of the core issues addressed by all of the studies 
surveyed. The authors of theses studies find it difficult to choose the appropriate discount rate, especially in relation to a 45 year period in the future. Due to differences in the appraisal of the risk 
inherent in the production of sound recordings, the three studies apply discount rates that range from 
3% to 9% in real terms (Liebowitz: 3-6%; PWC: 9% and CIPIL: 5-9%). The European Commission Impact Assessment Guidelines SEC(2005) 791, (p. 37), recommend, on the other hand, application of a 
standard discount rate of 4%. This rate broadly corresponds to the average real yield on longer-term 
government debt in the EU over a period from the early 1980s onwards. The economics of copyright literature is, however, unanimous that using a 4% discount rate to calculate the present value of a 45 
year term extension yields results that are too optim istic. For the purpose of this analysis, therefore, 
more conservative estimates are presented.  
 
EN 35   EN Estimated future revenue from extension is th en calculated as a percentage of the revenue 
achieved in the initial 50 years. The uncer tainty that accompanies these studies is 
understandable since estimates must cover almost five decades. Besides, not all impacts are of 
economic dimension.  
The three studies come to the fo llowing conclusions as to the percentage that estimated future 
income generated in the extra 45 years of protect ion represents when compared to the income 
achieved in the initial 50 years: Liebow itz: 3-14%; PWC: 0.1-1.9%; and CIPIL: <1%.  
The PWC study is the only study based on actual data and enab les us to add a concrete 
dimension to the results. This  study applies to the UK and it an alyses the revenues from music 
sales, license fee income and other royalty income. The value of the initial 50 year term for sales in the UK is calculated to reach £ 8.568 billion. The high-end estimate of total present 
value of the 95-year period would amount to  £ 8.731 billion, whereas the low-end estimate 
would yield £ 8.576 billion
82. A 45 year extension of the te rm of protection would create 
between £ 8.4 million and £ 163 million in additi onal revenues. The PWC study is limited to 
the UK sales revenue. As EU sales are 3.5 times larger than the UK sales, it can be roughly 
estimated that a 45 year term extension would generate between € 44 million and € 843 million in additional revenues for the EU. If r ecord producers get 90% of  the sales price and 
performers only 10%, the benefit to record pr oducers would yield between € 39 million and € 
758 million. If a fund of 20% were set up for performers, the benefit to record producers 
would decrease to between € 31 million and € 607 million. 
If the benefit from term extension were to be ca lculated on the basis of other, higher estimates 
(using a lower discount rate) (see Liebowitz stud y), the music industry could get an additional 
£ 1.182 billion in the UK. Extrapolated to the EU level, this would yiel d to over € 6 billion. 
However, some economists have expressed reserv ations on this high-end estimate. This is due 
to the fact that Liebowitz reli es on very optimistic assumptions  with respect to the discount 
rate, the continued popularity of  repertoire (the so-called 'c ultural depreciation') and the 
potential loss of market share if  the term of protection expires. 
7.3.3. Impact on broadcasters and public venues where music is played 
For the reasons explained in rela tion to the 'life or 50' term extension for performers (see 
section 7.2.3), there would be no impact on prices  paid for broadcasts and performances of 
music in public venues. 
7.3.4. Impact on public domain record labels 
The impact of a term extensio n for both performers and record  producers would be similar to 
the impact of a term extension for performers  only (see section 7.2.4). This is because record 
producers are usually granted an assignment of the performers' rights. The longer term would 
imply that the impact on public domain labels w ould last longer. Their loss of earnings would 
be equivalent to the additional earnings  of record producer s (see section 7.3.2). 
                                                
 
82 The higher range estimate assumes, in favour of the proponents of term extension, that the expiry of 
copyright entails a 100% market share loss, whereas the lower end estimate assumes no market loss.  
 
EN 36   EN 7.3.5. Impact on consumers 
A term extension would have no negative impacts on consumer prices and would have a 
positive impact on the quality of services offered to consumers as well as on consumer choice. It would send a clear signal th at the interests of the music i ndustry and of consumers are not 
opposed but instead concur on a competitive music market.  
The impact of on consumer prices is expected to be minimal. The only study that compares 
prices for in-copyright and out-of-copyright sound recordings is the PWC study on "The 
Impact of Copyright Extension for Sound Recordings in the UK"
83. The PWC study looks at 
129 albums recorded between 1950 and 1958. It finds  no clear evidence that records in which 
the related rights have expired are sold systematically at lower prices than records which are still protected.  
Other studies have considered the pr ice impact of copyright protection
84. For instance, the 
Gower's review relies on a study analysing the imp act of copyright on the price of books, and 
relies on partial results of that survey85. Studies on books are not di rectly relevant to the 
impact of copyright on prices of sound recordi ngs. This is because books are only subject to 
one copyright (i.e., of the authors) while sound recordings, as well as being protected by the 
related rights of producers and performers, inco rporate copyright protected musical works. 
Thus when the related rights in  the sound recording have expire d, the copyright in the musical 
composition often has not. As a result, the gr adual "de-protection" (first the neighbouring 
rights, then the authors in co -written) leads to even less pr ice fluctuations as with books. 
However, even in the category of books, eith er no overall price difference is found between 
samples of books in- or out-of-copyright, or the impact of copyright on the price is extremely 
model-dependant and therefore th e estimates obtained cannot be very robust. Given the lack 
of widely accepted models and the length of the ti me span, it is fair to say that there is no 
clear evidence that prices for sound recordi ngs will increase due to term extension.  
Consumers can also access music online or from  mobile phones. The digital music market is 
growing and currently accounts for approximately  15% of the music market worldwide. The 
various pricing models of online music clearly s how that whether a soun d recording is in or 
out of copyright is not a relevant  factor to determine consumer prices. For instance, as far as 
"download to own" is concerned, several mu sic vending platform operate by selling tracks 
individually, for instance MSN Music86, Nokia Music Store87, iTunes88, Napster Light89, 
                                                 
83 PriceWaterhouseCoopers (April 2006), "The Impact of Copyright Extension for Sound Recordings in 
the UK", report prepared for BPI. 
84 Liebowitz (May 2007 – preliminary draft), "Copyright: How Large are the Deadweight Losses"; and 
Heald (2006), "Property Rights and the Efficient Exploitation of Copyrighted Works: an Empirical 
Analysis of Public Domain and Copyrighted Fiction Best Sellers". 
85 The Gowers review relies on Heald (2006). In the whole sample of bestsellers, no difference in price is 
to be found, which is however not true for the much smaller sub-sample of durable books (i.e. most 
enduringly popular), where books in-copyright were priced higher than books out-of-copyright. Gowers presents only these latter results.  
86 MSN Music operates in Austria, Belgium, Denmark, Finland, France,  Germany, Italy, Netherlands, 
Spain, Sweden and the United Kingdom.  
87 Nokia Music Store operates in Fr ance, Finland, Germany, Ireland, It aly, Netherlands, Sweden and the 
UK. 
88 iTunes operates in Austria, Belgium, Denmark, Germany, Finland, France, Greece, Ireland, Italy, 
Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, Spain and the U.K., at the same 
price. See Apple press releas e, London, January 9, 2008. 
89 Napster operates in Germany and the UK. 
 
EN 37   EN Musicload.de90 or Fnacmusic.com91. The vast majority of these services sell tracks at a single 
fixed price92, whether or not it is in copyright or not93. Other business models offer their 
customers access to music on a subscription basis, either for a limited number of downloads or on an "all you can eat" basis (unlimited downloads). Such services, for example 
Omniphone Music Service
94, FNAC musique illimitée95, eMusic96 (which includes the 
complete classical music catalogue of Naxos Reco rds) or Napster to go,  charge a monthly fee 
whatever the tracks downloade d, i.e. whether they are in c opyright or not. Finally, some 
services offer music "bundled" with another product such as a mobile phone ("Nokia comes 
with music"97) or services such as Internet Access (for example, in France, Neuf Cegetel 
bundled with access to Universal's catalogue or  Alice bundled with EMI's catalogue). Again, 
in that case, it is clear that the price paid by the consumer is the same whether he downloads 
music which is in or out of  copyright. Finally, it should be noted that public domain 
companies do not release their s ound recordings on the internet, but instead only sell them as 
CDs. 
The above circumstances would in dicate that the very small copyright payments to performers 
and the producers of sound recordings might not be  the most relevant factor determining retail 
prices. This is partly because sound recordings are only fully in the 'public domain' when both 
the related rights in the performance and the reco rd and the copyright in the musical work are 
no longer protected. Accordingly, other than cla ssical music, few records are completely in 
the 'public domain'. Moreover, the sound recordings  will still be protecte d in the US where the 
term of protection is 95 years. Making available a work on the in ternet would therefore not be 
possible on a global scale, because the making av ailable would amount to an infringement of 
the record producer's rights in the US98. Moreover, sound recordings  compete with all other 
sound recordings of the same genre for the same  audience whether they are in or out of 
copyright99. This competition between protected r ecordings and between  protected and non-
protected recordings keeps prices down.  
The impact on the quality  of the products and services  offered to consumers  might also be 
positive. Although competition in offering public  domain sound recordings might increase 
                                                 
90 Musicload.de operates in Germany. 
91 Fnacmusic.com operates in France. 
92 With some exceptions, such as Musicload in Ge rmany. Several factors come into account in 
Musicload's pricing, such as the price of the album in relation to the number of tracks, and the duration 
of the tracks. 
93 MSN Music: €0.99 per track; Nokia Music Store: €1.00 per track, £0.80 in the UK; iTunes: € 0.99 per 
track; Napster Light: €0.99, £0.79 in the UK; Fnacmusic.com: €0.99 per track. 
94 UK. 
95 France. 
96 Austria, Belgium. Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, 
Portugal, Poland, Slovenia, Spain, Sweden and the UK. 
97 Yet to be launched. 
98 In the US, the Federal term of protection only applies from 1972. All records previously released are 
still protected under most state laws and are not pre-empted under federal law. Only in 2067 will the 
rights in records start falling in the public domain in the whole of the US under federal law. See New 
York Court of Appeals, 5 April 2007, Capitol Records, Inc. v. Naxos of America, Inc , decision: 
USCOA,2 No. 30. 
99 "In the vast majority of instances, copyright provides no monopoly power to the copyright owner and 
the only cost advantage that woul d accrue to consumers of non-copyri ght protected works would be the 
saving for not having to pay the creator of the work" (Liebowitz, February 2006, 'What are the 
Consequences of the EU extending Copyright Length for Sound Recordings', report prepared for IFPI., 
p. 22).  
 
EN 38   EN their quality, it is not clear that this is th e case. Indeed performers and record producers have 
an interest in defending their artistic integrit y and their reputation which ensures that they 
offer only the highest quality recordings to the public. In contrast , some public domain 
companies re-release recordings without due rega rd for the quality of the recording, without 
re-mastering old titles, and ofte n without regard for the value of  the performance. Instead, the 
records are used as cheap promotional material to bring consumers to supermarkets. This is 
true to such an extent that in some instances, such as the Henri Salvador case100, the moral 
rights of the performer can be infringed. Also, the re cord company which continues to exploit 
a sound recording has an incentive  to maximise the value of th e recording. Record companies 
therefore invest heavily in the promotion and marketing of thei r records – up to 16% of their 
revenues101 – thus ensuring that there is demand for those sound recordings and that they 
reach a wide audience. 
Likewise, it has been seen above that very  few public domain companies market records 
which are genuinely out of copyright, i.e. when the copyright in the musical composition and the related rights in the phonogram and performa nces have expired. While some companies 
do, they perform this on a very limited scale, and the sound recordings are not available for 
download. Indeed when all rights have expired, there are few incentives to publish old sound 
recordings, because any competitor can free ride the effort expended in digitising and marketing the sound- recording.  
The impact on consumer choice  is also expected to be positive. In the long run, this is because 
a term extension will benefit cultural diversity by ensuring the availability of resources to fund and develop new talent (see below). In th e short to medium term, a term extension 
provides record companies with an incentive to di gitise and market their back catalogue of old 
recordings. It is already clear that internet distribution offers  unique opportunities to market 
an unprecedented quantity of s ound recordings. The major downloa d services currently offer 
more than six million tracks available online. In addition, many recordings are now expected 
to enjoy a 'second life' on the Internet. Since digital distribution can represent new cheaper 
ways in which to offer a very wide variety of recordings
 on a global scale, record companies 
will be incentivised to benefit from what has be en coined as the 'long tail' effect – low sales 
volumes in small markets (especially in the digi tal online context) which can collectively add 
up to and even rival the relatively few bestsellers102. For instance, in the UK, the top 40 single 
tracks account for only 10% of all tracks downloa ded, while the 'long tail' accounts for most 
online sales volume103. Universal’s download only re-issu e programme, wh ich includes only 
“deleted” recordings, launched in 2006, has prom pted 3 million downloads since its launch in 
2006. Many record companies will make their en tire back catalogue av ailable online and the 
still popular sound recordings from the 1960s w ill experience a further upturn in sales as a 
result of an expansion in di gital distribution. For example, Universal makes available to 
consumers 18 000 previously ‘deleted’ tracks an d the digitisation of its back catalogue should 
                                                 
100 Paris Court of Appeal, November 14th, 2007, SARL Jacky boy Music v Salvador , JurisData : 2007-
349990, see above, section 7.24. 
101 ADAMI study, 'Filière de la musique enregistrée : quels sont les véritables revenus des artistes 
interprètes?' (April 2006), p.13. 
102 "The Long Tail", by Chris Anderson, 'Wired' magazine, October 2004. 
103 IFPI Digital Music Report 2008, p.8. 
 
EN 39   EN reach 60 000 tracks by the end of 2008; Deut sche Grammophon offers a music download 
service which includes 2500 albums, 600 of which are not available on CD104.  
This contributes to enhancing consumer choice as many recordings that are not available in 
retail stores due to limited shelf space can no w be made available online. Older or niche 
European repertoire will be more widely avai lable. While it might be  expected that public 
domain companies would make more recordings available, this has not been the case. As explained above, there are few companies w ho market public domain sound recordings of 
out-of-copyright musical compositions. Moreover, as far as niche markets are concerned, they 
do so at relatively high prices a nd do not offer those recordings  for download. This is partly 
because absent property rights, public domain co mpanies are exposed to free ridding: they 
have no incentive to invest in promotion a nd marketing which could be free-ridden by any 
competitors. This is why companies such as Naxos opt to re-record public domain classical music
105. 
7.3.6. Impact on cultural diversity 
Since term extension will lead to some financia l benefit for record producers, more resources 
from old recordings are available to fund new talent. Resources from old recordings, 
especially from recordings in the golden fifties and sixties, can still be  considerable, even in 
the years to come. Sales of s ound recordings have an initial boost in the fi rst few years 
following their publication and then decline from th at level to remain, for decades, at a fairly 
constant level106. Record companies state that they of ten use the income derived from older 
recordings to produce and market new recordin gs. More income from the golden 1960's and 
other enduringly successful recordings will help finance investment in new recordings.  
According to Nigel Parker, "the music busines s has grown based on the long-tail income from 
established copyrights. Accumu lation of copyrights spreads ri sk and generates funds to 
finance new music. Without long te rm profits from the most succe ssful creators, investment in 
new music would be almost non-existent"107. This means that the music industry is essentially 
a portfolio business where successful recordings will generate the revenue required to finance new recordings. This would mean that new succe ssful European repertoire  would need to rely 
on older repertoire providing the revenue necessary to finance cultural diversity.  
An increase in A&R spending and a better financ ial situation of the recording industry will 
therefore provide increased opportu nities for performers in bot h popular and niche repertoire. 
According to the PWC study, A&R amounts to 17% of revenues. If the estimated financial 
benefit of the record producers is between € 39 million and € 758 million, this results in the 
additional A&R value of between € 6.7 million and € 129 million. In the first decade, the additional A&R value would be be tween € 1.7 million and € 28 million
108. Part of this 
additional investment will benefit directly new EU performers. 
                                                 
104 IFPI Digital Music Report 2008, p.11; Universal press release, LONDON, January 18, 2006, available 
at http://new.umusic.com/ News.aspx?NewsId=355. 
105 See e.g. W. Landes, R. Posner, 'Indefinitely Renewable Copyright', John M. Olin Law and Economics 
Working Paper 154, p. 19, available at http://ssrn.com/abstract_id=319321  . 
106 Liebowitz (February 2006), 'What are the Consequences of the EU extending Copyright Length for 
Sound Recordings', report prepared for IFPI. 
107 Nigel Parker (2004), 'Music Business: Infrastructure, Practice and Law'. 
108 All figures should be adapted, if a fund diverti ng 20% of record producers' additional revenue to 
performers was accounted for (see Annex, section 3). 
 
EN 40   EN 7.3.7. Impact on informati on society services 
The impact on digital libraries and other similar services w ould be negative. Although the 
issue of rights clearance would not be as co mplicated as under option 2b, it would arise over a 
longer period of time. However, flexible so lutions for rights clea rance and orphan works 
could be found on an ad hoc basis. 
7.3.8. The international dimension 
The impact of a term extension on the internat ional flow or royaltie s should be considered 
separately in relation to sales and seconda ry exploitation. The in come from secondary 
exploitation is collectively administered and as a consequence, the distributions to EU 
performers are more easily traceable. Moreover, a significantly larger share of remuneration 
from secondary exploitation is distribu ted to performers than from sales109. 
As far as sales  are concerned, according to available I FPI figures, the domestic repertoire of 
each Member State represents in EU aggregate terms 48% in value of music sales in tangible 
form (mainly CDs). The international repert oire accounts for 45%. But 'international' 
repertoire here includes Europ ean repertoire from other Member States as well as US and 
non-US repertoire ( e.g., Latin American repertoire).  
Equally, the Gowers report claims  that 43% of the revenues that would be earned in the 
extended term would be remitted 'overseas'110. However, these 43% include US repertoire and  
repertoire from other European states. It is therefore a fallacy to believe that 43% of UK 
remittances in a longer term would all go to the US or to other non-EU countries. On the 
contrary, much of this revenue would remain in the European Union. For example, figures available for Denmark show that 45% of the repe rtoire sold in Denmark is of Danish (i.e., 
domestic) origin, 37% comes fr om other-European Member Stat es and only 14% is imported 
from the US and 4% from other non-EU sources
111. This means that most of the additional 
revenue collected over an extended term of pr otection would therefore stay in Europe and 
benefit European performers. The Gowers esti mates would not, therefore, be relevant to 
determine the trade balance of the EU as a whole. 
The flow of royalties from broadcasting and performing phonograms in public venues would 
be only very marginally aff ected by a term extension. Th is is because the EU's only 
significant trading partner for music is the US112, and under the applicable international 
conventions, the remittances between the EU and the US are currently minimal (see Annex, 
section 4).  
Under the Rome Convention and the WIPO Pe rformances and Phonograms Treaty (WPPT), 
the royalty flows from the EU to the US are small. Indeed most EU Member States do not 
grant equitable remuneration under the Ro me Convention to phonograms produced by US 
                                                 
109 The split for revenues from the single equitable re muneration for performers is usually 50-50 between 
performers and producers. Overall, in the EU in 2004, performers collecting societies collected € 351 
million and producers collecting societies collected € 293 million, KEA Study, p. 34. 
110 Gowers Review on Intellectual Property, December 2006, p. 55.  
111 2004 Annual Report of KODA, the Danish Performing Rights Society. 
112 In particular, in 2004 EU-15 imports of record materials from the US amounted to USD 752 million in 
2004 , while the added imports from Japan, Aust ralia, Canada and China amounted to USD 260 million 
(source: OECD). 
 
EN 41   EN record producers or first fixed in the US113. Under the WPPT, to which the US and the EC are 
signatories, the US applies equi table remuneration only to certain digital audio transmissions 
(such as webcasting). Accordingly, EU Memb er States are under no obligation under the 
WPPT to grant phonograms produced by US record producers or first fixed in the US a right 
to equitable remuneration for broad casting and communication to the public114. In practice, 
only a small number of Member States (e.g. UK, Ireland) pay royalt ies to US record 
producers for records produced by US producers or published simultaneously in the US and 
another country which is a party to the Rome  Convention or the WPPT. Even though, the UK 
and Ireland do not grant such pa yments to US performers. 
The term extension would thus not result in additional remittances to the US for secondary 
remuneration claims. 
7.3.9. Administrative burden 
Changing the term of protecti on would require an amendment to Direc tive 2006/116/EC and 
Member States would then have to amend th eir national laws accordingly. However, this 
burden would not be substantial since they w ould not be introducing new laws but amending 
existing legislation. 
7.4. Moral rights of performers 
The impact on performers  would be positive.  Performers would have the right to object to 
derogatory uses of their perf ormances. This would not provide them with supplementary 
income other than awards for damages. It woul d allow them to restrict objectionable uses of 
their performances, for instan ce use in advertising, use in  conjunction with pornographic 
material or use in certain political contexts. It would also improve th eir social standing and 
signal the recognition of their ar tistic contributions more or less on a par with authors.  
However, merely granting performers the right  to restrict objectionable uses of their 
performances would not necessar ily protect them during the whol e of their lifetime. In some 
Member States, the moral rights of performers ar e perpetual. In others, moral rights last as 
long as the performer's economic rights: performers thus lose their moral rights when their 
performances fall into  the public domain. 
The impact on record producers  would be negative. Performers might be able to restrict 
certain uses of their performances, for instance in commercial advertising. As music is often 
used in advertising, this could in certain cas es deprive record producers of revenues. The 
performers might also have a claim for da mages against producers who allow objectionable 
uses without the performer's authorisation. For instance, the French si nger/songwriter Gilbert 
Montagné successfully relied on his moral rights (as an author) in the song "On va s'aimer" to 
sue Universal Music publishing, for allowing the use of a modified version of the song ("On 
va fluncher") in a commercial for a food chain115. 
The Impact on broadcasters and public venues where music is  played  would also be negative 
as performers could object to certain uses of their performances in radio and TV broadcasts. 
                                                 
113 This stems from notifications made under the Article 5(3) of the Rome Convention. 
114 Article 15(3) in conjunction w ith Article 4(2) of the WPPT. 
115 Didier B., Gilbert M. and SNAC v Universal Music Publishing and others , French Cour de Cassation, 
1st section, 5 December 2006, case n°1718 FS-D. 
 
EN 42   EN The impact on public domain labels could be negative. Performers may be able to restrict 
certain uses of their works once they are in  the public domain, depe nding on whether their 
moral rights are limited in time or perpetual. For example, in France, the performer Henri 
Salvador successfully sued a label for releasing and distributing in supe rmarkets at a minimal 
price a cheap compilation including his songs116. The public domain labels wishing to exploit 
songs in the public domain would thus have to request the authorisatio n of the performer or 
his heirs. 
The impact on cultural diversity would be positive. Strengthening moral rights of performers 
would be beneficial for Europ ean cultural diversity, as their social status and recognition 
would be improved. Although this is  a non-pecuniary aspect of prot ection, it woul d contribute 
to a 'feel good' factor for performers who woul d be confident in their ability to exercise 
control over objectionable uses of their work 
The administrative burden  would be significant. Since mo ral rights have not yet been 
harmonised at European level, the Commission would have to pr opose stand alone legislation.  
Harmonising moral rights would thus entail a significant legislative burden on many Member 
States, as there are currently signi ficant disparities in the moral ri ghts granted to performers in 
Member States, relating to the substance and the duration of those rights . Such differences are 
permitted under international law and reflect the different copyr ight traditions of Member 
States. For instance in the UK117, the moral rights of performers are limited in time and some 
must be asserted or can be waivered, while in  France, the moral rights of performers are 
unwaiverable and perpetual118.  
7.5. Protection of performers’ ri ghts: ‘use it or lose it’ 
The impact on performers  would be positive. Performers would be in a better position to 
ensure their creative output reaches the public. The rights in  unexploited recordings would 
revert to them and they c ould re-release them through anot her record company (or do it 
themselves) if the original company does not pub lish or release the record. This is already 
possible for authors und er some national laws119 and it appears that so me independent record 
companies do actually give rights back to performers if they ha ve stopped sel ling the record 
for a certain time. Specific legislative measures  would nevertheless strengthen the position of 
performers. 
The impact on cultural diversity  would also be positive. If performers were to make use of the 
possibility to get their sound recording re-r eleased by another record company, or by 
themselves, more repertoire, including niche and lo cal music, would be widely available. This 
would strengthen Europ ean cultural diversity. 
Consumers  would also benefit from a wider selec tion of repertoire because the performer 
would be able to reissue the sound recording if the original record company ceases to market 
it. 
                                                 
116 Paris Court of Appeal, November 14th, 2007, SARL Jacky boy Music v Salvador , JurisData : 2007-
349990.  
117 See The Performances (Moral Rights, etc.) Regu lations 2006, which amends the 1988 Copyright 
Designs and Patents Act. 
118 See Article L. 212-2 of the French Intellectual Property Code. 
119 Austria, Belgium, Germany, Luxemburg, Nordic Countries, Portugal, Spain. 
 
EN 43   EN In terms of  administrative burden,  further amendments to Directive 2006/116/EC would be 
required, as well as transposition measures from Member States which do not currently 
provide for a ‘use it or lose it’ provision. Fl exibility should be allowed in transposition, in 
order for measures to fit in with the Memb er States' existing copyright and contract 
legislation.  Alternatively the Directive could adop t a softer approach, by encouraging  Member 
States to be vigilant that record companies vol untarily introduce 'use it or lose it' conditions 
into their contracts. 
7.6. Creation of a fund for session musicians 
The fund dedicated to session musicians would include 20% of the revenues derived by 
record companies from the sale of sound reco rdings benefiting from a term extension. The 
20% should be based on revenues, as this allo ws transparency and enforceability of the 
provision. The 20% strike an appropriate bala nce between the interests of session musicians 
and of the record producers.  
The impact on session musicians  would be positive. The amount of additional revenue for 
session musicians would depend on the extent of the increase in the term of protection for 
record producers. An average performer w ould benefit from € 47 to € 737 in additional 
revenues every year (see Annex, section 3 for methodology) from a 45-year term extension.  
As there are no estimates available as to the number of session musici ans whose performances 
would fall into the public domai n, we present indicative estima tes on how much an average 
performer would benefit if the term were extend ed to 95 years and the fund were to benefit all 
performers. The payment to an average performe r would increase to an average of € 130 to € 
2065 every year, i.e. 2.8 times120.  
The impact on record producers  would be negative, but shoul d be considered against the 
benefits of the term extension. In the course of  a 45 year term extensio n, the benefits of the 
extension of term for record producers would be reduced from € 758 million to € 607 million 
(high end estimate) or from € 39 million to € 31 million (low end estimate). Consequently, 
this would also reduce the additional revenue available for A&R from € 129 million to € 103 
million (high end estimate) or from € 6.7 million to € 5.3 million (low end estimate).  
A simple model calculation in the IA shows th at a 20% share would st rike the right balance 
between the profitability of phonograms that ar e exploited in the ex tended term and the 
creation of a tangible added benefit for performe rs. This calculation attempts to measure the 
impact that a revenue-based fund would have on r ecord labels' profit margin in the years after 
term extension. 
Average self-declared overall company-wide  operating margin of the phonogram majors 
(EBITA/revenue) in 2007 is 9.1% (EMI 3.3%  - Universal 12.8% - Warner 14% - BMG 
6.2%). As mentioned above, according to IFPI, only one CD in eight is profitable. 
If only 1 in 8 CDs is profitable and the averag e profit rate is 9.1%, this one profitable CD 
must be generating a profit margin that is high enough to compensate for seven unprofitable 
CDs and still produce an a ggregate profit of 9.1%.  
                                                 
120 As the fund would be drawn from the income of record companies, the revenues of featured artists 
would not be adversely affected. The overall im pact for performers would thus be positive. 
 
EN 44   EN On this basis, one can estimate the profitabili ty of the one successful  CD by comparing its 
profit margin with that of the remaining seven CDs. Assuming that: 5 CDs ("CD2" through 
"CD6" in the example) break even (profit = 0), which is extremely optimistic and 2 CDs 
("CD7" and "CD8") make a loss (for "CD7" the lo ss is 30; for "CD8" the loss is 40); then the 
successful CD "CD1" has to make a substantial profit. In our example the profit margin is 
60%.  
As phonogram producers will focus on reissui ng the "premium" CDs during the extended 
term, i.e., those with very high profit margin s, a revenue-based fund (setting aside 20% of 
revenue achieved with the premiu m CDs) would mean that 20% of  the revenue attributed to 
CD "CD1", 250 (i.e., 50) would be set aside for performers. Therefore, even after taking into 
account the fund, the phonogram producers' profit marg in in the extended te rm would still be 
100/250=40%. 
Table 3: Profitability of CDs 
Administrative burden : the creation of the fund for sess ion musicians would require each 
record company to set up an account in favour of session musicians. Such accounts appear to 
be relatively straightforward to set up as the US example on the remuneration scheme for 
webcasting shows121. The administrative burden on reco rd companies would be further 
limited by the fact that the record companies w ould not have to identify the beneficiaries and 
distribute the monies collected in the f und. Distribution would be incumbent on the 
performing artists collecting society that represents session musicians and that, in consequence, has a database on session musicians in place. 
7.7. Summary of impacts 
Table 4 summarises the impact analysis cont ained in section 7 identifying economic and 
social (cultural) impacts of the different options.  
                                                
 
121 Under the Small Webcasters Settlement Act of 2002, session musicians are entitled to 2.5% of royalties. 
The royalties "are deposited in an  escrow account managed by an in dependent administrator jointly 
appointed by copyright owners of sound recordi ngs and the American Federation of Musicians".  
 
EN 45   EN Option 2a 
"extension for 50 
years or life"Option 2b 
"extension to 95 
years with 
conditions"Option 3b "moral 
rights"Option 3c "use it or 
lose it"Option 3d "fund 
for session 
musicians"
Performers + ++ + ++ ++
Record producers ++ + - O -
Broadcasters OO - OO
Public domain 
record labels-- --O O
Consumers OOOOO
Cultural diversity +++ + + +
Information Society
services- - --- O
International 
dimensionOOOOO
Administrative 
burden-- - -- - -
++
+
O
-
-- larger negative impactlarger impact
some impact
no impact
some negative impact
 
Table 4: Summary table of impacts 
8. C OMPARISON OF OPTIONS  
Table 5 summarises the degree to which the different options are suitable to achieve the six 
operational objectives identified in  the impact assessment (section 5.3). It becomes clear from 
this table that the options involving a term ex tension (2a and 2b) seem to be rather more 
successful in contributing towards the pol icy objectives of increasing performers' 
remuneration and international competitiveness.  Both options 2a and 2b bring incremental 
financial benefits to performers and would thus allow more performers to dedicate more of 
their time to creation. In addition, option 2b w ould also increase incrementally the pool of 
resources available to record producers for A&R and digitisation of thei r back catalogue, and 
could thus have an additional posi tive impact on cultural diversity.  
Option 2b is easier to implement than option 2a, as the latter links calculation of the term of 
protection to the life of individual performers. As the example of co-written works shows, 
linking a copyright to the life of  individual contributors in pr actice raises complex issues 
when several performers contribute to a sound recording. Each co-performer in a performance 
would have to be registered and the term would only be trig gered upon the death of the last 
co-performer.  
On the other hand, Option 3c has very substantia l and undeniable benefits as well. It would 
incrementally increase the revenue stream channe lled to performers as they regain control 
over recordings which would otherwise not be commercially exploited by the record industry 
and the revitalisation of this long 'dormant' repertoire would open up  business opportunities 
for new recording labels, especially t hose who rely on smaller repertoire.  
 
EN 46   EN This option would thus be useful  as a complement to enhance the positive impact of a term 
extension on the revenue of performers.  
Table 5: Analysis of options against objectives 
9. M ONITORING AND EVALUATION  
Monitoring and evaluation will be conducted in line with the policy objectives as identified 
above. As policy options have not yet been c hosen, the details of m onitoring and evaluation 
will be more specifically defined at a later stage.  
The monitoring could develop along three models: 
(i) The first concentrates on the short-term , starting right after the adoption of the 
proposal. It focuses on the sheer implementa tion of the proposal, i.e. amendments of 
national rules. 
(ii) The second would be mid-term and focu s on direct effects such as performers' 
income and A&R spending by record companies in Europe. 
(iii) Finally, monitoring could be set up of the overall econo mic and social impacts of 
the proposal “on the ground” in the mid- to long-term.  
9.1. Contribute to enhancing the welfare of performers 
The remuneration of performers  can be monitored using the following indicators: 
Income from secondary remuneration claims : information on how much is collected 
and how it is distributed can be provided by collecting societies. 
Income from performers and trade unions a bout the evolution of types and content of 
contracts and collective agreements betw een performers and session musicians and 
record companies 
 
EN 47   EN Remuneration from exclusive rights: precise information is difficult to obtain as the 
remuneration is governed by individual co ntracts. However, record producers, 
collecting societies and performer's unions can provide indicator s of the level of 
remuneration of performers. 
Remuneration from record companies' in-house funds for session musicians: 
information on whether such in-house funds have been set up and whether payments have been made to session musicians. 
Gradually align authors' and performers' protection: 
 
Implementation of the proposal by Member  States: depending on the option chosen, 
the transposition process would be monitore d and indicate the level of protection 
enjoyed by performers in the Member States. 
Case law upholding the moral and economic rights of performers would also provide 
an indicator of the practical a nd legal effects of implementation. 
9.2. Contribute to enhancing the compet itiveness of the EU music industry 
Diminish the discrepancies in protecti on between the EU and US music markets:  
The amount of 'European' music broadcast in Europe, and the size of the music 
market, are indicators of whether the produc tion of European music is commercially 
attractive for record companies. This information can be provided by collecting societies which collect single equitable remuneration for performers and producers 
and by broadcasters. 
Information on the trend in the number and si ze of record producers in the EU and in 
the US would give an indicator on the deve lopment of the general economic situation 
of the music industry in the EU. 
Incremental increase in A&R resources: 
 
A&R expenditure would be directly obtained from record companies. Alternatively, 
the evolution of the revenues of record co mpanies would also provide an indicator, 
as A&R expenditure is usually in pro portion to record producers' revenues. 
9.3. Increase available music repertoire 
Ensure availability of mu sic at reasonable prices:  
Information on the pricing of records coul d be obtained from record companies, 
distributors and consumer groups. 
Information on the evolution of broadcasting tariffs can be obtained from collecting 
societies. 
Encourage the digitisation of back catalogue  
Repertoire and back catalogues made availa ble online by record companies, and the 
revenues derived, are indicators of whether the record industry used the additional 
 
EN 48   EN income from term extension to develop the offer of music to consumers. This 
information could be provided by record comp anies, distributors, 'brick and mortar' 
and online music retailers. 
Information on revenues generated from the 'long tail' effect would indicate whether 
record companies have an incentive to digitise and offer as many recordings as 
possible. This information could be provi ded by record companies, distributors, 
'brick and mortar' and online music retailers 
A more detailed set of indicators will be considered in the light of the policy choice selected. 
A first comprehensive evaluation  could therefore take place 5 y ears after the entry into force 
of the proposal. 
 
EN 49   EN  
ANNEX  
To the impact assessment on the legal and ec onomic situation of performers and record 
producers in the European Union 
  
 
EN 50   EN 1. P UBLIC CONSULTATION ON THE REVIEW OF THE EC LEGAL FRAMEWORK ON COPYRIGHT AND RELATED RIGHTS  
The following table presents the results of the above public consultation as  concerns the length of protection of related right s. 
NAME OF CONTRIBUTOR  
 REMARKS  
 REASONS GIVEN  
 
 
ISSUE 1 : Duration of protection of related rights 
 
AEPO  (Association of 
European Performers 
Organisations)  
70yrs  - Expiry in 2004 of recordings from 1954 (additional income) 
- compare to authors 
AFI (Associazione dei 
fonografici italiana) -increased investments, promotion of new talents 
- music in past not recouped investment costs 
- new technology good for global exploitation by (especially SME’s) 
new technology good for new business models - new fashion for singles (via internet) 
- phonogram producers are current ‘weak links’ ? in production chain 
AFYVE  (Asociacion 
Fonografica y Videográfica 
Española) 
BAMP  (Bulgarian Association 
of the Music Producers) 
BPI (British Phonographic 
Industry) 
Croation Phonographic 
Association 
EMI Music 
FGPA (Lithuania) 
FIMI (Italian Federation of the 
Music Industry) 
GIART  (International  
 
 
  
 
  
 
95 yrs - countries with significant markets have already ex tended protection: India (60), Turkey, Chile, Brazil 
(70), Mexico (75), USA (95 if published, 120 from fixation if not published); Singapore and Australia have signed Free Trade Agreements with the US to extend protection to 70 years 
- producers need longer to recoup investment 
- lifespans increased - cost of producing & marketing original material increased 
- losses due to piracy reduced recoup on investment 
- present famous artists still alive seeing their recordings fall into pub lic domain – unfair + not in line 
with objectives of protection 
- differences in term between EU and US cause legal uncertainty, and lead to infringements 
- especially problematical in on-line enviro nment (where a phonogram can be exploited 
simultaneously in many different countries) 
- different terms could hamper development of new legitimate on-line business models 
- longer term of protection gives incentive for RH to create and disseminate works in that territory 
- longer term indicative of commitment to prot ect RH, local culture & creativity in general 
- lower term of protection in EU difficult for RH to meet foreign competition and obtain adequate international protection (“comparison of terms”). 
 
EN 51   EN Organisation of Performing 
Artists) 
GVL (Gesellschaft zur 
Verwertung von 
Leistungsschutzrechten) 
IFPI and its national groups 
(Austria, Belgium, Czech 
Republic, Denmark, 
Germany, Finland, Greece, 
Hungary, Slovakia, Sweden, 
Poland [ZPAV]) 
LaMPA (Latvian Music 
Producers Association) 
NVPI  (Dutch Music Industry) 
PPL & VPL 
UPFR  (Romanian Association 
of Music Producers)  - discrimination with film producers who are considered as authors 
 
RICHARD , Sir Cliff 
 Extension 
(for at least the lifetime of 
the artists) - present famous artists still alive seeing their recordings fall into pub lic domain – unfair + not in line 
with objectives of protection 
- matter of protecting European culture 
(ARTIS – GEIE 
BECTU 
IMMF (International Music 
Managers Forum) ) - should align with the term applicable to films  
Music Manager’s Forum 
 
  
  
 
 
Extension  
(same as authors) 
 - unacceptable that compositions shou ld enjoy a term of protection up to three times longer than that 
for performances; no justification for such discrima tory treatment (the reason is entirely historical) 
- the argument that a shorter term of protection benefits consumers is not borne out in practice since 
phonogram producers continue to sell recordings that are in the public domain at the same price as 
when they were protected by copyright - an extension of sound recording copyright will also take thousands of musicians off means tested 
benefits and greatly lessen the burden of the state; the state will benefit both from the a reduction in 
benefits paid to poor musicians and from incr eased taxation of rich musicians and phonogram 
producers 
 
EN 52   EN  
AZNAVOUR, Charles - recordings are principal source of income. 
- internet possibilities are competition to sales of CDs 
- internet use of recordings in public domain are unfair competition to recent recordings 
ESDA  (European Sound 
Directors’ Association) - Urgent consideration should be given to changing the term of copyright in sound recordings to 
safeguard the revenues of European produced sound recordings that would otherwise be due to 
producers and performers  
- concerned that any adjustment of the term of protection of phonograms applies a parallel extension to the performers’ rights to equitable remuneration 
Music Business Forum 
  
 
  
 
 
Extension 
 
- It promotes entrepreneurship in the creative econom y, a sector of increasing importance for the UK’s 
international competitiveness, and benefits consumer s by generating innovation and investment in new 
British music 
- An appropriate duration of copyright for performa nces and sound recordings is fundamental to the 
ability of the music sector in Britain to continue to take a leading role, culturally and economically, on the international stage 
ASLIB (Association for 
Information Management) 
LACA  (Libraries and archives 
copyright alliance) 
McLean, Wallace 
SCONUL (Society of College, 
National and University 
Libraries)   
 
  
 
 
NO extension 
 
  
 
  
 
  
 
 
 
 Actually talk about author’s rights….(but can presume same for related rights) 
 
 
EN 53   EN ARD / ZDF 
BAK  (Bundesarbeitskammer) 
BEUC  (European Consumers’ 
Organisation) 
Naxos  
PEARLE (Performing Arts 
Employers Associations League 
Europe) 
Publishers Association UK 
S., Christiano 
Schaefer, Franz 
STM (International Association 
of Scientific, Technical and 
Medical Publishers) 
Wirtschaftskammer Austria -IP Content should be available for public – Art 11 and Art 17 EU Charter of Fundamental Rights 
(Freedom of expression and information & Right to Property) 
- Good balance of interests already found in 1993 - Too soon to re-open debate and extend again 
- Music will disappear in archives 
- Only “top seller” works will be produced for economic reasons - US protects especially  producer industry. 
- Further extension will benefit producers and not ar tists. New creative impulse would be hindered, not 
encouraged. - most artists that would be affected of an extens ion are either no longer recording or have deceased 
and will not therefore be motivated to make new reco rdings just because copyright extension has been 
granted to them 
- The effect of extending the copyright period woul d diminish the availability of a broad range of 
music at an affordable price 
BSAC  (British Screen Advisory 
Council) 
Law Society of Scotland   
CRID (Centre de Recherches 
Informatique et Droit) - US legal regime of copyright does not know the notion of a related right in the musical sector (the 
95-yrs-term of protection for musical works applies to copyright in sound recordings and not to a 
related right in music productions) - the extension of the duration of copyright in the US was based on the will to align the term of 
protection to that of the EU (some specific provisions of the US copyright regime – e.g. works made 
for hire, sound recordings – required another way of calculating the duration than the death of the author) 
EDRI (European Digital 
Rights) 
FIPR (Foundation for  
 
  
 
  
NO extension 
 
- extension would diminish the choice of music on the market in Europe and undermine reprint 
houses, depriving them of income they now earn lawfully by republishing out-of-copyright works; and 
it is not possible to motivate d ead authors to create new works 
- a “use it or lose it”-clause should be introduced into copyright law: if a work has been unavailable to 
 
EN 54   EN Information Policy Research) 
VOSN  (Foundation for Open 
Source, Netherlands) 
EFFI  (Electronic Frontier 
Finland) the public for three yrs the creator should be able to reclaim the copyright from the publisher; if the 
creator does not exercise this right, then, after a further two yrs, the copyright should expire and the 
work should fall into the public domain 
EICTA (European Industry 
Association) 
Intellect 
Nokia corporation 
TMPDF  (Trade Marks, Patents 
& Designs Federation)  Term of protection is part of the balance between interested parties which in this field includes not just 
the producers of the sound recording and the public but also would have impact on balance between owners of copyrights and right owners of related rights 
- a change in the term of protection would undoubtedly be argued to impact the question of fair 
compensation (“levies”) for private copying, which would serve to further exacerbate current problems with levies as applied in some MS 
Foundation for a Free 
Information Infrastructure - lack of economic rationale: the expansion mechan ism does not provide a long time perspective on 
which the market can trust; an ex-post prolongation would not provide any incentive for businesses as only historic works are covered that are already there (only the RH of expiration candidates would 
benefit) 
- public domain creates a lot of opportunities for businesses to make profit from recycling old works - trust in legislation would be undermined 
- prolongation in the US is often regarded as an example of political failure 
National Consumer Council - it remains unclear how an extension meaningfully adds to the incentives to produce new works to 
justify the loss of public benefit - there can be little justification for exte nding the term merely because the US has 
Wind Telecomunicazioni 
S.p.A. - suggests a system of (ex ante) compulsory licen sing and (ex post) determination of the appropriate 
consideration thereof, according to fair and reasonable criteria by independent third parties 
- favours reduction of copyright term 
 
EN 55   EN 2. R ETROACTIVITY  
For both options concerning term extens ion, the issue of when the term 
extension should apply (either  retroactively or not) has to be considered. There 
are different degrees of re troactivity that can be c hosen in providing a term 
extension.  
– If one applied the term extension only to new recordings , created after the entry into 
force of the amended Term Directive, one could perhaps imagine that performers would be stimulated to increase their cr eative activity. Moreover, the real financial 
benefit for the extra protection would be f ound far into the future, although could be 
accounted for as net present value in th e short term. Extending the term for new 
performances and recordings only is a simple solution, but does not provide any 
immediate relief to the problems identified earli er in this impact assessment. It is for 
this reason that it is not of interest to performer representatives and is excluded from 
further detailed analysis.
  
– A partially retroactive  term extension would provide supplementary revenue for 
existing recordings  that soon to fall into the public domain . This is the sort of 
extension that is of greater interest to related rights holders because the financial 
advantages would be felt in the ne ar term, especially for recordings  that are from the 
50's and 60's. This is the approach used in  Directive 2001/29/EC in its Article 10. This 
means that the extension would apply to all sound recordings which were still protected on the date of adoption (or comi ng into force) of the amended Directive
122.  
– Full retro-active  extension covers all recordings which are unde r protection as if the 
extended term had applied as from the start of protection. In other words, it would be 
as though the recording was protected fo r 95 years when it was produced. This 
solution generates the maximum value for ri ght holders, but requires a mechanism to 
compensate for the revival of rights and to exonerate users of music which was no longer protected under the old term but is protected again under the new term. The problem of revival of rights arose after th e adoption of the Term  Directive in 1993. A 
case was brought to the European Court of Ju stice (the Butterfly Case – see footnote 
106) to clarify what would be a reasonable time to allow for third parties to continue 
selling reissues of public domain material when the rights had revived and therefore 
returned to the origin al copyright holder. 
 New acts only Partially ret ro-active Fully retro-active 
Advantages Simple Simple Maximum value for 
right holders 
Disadvantages No immediate benefit 
to right holders Immediate benefit to 
many right holders Complicated 
Risk of legal uncertainty 
Table 1A: Impacts of retroactive extension 
                                                 
122 This will avoid the problem that arose with acqui red rights on recordings which had fallen out of 
protection before the amended Term Directive entered into force on 1 July 1995, but which were 
eligible for the extended term and resulted in a legal dispute at the ECJ. (Case C-60/98, Butterfly 
Music v CEMED , judgement of 29 June 1999). 
 
EN 56   EN It appears that a partially retro-active extensi on, with a specific cut off date, would be the 
simplest solution as regards the legal and administrative aspects and would bring the 
most benefit to right holders from the start. 
3. I MPACT OF 45 YEAR TERM EXTENSION : METHODOLOGY  
This section explains the me thodology employed to quantify th e impact of a 45 year term 
extension on performers and record produc ers. The estimation is based on the PWC 
study, which is the only study that is based on ac tual historical data . Other studies would 
lead to different estimates. 
Because the PWC study is based on actual data, it  enables us to add a concrete dimension 
to the results. This study applies to the UK a nd it analyses the revenu es from music sales, 
licence fee income and other royalty income. Th e value of the initial 50 year term for 
sales in the UK is calculated  to reach £ 8.568 billion. Th e high-end estimate of total 
present value of the 95-year period would amount to £ 8.731 billion, whereas the low-end 
estimate would yield £ 8.576 billion.123 A 45 year extension of  the term of protection 
would create between £ 8.5 million and £ 163 million in additional revenues.124  
The PWC study is limited to the UK sales revenue. As EU sale s are 3.5 times larger than 
the UK sales125, it can be roughly estimated that a 45 year term extension would generate 
between € 44 million and € 843 million in additional revenues for the EU.126  
The additional income, however, will not be ev enly spread over the additional period of 
the 45 years. Different assumptions of the di stribution of income ha ve been taken into 
account. This impact assessment is based on calculations provide d by the PWC study 
which states that the financial benefit that  will accrue to the UK music industry in the 
first ten years amounts to between £ 2.2 and £ 35 million. Again, this benefit could be approximated to a financial benefit of between € 11.4 million and € 181 million in 
Europe in the first ten years.  
Furthermore, the estimates provided by th e PWC apply to the music industry (i.e. 
performers and record producers together). In order to determine the impact of a 45 year 
term extension on individual performers, it mu st first be determined how much of the 
additional income would accrue to performers as opposed to record producers. The CIPIL study assumes that performers obt ain a 5-15% share from sales of sound 
recordings. We take the average value of 10%  to estimate the performers' share of sales 
revenue. The sum of € 44 to € 843 million is therefore distributed as follows:  
– Performers obtain a present value of between € 4 million and € 84 million during the 
extended term, whereas record producers obtain a present value of between € 39 
million and € 758 million.  
                                                
 
123 The higher range estimate assumes, in favour of the proponents of term extension, that the expiry 
of copyright entails a 100% market share loss, whereas the lower end estimate assumes no market 
loss.  
124 The low-end estimate assumes the loss of mark et share of 0%, whereas the high-end estimate 
assumes the loss of market share of 100%.  
125 IFPI, 2007. 
126 2006 exchange rate EUR/GBP. IFPI, 2007. 
 
EN 57   EN – In the first decade, performers would get between € 1.1 million and € 18 million, 
whereas record producers would get be tween € 10.2 million and € 163 million.  
To determine what, on average, this implies for an individual performer, the number of 
performers benefiting from the additional re venue must be estimated. The UK House of 
Commons Culture, Media and S port Committee report provides an estimate. It concludes 
that, over the next te n year, over 7000 performers would lose protection if the term was 
not extended127. This means that if we extrap olate the UK estimate to the EU, 
approximately 24500 performers would lose prot ection in the first decade. By dividing 
the financial benefits for performers  (€ 1.1 million and € 18 million) by 24500 
performers, the average additional benefit per performer ranges from € 46 and € 737. 
The average additional benefit per performers  would increase if the effects of a fund 
proposed in sub-option 2b would be factored in. Under this model, 20% of the record 
producers' benefit from term extension would be redistributed to performers. The fund 
would therefore yield between € 7.8 million and € 151.7 million in the whole period and 
between € 2 million and € 32.5 million in the first decade. 
If the fund were set up, the income to perf ormers and record producers would therefore 
have to be redistributed:  
– In the first decade, performers benefit would be increased to between € 3.2 million 
and € 50.6 million; whereas record producer s would obtain between € 8.2 million and 
€ 130.1 million.  
– Average financial benefit to a performe r would yield to between € 130 and € 2065. 
It results from the above that the estab lishment of the fund would increase average 
payments per performers 2.8 times.  
An increase in A&R  spending and a better financial situation of the recording industry 
will therefore provide increased opportunities for performers in both popular and niche 
repertoire. According to the PWC stu dy, A&R amounts to 17% of revenues.  
– If the estimated financial benefit of the record producers is between € 39 million and € 
758.5 million, this results in the additional A&R value of between € 6.7 million and € 129 million. If, however, a fund diverting 20%  of record producers' additional revenue 
to performers were set up, record companies' additional revenue would be between € 31.3 million and € 607 million, which would re sult in the additional A&R value of 
between € 5.3 million and € 103 million. 
– In the first decade, the additional A&R value would be between € 1.7 million and € 
27.6 million. If, however, a fund diverting 20% of record producers' additional 
revenue to performers were set up, the additional A&R value would be between € 1.4 million and € 22.1 million.  
– Part of this additional investment will  benefit directly new EU performers. 
                                                
 
127 UK House of Commons Committee for Culture, Media and Sport, May 2007. 
 
EN 58   EN WHOLE PERIOD UK (million £) EU (million €) Benefit 
without fund 
(million €) A&R / average 
(without fund) 
(million €) Fund 
(million €) Benefit with 
fund 
(million €) A&R / average 
(with fund) 
(million €) 
Record producers 758.5 A&R  128.9 606.8 A&R  103.2 Loss of market 
share of 100% Performers 162.8 842.7 
84.3 avg / 151.7 
 236.0 avg / 
Record producers 666.7 A&R 113.3 533.3 A&R 90.7 Loss of market 
share of 50% Performers 143.1 740.8 
74.1 avg / 133.3 
 207.4 avg / 
Record producers 39.1 A&R 6.7 31.3 A&R 5.3 Loss of market 
share of 0% Performers 8.4 43.5 
4.3 avg / 7.8 12.2 avg / 
FIRST TEN YEARS UK (million £) EU (million €) Benefit 
without fund 
(million €) A&R / average 
(without fund) 
(million €) Fund 
(million €) Benefit with 
fund 
(million €) A&R / average 
(with fund) 
(million €) 
Record producers 162.6 A&R  27.6 130.1 A&R  22.1 Loss of market 
share of 100% Performers 34.9 180.7 
18.1 avg 737.4 32.5 
 50.6 avg 2064.7 
Record producers 127.2 A&R 21.6 101.7 A&R 17.3 Loss of market 
share of 50% Performers 27.3 141.3 
14.1 avg 576.8 25.4 
 39.6 avg 1615.1 
Record producers 10.2 A&R 1.7 8.2 A&R 1.4 Loss of market 
share of 0% Performers 2.2 11.4 
1.1 avg 46.5 2.0 3.2 avg 130.2 
avg = average 
Table 2A: Impacts on perfor mers and record producers  
 
EN 59   EN 4. R OYALTY FLOWS BETWEEN THE EU AND THE US FOR SECONDARY 
EXPLOITATION OF PHONOGRAMS UNDER INTERNATIONAL AGREEMENTS  
The main international conventions for th e protection of phonograms are the 1961 Rome 
Convention for the protection of performe rs, producers of phonograms and broadcasting 
organisations, and the WIPO Performances and Phonograms Treaty. The EC is party 
only to the WPPT but has not ye t ratified. The U.S. is also  party to the WPPT but has 
ratified. All EU Member States ar e parties to the Rome Convention. 
4.1. Broadcasting and communication to  the public of 'US phonograms' 
4.1.1. Under the Rome Convention The Rome Convention provides that broad casting and communication to the public of 
phonograms gives rise to the payment of a sing le equitable remuneration to the producers 
or performers or both (Article 12). Alt hough the US is not a party to the Rome 
Convention, it can still benefit from pr otection under the Conve ntion, because in 
principle Contracting Parties to the Convention apply the so -called 'national treatment' 
principle to performers and producers. This means that in a Contracting Party certain 
producers and performers who are not nationals of  that state should be treated in the same 
way as nationals, i.e. gr anted the same rights. 
The Rome Convention provides cr iteria (so-called 'points of  attachment') to establish 
which record producers and performers are enti tled to national treatment. Under Article 5 
of the Convention, producers
 are protected if they are nati onals of a Contracting State to 
the Convention ( 'nationality criteria '), or if the sound was fixed in the record in another 
Contracting State ( 'fixation criteria' ), or if the phonogram was first published in another 
contracting state ( 'publication criteria' ). This would not cover US records. However, 
under Article 5(2), if a phonogram is published fi rst in a non-contracting state, such as 
the US, and published within 30 days in anothe r contracting state, su ch as the UK, it will 
be eligible for national treatment ( 'simultaneous publication' ). In that situation, by virtue 
of article 4 of the Convention, the performer  whose performance is recorded will also be 
eligible for protection under the Convention. This means it is possible for records 
produced by a US company, recorded in the US  and by US artists, published first in the 
US but published in the UK or another State which is party to the Convention within 30 
days, to enjoy protection under the Convention in all the contracting states, i.e. in effect 
in all EU Member States. 
However, Contracting Partie s to the Rome Convention may limit the application of 
certain criteria by way of notification under Artic le 5(3). Parties may decide not to apply 
either the 'publication criteria'  or the 'fixation criteria'  to determine whether a producer 
(and indirectly, a performer) is eligible for national treatment. If a State retains only the 
fixation criteria, 'simultaneous publication'  will no longer qualify a US phonogram for 
protection under the Convention. This is the case in the following EU Member States: 
Belgium, Denmark, Estonia, Finland, Fran ce, Italy, Luxemburg, Poland, Slovenia and 
Spain. As a result, these EU Member States will not apply the Rome Convention and will 
not grant a reproduction right or a right to single equita ble remuneration to phonograms 
produced by a US producer, or fist fixed in the US .  
 
EN 60   EN Moreover, under Article 16(1)(a),  States may decide to not a pply or limit the effect of 
Article 12 of the Convention (single equitabl e remuneration). Possible limitations include 
not applying equitable remuneration to phonograms the producer of which is not a 
national of another Contracting State. This reservation has been notified by the following 
EU Member States: Austria, Belgium, Bulgaria , Estonia, France, Italy, Lithuania, Latvia, 
Netherlands, Czech Republic, Romania, UK, Slovakia and Spain. As a result of those 
exemptions, these Member States will not apply equitable remuneration to phonograms 
produced by a US record producer . 
4.1.2. Under the WPPT 
The WPPT is currently in force in the US  and in several EU Member States, i.e. 
Belgium, Cyprus, the Czech Republic, Hungary, Latvia, Lithuania, Poland and Romania. The EC is due to ratify the WPPT.  
The WPPT provides for a right to equi table remuneration for broadcasting and 
communication to the public of works
128. It also applies the principle of national 
treatment to certain pr oducers and performers. The notifi cations made under Article 5(3) 
of the Rome Convention may be notified also  under the WPPT, thus allowing Parties to 
choose a first publication or first fixation criter ia for eligibility for national treatment. It 
is generally understood that EU Member States  will be free to make such notifications 
even after ratification of the WPPT by the EC. However, these reservations lose their significance regarding th e US, which is a party to W PPT. Phonograms produced by a US 
producers will in any case be entitled  to national treatment under the WPPT . 
However, the US has notified reservations in relation to single equitable remuneration 
under Article 15(3). The US reservation reads as follows: "the United States will apply 
the provisions of Article 15(1) of the WI PO Performances and Phonograms Treaty only 
in respect of certain acts of broadcasti ng and communication to the public by digital 
means for which a direct or indirect f ee is charged for reception, and for other 
retransmissions and digital phonorecord delive ries, as provided under the United States 
law". This means that in effect, the US doe s not apply single equitable remuneration for 
broadcasting and communications to the public.  
Due to the US reservation, other parties to the WPPT are entitled not to apply national 
treatment to US nationals (Article 4(2)).  Under WPPT, EU Memb er States would not 
have to provide that US companies rece ive single equitable remuneration for the 
broadcasting and communication to the pub lic of phonograms produced by US producers 
and recorded by US performers. They w ould have to protect US produced phonograms 
only in relation to certain acts of broadcasting and co mmunication to the public as 
provided under US law. 
However, phonograms produced by a US produ cer would still be entitled to national 
treatment in other respects, i.e. in relation to the rights of repr oduction, dist ribution, 
rental and making available.  
                                                 
128 Under the WPPT, Performers and producers enjoy rights of reproduction, distribution, rental, and 
making available. 
 
EN 61   EN 4.2. Protection of 'EU phonograms' in the US 
Under US Law, sound recordings  enjoy copyright protection129. Sound recordings are 
protected by law provided that th e author is a US or 'treaty pa rty', that the work was first 
published in the US or a 'treaty party', or  fixed by a national of a 'treaty party'130. In other 
words, a record produced by an EU record pr oducer, first published in the EU or first 
fixed in the EU qualifies for protection in the US. 
Term of protection:  The author and of a sound record ing is the person who creates it by 
fixing it in a copy or phonorecord for the firs t time. Although the author is the initial 
owner of a copyright, it seems sound record ings generally qualify as works made for 
hire131 (at any rate they are usually registered as such with the US Copyright Office), and 
thus enjoy a term of protection of 95 years from creation132. Under US law, works 
created after January 1st 1978 are protected, as long as the work qualifies under section 
104 of the US Copyright Act. Thus US does not apply a comparison of terms. 
Rights in sound recordings:  the copyright in a sound record ing entitles the owner to the 
rights of reproduction, distributi on, rental, lending, the righ t to make derivative works 
and the right to perform the copyrighted work publicly by means of a digital audio 
transmission133. The copyright owner does not have th e right to authoris e performance of 
the sound recording publically, i.e. to authorise broadcas ting and communication to the 
public, other than 'digital audio transmissi ons'. The right to au thorise digital audio 
transmissions covers essentially webcasting a nd digital subscription se rvices. In addition, 
where the transmission is not  interactive, the consent of th e owner of the copyright in the 
sound recording is not required. Instead, use of the sound recordin g is subject to a 
statutory licence. Payments under the stat utory licence are divi ded between producers 
and performers on a 50-50 basis. 
Rights of performers:  Performers are not the initial ow ners of the copyright (i.e. they 
don’t undertake to fix the record and they might  be subject to work for hire) in a sound 
recording. They enjoy very limited rights (in addition to the share of the revenues from 
the statutory licence for non interactive web casting). The protection of performers is 
essentially limited to a pr otection against bootlegging an d trafficking in bootlegged 
recordings, see 17 U.S.C. 1101. 
                                                 
129 17 U.S.C. 102(7) refers to 'sound recordings', which are defined in section 101 as 'works that 
result from the fixation of a series of musical, spoken, or other sounds, but not including the 
sounds accompanying a motion picture or other audiovisual work'. 
130 17 U.S.C. 104. 'Treaty party' refers inter alia  to parties to WTO and WPPT.  
131 17 U.S.C. 201(b). 
132 17 U.S.C. 302(c). 
133 17 U.S.C. 114(a) and 106.