Proposal for a European Parliament AND Council Directive amending Directive 2006/116/EC of the European Parliament and of the Council on the term of protection of copyright and related rights {SEC(2008) 2287} {SEC(2008) 2288}
Date: 2008-07-16
Institutions: European Commission
Subjects: approximation of laws, copyright

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.7.2008 
COM(2008) 464 final 

2008/0157 (COD) 

Proposal for a 

EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE 

amending Directive 2006/116/EC of the European Parliament and of the Council on the 
term of protection of copyright and related rights 

{SEC(2008) 2287} 
{SEC(2008) 2288} 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

The  proposal  aims  to  improve  the  social  situation  of  performers,  and  in  particular  sessions 
musicians, taking into account that performers are increasingly outliving the existing 50 year 
period of protection for their performances.  

The large scale production of phonograms is essentially a phenomenon that commenced in the 
1950s.  If  nothing  is  done,  over  the  next  10  years  an  increasing  amount  of  performances 
recorded  and  released  between  1957  and  1967  will  lose  protection.  Once  their  performance 
fixed  in  a  phonogram  is  no  longer  protected,  around  7000  performers  in  any  of  the  big 
Member States and a correspondingly smaller number in the smaller Member States will lose 
all of their income that derives from contractual royalties and statutory remuneration claims 
from broadcasting and public communication of their performances in bars and discotheques.  

This  affects  featured  performers  (those  who  receive  contractual  royalties)  but  especially  the 
thousands of anonymous session musicians (those who do not receive royalties and rely solely 
on statutory remuneration claims) who contributed to phonograms in the late fifties and sixties 
and have assigned their exclusive rights to the phonogram producer against a flat fee payment 
('buy  out').  Their 
for  broadcasting  and 
communication  to  the  public,  which  are  never  assigned  to  the  phonogram  producer,  would 
cease.  

remuneration'  payments 

'single  equitable 

In  addition,  the  proposal  also  seeks  to  introduce  a  uniform  way  of  calculating  the  term  of 
protection that applies to a musical composition with words which contains the contributions 
of  several  authors.  For  example,  a  musical  piece,  for  instance  pop  music  or  an  opera,  often 
includes lyrics (or a libretto) and a musical score. In different Member States, such co-written 
musical compositions are either classified as a single work of joint authorship with a unitary 
term  of  protection,  running  from  the  death  of  the  last  surviving  co-author  or  as  separate 
works with separate terms running from the death of each contributing author.  
This means that in some Member States1, a musical composition with words will be protected 
until  70  years  after  the  last  contributing  author  dies,  while  in  other  Member  States2,  each 
contribution will lose protection 70 years after its author dies. These discrepancies in term that 
apply to one musical composition lead to difficulties in administering copyright in co-written 
works  across  the  Community.  It  also  leads  to  difficulties  in  cross-border  distribution  of 
royalties for exploitation that occurs in different Member States.  

•  General context 

The social situation of performers  

The  current  employment  status  and  conditions  for  the  average  European  performer  are  not 
very rewarding. Only famous performers, so-called featured artists that have signed a royalty-
bearing contract with a major record label, are able to make a living from their profession. For 
instance, in the UK, in 2001, only 5% of performers earned over £10000 annually. Moreover, 
between  77  and  89.5%  of  all  income  distributed  to  performers  goes  to  the  top  20%  of 

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Belgium,  Bulgaria,  Estonia,  France,  Greece,  Italy  (for  operas),  Latvia,  Lithuania,  Portugal,  Spain, 
Slovakia. 
Austria,  Cyprus,  Czech  Republic,  Denmark,  Germany,  Finland,  Hungary,  Ireland,  Italy  (except  for 
operas), Luxembourg, Malta, the Netherlands, Poland, Romania, Slovenia, Sweden, and the UK. 

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performers3. Economists have shown that the great discrepancies between the low earning of 
the majority of little-known performers and the significant earnings of "superstar" performers 
are endemic to the music industry4.  

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 incomes5. Overall, 
only 5% of performers actually make a living from their profession  – all the others have to 
seek parallel employment.  

Performers usually transfer their most economically significant exclusive copyrights to record 
companies  via  contract.  In  most  cases,  individual  performers  have  little  bargaining  power6. 
When  signing  a  contract  with  a  phonogram  producer,  performers  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 
difficult  for  performers  to  negotiate  which  type  of  contract  or  which  level  of  remuneration 
they will obtain. Session musicians, i.e., musicians that are hired on an ad hoc basis to play 
for  a  recording  'session',  cannot  negotiate  at  all,  they  have  to  transfer  their  copyrights  'in 
perpetuity' against a one off payment.  

Contractual  relations  between  record  companies  and  performing  artists  vary  greatly  but 
typically fall into two categories:7 

•  Session artists are generally paid a flat fee as their exclusive copyrights are bought out by 
the  producer.  Accordingly,  their  remuneration  does  not  increase  if  the  record  becomes  a 
huge success.  

•  Featured artists' contracts usually provide for a royalty-based remuneration. Depending on 
their  fame  and  bargaining  power,  performers  usually  receive  net  royalties  of  5-15%  of 
revenues8. 

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 documents9. In practice, after the 
various  contractual  deductions  (for  costs  borne  by  the  producers  such  as  music  videos, 
promotion, master costs), the average percentage of royalties actually received by performers 
can be lower. Moreover, as most performers' sound recordings do not sell enough copies for 

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AEPO study – "Performers' Rights in European Legislation: Situation and Elements for Improvement.", 
July 2007, p. 89 
For  a  survey  of  economic  "superstar  theories",  see  R.  Towse,  "Creativity,  Incentive  and  Reward" 
(2000), pp. 99-108. 
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. 
In  several  instances  courts  have  intervened  to  cast  aside  excessively  harsh  agreements,  noting  in 
particular  the  "immense  inequality  in  bargaining  power,  negotiation  ability,  understanding  and 
representation"  between  artists  and  professionals  of  the  entertainment  industries",  Silvertone  Records 
Limited v. Mountfield and Others, [1993] EMLR 152. 
Adapted from contribution from Naxos to Commission questionnaire – May 2006. 
CIPIL Study, p.36. 
This  has  led  courts  to  conclude  that  artists  such  as  the  "Stone  Roses"  rock  band  or  Elton  John  were 
insufficiently  aware  of  the  sometimes  excessive  deductions  operated  from  the  basis  for  calculating 
royalties, see Silvertone Records Limited v. Mountfield and Others, [1993] EMLR 152. 

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the record company to recoup its initial investment (only 1 in 8 CDs is profitable)10, royalty 
payments are often not paid out at all. 

However,  performers  also  receive  revenue  from  other  sources.  They  receive  income  from 
collecting  societies  which  administer  so-called  secondary  remuneration  claims.  There  are 
three principal sources: (1) equitable remuneration for broadcasting and communication to the 
public,  (2)  private  copying  levies  and  (3)  equitable  remuneration  for  the  transfer  of  the 
performers' rental right. All of these sources are commonly referred to as 'secondary' sources 
of  income  and  are  paid  to  performers  directly  through  their  collecting  societies.  These 
payments are not affected by their contractual arrangements with the record companies.  

Many  European  performers  (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  royalty  payments  from  record  companies  as  well  as  remuneration  due  for  the 
broadcasting  or  public  performance  of  their  sound  recordings.  For  session  musicians,  who 
play  background  music,  and  lesser  known  artists,  that  means  that  broadcasting  and  public 
performance income decreases when they are at the most vulnerable period of their lives, i.e. 
when they are approaching retirement. Once copyright protection expires, they will also lose 
out on potential revenue when their early performances are sold on the Internet.  

Moreover, when their rights expire performers are exposed to potentially objectionable uses 
of their performance which are harmful to their name or reputation. Performers are also at a 
disadvantage  as  compared  to  authors  whose  works  are  protected  until  70  years  after  their 
death. This could be seen as unfair since performers are nowadays not only just as necessary 
as authors but also more identifiable with the commercial success of a sound recording.  

The economic challenges faced by phonogram producers 

As regards producers of phonograms, the principal challenges they face are the evaporation of 
the CD markets and the insufficient replacement revenue from online sales. The latter is due 
to peer-to-peer piracy. The EU recorded music industry has suffered a decline in record sales: 
sales  of  music  CDs  peaked  in  2000  and  have  been  falling  at  an  average  rate  of  6%  ever 
since11.  Estimates  for  the  future  show  a  continued  decrease  in  physical  album  sales  from 
$12.1bn  in  2006  to  $10.3bn  by  201012.  Since  2001,  the  total  European  market  for  recorded 
music has lost 22% of its value13.  

Revenues in general and profits in particular have decreased, largely due to increased piracy. 
In January 2006 the music trade publication ‘Billboard’ 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. 

Due to losses in revenue, Universal's total number of employees which in 2003 amounted to 
12000 was down to 7600 in 200614. After an initial reduction in employees in 2006, EMI also 

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Comment from IFPI. 
"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. 
Figures from PricewaterhouseCoopers, Financial Times, 6 July 2006. 
Article from the Times, 14 February 2007. 
Interview with IFPI - and John Kennedy - on 29/3/2006 in Copyright Unit of DG MARKT. 

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announced  a  second  reduction  of  2000  jobs  (about  one  third  of  its  work  force)  in  January 
200815. EMI indicated in addition an intention to be more selective with its artist partnerships 
despite  a  significant  reduction  in  its  artist  roster  already  in  200616.  EMI  has  also  been 
reducing its advertising expenditure17. 

In  these  circumstances,  the  European  record  industry  faces  the  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 development of new talent, i.e. to sign new talent, 
promote  untried  talent  and  produce  innovative  recordings.  Therefore,  a  longer  term  of 
protection  would  generate  additional  income  to  help  finance  new  talent  and  would  allow 
record companies to better spread the risk in developing new talent. Due to uncertain returns 
(only  one  in  eight  sound  recordings  is  successful)  and  so-called  'information  asymmetries' 
such revenue is often not available on capital markets. 

Co-written musical works 

Music is overwhelmingly co-written. For example, regarding opera, there are often different 
authors to the music and to the lyrics. Moreover, in musical genres such as jazz, rock and pop 
music, the creative process is often collaborative in nature.  

An analysis of the most popular French songs for the period 1919-2005 shows that 77 % of 
those  songs  are  co-written.  A  similar  analysis  of  the  most  popular  songs  in  the  UK  for  the 
period 1912-2003 shows that 61% of those songs are co-written.18 Regarding newly created 
works, another survey sampling around 2000 newly registered works with SGAE the Spanish 
collective rights management society, in 2005-2006, reveals that over 60% of such works are 
co-written.19  

The opera "Pelléas et Mélisande" illustrates how the different methods of calculating the term 
for  co-written  musical  compositions  results  in  different  terms  of  protection  for  this 
composition  across  different  Member  States.  Debussy,  the  composer,  died  in  1919,  while 
Maeterlinck,  the  librettist,  died  much  later  in  1946.  In  those  Member  States  that  apply  a 
unitary  term  (e.g.,  France,  Portugal,  Spain,  Greece,  Lithuania)  the  entire  opera  remains 
protected  up  to  the  year  2016  (life  of  the  last  surviving  author,  Maeterlinck  plus  seventy 
years). In those countries that consider the music and the libretto as two distinct works (e.g., 
United Kingdom, Netherlands, Austria, Poland, Slovenia) or two works that can be exploited 
separately (e.g., Czech Republic, Hungary, Germany) the protection of the music expired in 
1989 while only the words (the libretto) remain protected until 2016.  
Other examples include: Johann Strauss' operetta 'The Gipsy Baron'20; the song 'Fascination 
(Love in the afternoon)', music by Fermo D. Marchetti (died 1940) and lyrics by Maurice de 
Féraudy (died 1932); the song 'When Irish Eyes Are Smiling', music by Ernest R. Ball (died 
1927) and lyrics by Chauncey Olcott (died 1932) and George Graff, Jr. (died 1973).  

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International Herald Tribune, The Associated Press, January 14, 2008 
EMI response to Gowers Review, 2006. EMI's workforce was reduced by a third to 6,000 persons. 
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 chain", anonymous report) p. 13.  
Figures provided by the International Confederation of Music Publishers (ICMP). 
GESAC, September 2006. 
Johann Strauss died in 1899, while one of the authors of the libretto, Leo Stein, died in 1921. The music 
was in the public domain in Germany in 1929, while the text was protected until 1991. In Belgium, the 
entire operetta was protected until 1981, and in Italy, until the end of 1977. 

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In the latter example, in those Member States that apply a unitary term, the entire song "When 
Irish  eyes  are  smiling"  would  be  protected  until  2043.  In  those  countries  that  consider  the 
music and the lyrics as distinct works or apt for separate exploitation, the protection for the 
music expired in 1997 while only the lyrics would be protected until 2043.  

•  Existing provisions in the area of the proposal 

The  terms  of  protection  for  copyright  and  related  rights  were  harmonised  by  Directive 
93/98/EEC which was subsequently codified by Directive 2006/116/EC. The codification did 
not entail any substantive changes to the Directive. The term of protection for performers and 
phonogram producers is set out at 50 years after publication in these Directives whereas the 
current  proposal  would  extend  that  protection  to  95  years  after  publication.  The  current 
Directive contains no specific rules on co-written musical compositions with words.  

•  Consistency with the other policies and objectives of the Union 

This proposal is in line with the objectives of the EU to promote social welfare and inclusion. 
Performers,  and  especially  session  musicians,  are  among  the  poorest  earners  in  Europe, 
despite their considerable contribution to Europe's vibrant cultural diversity. In addition, the 
sound record industry that promotes European performers and produces in European studios 
faces  significant  challenges  which  undermine  its  competitiveness:  rampant  online  piracy  in 
many parts of the Community has lead to significant losses. The ability of the music industry 
to finance new talent and adapt to dematerialised distribution appears severely undermined.  

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Consultation methods, main sectors targeted and general profile of respondents 

In the context of the Review of the EC legal framework in the field of copyright and related 
rights, a Commission Staff Working Paper was published on 19 July 2004. Interested parties 
were  invited  to  submit  their  comments  by  31  October  2004.  Of  the  139  contributions 
received,  76  position  papers  commented  on  Directive  93/98/EC  harmonising  the  term  of 
protection of copyright and certain related rights. 

During  2006-2007,  Commission  services  had  meetings  with  a  variety  of  stakeholders  on  a 
bilateral basis to discuss relevant issues in more detail. A questionnaire was prepared by the 
Commission  and  distributed  to  major  stakeholders  in  the  framework  of  these  bilateral 
discussions. More or less detailed responses were received from performers' associations and 
the recording industry. 

Summary of responses and how they have been taken into account 

Responses  in  favour  of  term  extension  came  from  performers'  associations,  the  recording 
industry, collecting societies, music publishers, performing artists and music managers. Those 
against  term  extension  were  telecoms,  libraries,  consumers  and  public  domain  companies. 
The arguments of those against term extension were addressed in the analysis of impacts of 
the various options. 

•  Collection and use of expertise 

There was no need for external expertise.  

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•  Impact assessment 

The  impact  assessment  (available  at  http://ec.europa.eu/internal_market/copyright/term-
protection/term-protection_en.htm)  presents  a  total  of  seven  options  and  discusses  six  of 
them. The options analysed were: (1) do nothing, (2) extend the term of protection to 'life or 
50 years' for performers only, (3) extend the term of protection to 95 years for performers and 
phonogram producers, (4) promote performers' moral rights, (5) introduce a 'use it or lose it' 
clause in sound recording contracts and (6) establish a fund dedicated to session musicians. 

All options are assessed against the following six operational objectives: (1) gradually align 
authors'  and  performers'  protection;  (2)  incrementally  increase  the  remuneration  of 
performers;  (3)  diminish  the  discrepancies  in  protection  between  the  EU  and  US;  (4) 
incrementally  increase  A&R  resources,  i.e.,  the  development  of  new  talent;  (5)  ensure 
availability  of  music  at  reasonable  prices;  and  (6)  encourage  digitisation  of  back  catalogue. 
The IA concludes that 'doing nothing' is not an advisable option. If nothing is done, thousands 
of  European  performers  whose  performances  were  recorded  in  the  late  fifties  and  sixties 
would lose all of their contractual royalty income or statutory remuneration for broadcasting 
and communication to the public 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. Production might have to be tailored to US 
tastes where a longer term of protection prevails.  

The  IA  considers  the  impact  of  options  not  involving  the  term  of  performers'  and  record 
producers' rights (Options 3a, b, c and d).  

Option  3a  (unwaivable  right  to  equitable  remuneration  for  online  sales)  appears  promising, 
but  at  this  stage  premature.  It  is  unclear  who  would  pay  for  this  additional  statutory 
remuneration claim and it is hard to estimate the financial benefit it would bring. Option 3b 
(the  strengthening  of  moral  rights),  has  no  financial  impact  on  performers  and  record 
producers and would thus not make an incremental contribution to performers' remuneration. 
Option 3c, the 'use it or lose it' clause, would be beneficial to performers by allowing them to 
make  sure  their  performances  are  available  on  the  market.  This  could  positively  impact  on 
their  remuneration  and  also  foster  availability  of  previously  unused  repertoire.  On  the  other 
hand,  this  option,  if  applied  in  isolation,  might  be  considered  as  an  undue  regulatory 
interference  in  the  sanctity  of  ongoing  contracts.  Option  3d,  the  fund  to  be  set  up  by 
phonogram  producers,  would  be  very  beneficial  for  session  musicians  who  transferred  all 
their  exclusive  rights  as  part  of  their  initial  'buy  out'  contracts.  Record  producers,  however, 
would have to set aside at least 20% of the additional revenue generated by the sale of those 
phonograms  they  choose  to  commercially  exploit  during  the  term  extension.  The  impact 
assessment does show, however, that the expected profits in the extended term would suffice 
to finance the 20% set aside in favour of session musicians (see below).  

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  financial  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 performer, would contribute to aligning the legal 
protection  of  performers  and  authors.  It  would  reflect  the  personal  nature  of  performers' 
artistic  contributions  and  recognise  that  performers  are  as  essential  as  authors  to  bringing 
music to the public. It would also allow performers to object to derogatory uses of their works 
during  their  lifetime.  But  linking the  term  of  protection  to  the lifetime  of  performers  would 
create complex situations when a sound track comprises contributions by several performers. 
Rules would then need to be established on how to determine whose death triggers the term of 

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protection. This would be, as the continued uncertainty on the term applicable to co-written 
works demonstrates, entail a significant administrative burden. In addition, Option 2a would 
not increase the A&R resources available to record producers. 

Option  2b  would  increase  the  pool  of  A&R  resources  available  to  phonogram  record 
producers and could thus have an additional positive impact on cultural diversity. The IA also 
demonstrates  that  the  benefits  of  a  term  extension  are  not  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 musicians, are entitled to so-called 'secondary' income sources, such 
as single equitable remuneration when the sound recording incorporating their performances 
is broadcast or performed in public. A term extension would ensure that these income sources 
do not cease during the performer's lifetime. Even incremental increases in income are used 
by performers to buy more time to devote to their artistic careers, and to spend less time on 
part  time  employment.  Moreover,  for  the  thousands  of  anonymous  session  musicians  who 
were at the peak of their careers in the late fifties and sixties, 'single equitable remuneration' 
for  the  broadcasting  of  their  recordings  is  often  the  only  source  of  income  left  from  their 
artistic career.  

In  addition  to  ensuring  the  increased  availability  of  A&R,  option  2b  is  also  easier  to 
implement than option 2a, because it does not link the term of protection to the, sometimes 
very different lifetimes of individual co-performers but to a uniform date, i.e., the publication 
of the phonogram that contains the performance.  

On the other hand, the impact on users would be minimal. This is true in relation to statutory 
remuneration claims and for the sale of CDs:  

•  First, the 'single equitable remuneration' due for broadcasting and performances of music 
in public venues would remain the same as these payments are calculated as a percentage 
of  the  broadcasters  or  other  operators  revenue  (a  parameter  independent  of  how  many 
phonograms are in or out of copyright).  

•  Empirical studies also show that the price of sound recordings that are out of copyright are 
not  lower  than  that  of  sound  recordings  in  copyright.  A  study  by  Price  Waterhouse 
Coopers concluded that there was no systematic difference between prices of in-copyright 
and out-of copyright 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 which are still protected.  

Other studies have been considered 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  books  in-  or  out-of-copyright,  or,  the  impact  of 
copyright  on  the  price  is  extremely  model-dependant  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 say that there is no clear evidence that prices will increase due to term 
extension.  
Overall,  the  extended  term  should  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 resources to fund and develop new talent. In the short to medium 
term,  a  term  extension  provides  record  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.  

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The impact on so-called public domain producers would be minimal. While those companies 
could  that  they  have  to  wait  longer  to  produce  phonograms  in  which  the  performers  and 
phonogram  producers'  rights  have  expired,  the  works  performed  in  a  phonogram  would  not 
lose  protection  once  the  term  of  protection  for  the  phonogram  expires.  This  is  because  the 
work performed on a phonogram remains protected for the life of the author (songwriter and 
composer)  who  wrote  the  work.  As  authors'  rights  last  for  the  life  of  the  songwriter  or  the 
composer  plus  seventy  years,  copyright  protection  for  a  musical  work  can  last  for  between 
140 and 160 years. It is therefore wrong to say that a performance fixed in a phonogram is in 
the 'public domain' once the protection for performers and phonogram producers lapses.  

A  'use  it  or  lose  it'  clause  in  contracts  between  performers  and  their  producer  would  be 
beneficial for performers as it would mean that they would be in a better position to ensure 
their creative output reaches the public, should the phonogram producer decide not to publish 
or otherwise offer older sound phonograms to the public. 

Option  b,  strengthening  and  harmonising  the  moral  rights  of  performers,  would  bring  some 
non-pecuniary benefits to performers, by allowing them to restrict objectionable uses of their 
performances.  However,  the  strengthening  of  moral  rights  has  no  financial  impact  on 
performers  and  record  producers  and  would  thus  not  make  an  incremental  contribution  to 
performers' remuneration.  

The  creation  of  a  fund  for  session  musicians  would  be  beneficial  to  that  group  and  would 
ensure that they are included in the financial benefits of a term extension, which they would 
otherwise  be  largely  excluded  from  under  their  "buy  out"  contracts.  The  fund's  impact  on 
session  musicians  would  be  positive,  as  the  average  performer'  additional  annual  revenues 
during a 45-year term would rise from between € 47 and € 737 to between € 130 and € 2065, 
i.e., would almost triple21.  

The  impact  on  record  producers  would  be  negative,  but  should  be  considered  against  the 
benefits of the term extension. In the course of a 45 year term extension, 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). The IA 
analyses  the  cost  structure  of  a  CD  and  concludes  that  there  will  remain  incentives  for 
producers  to  market  sound  recordings  during  the  extended  term  and  still  make  a  profit  of 
approximately 17%.  

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

The proposal is to extend the term of protection for performers and phonogram producers to 
from  50  years  to  95  years.  In  order  to  achieve  the  right  balance  between  the  benefits  to 
record companies and featured artists and the genuine social needs of sessions musicians, the 
proposal  contains  certain  accompanying  measures  such  as  establishing  a  fund  for  session 
musicians,  introducing  'use  it  or  lose  it'  clauses  in  contracts  between  performers  and 
phonogram producers and a 'clean slate' for contracts in the extended period beyond the initial 
50 years. This proposal would introduce amendments to Directive 2006/116/EC. 

21 

As  the  fund  would  be  drawn  from  the  income  of  record  companies,  the  revenues  of  featured  artists 
would not be adversely affected. The overall impact for performers would thus be positive. 

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•  Legal basis 

Articles 47(2), 55 and 95 of the EC Treaty 

•  Subsidiarity principle 

The  proposal  falls  under  the  exclusive  competence  of  the  Community.  The  reason  why  the 
Community  has  'exclusive  competence'  in  this  area  is  because  the  existing  legislation,  as 
contained  in  Directive  2006/116/EC  (the  Directive)  provides  full  harmonisation.  The 
Directive provides for minimum and maximum harmonisation concurrently. This means that 
Member  States  may  neither  provide  for  shorter  or  for  longer  terms  of  protection  than  those 
prescribed by the Directive (recital 2). The subsidiarity principle therefore does not apply. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

The  above  mentioned  operational  objectives:  (1)  gradually  align  authors'  and  performers' 
protection;  (2)  incrementally  increase  the  remuneration  of  performers;  (3)  diminish  the 
discrepancies  in  protection  between  the  EU  and  US;  (4)  incrementally  increase  A&R 
resources, i.e., the development of new talent; (5) ensure availability of music at reasonable 
prices; and (6) encourage digitisation of back catalogue, can best be achieved by changes to 
the performers' and producers term of protection. Although other social measures in favour of 
performers  are  often  mentioned  (subsidies,  inclusion  in  social  security  schemes),  such 
measures have rarely materialised and the status and livelihood of creators is usually linked to 
royalties and remuneration payments that stem from copyright. A term-based proposal would 
thus increase income for performers.  

Within the term based approaches, the approach based on a term that is triggered by a uniform 
event,  such  as  publication  of  a  phonogram  is  clearly  preferable  to  a  term  based  on  the 
individual life of a performer. Linking the term of protection of performers to their individual 
life  would  lead  to  increased  legislative  burdens  for  Member  States  and  considerable  legal 
uncertainty  as  to  the  determination  of  the  event  that  triggers  the  term.  This  is  because  of 
difficulties  in  relation  to  establish  a  uniform  trigger  point  in  cases  of  co-performances.  Co-
performances  are  the  norm,  i.e.  performances  by  a  band,  an  orchestra  or  a  featured  artists 
accompanied by session musicians. There are currently no rules providing for the calculation 
of the term of protection in such cases, because the event which triggers the current term of 
protection is the publication of the performance. If the event triggering the term of protection 
is  the  death  of  a  performer,  then,  when  several  performers  contribute  to  a  recording  or 
performance,  the  issue  would  arise  whose  death  triggers  the  term.  In  cases  of  several  co-
performers it would seem appropriate to calculate the term from the death of the last surviving 
performer. However, there are currently no Community rules on this matter. The analogy with 
the term of copyright protection of co-written works is of limited assistance, as there are no 
Community rules on the calculation of the term of protection for co-written works either.  

The proposal to extend the term of protection for performers and phonogram producers would 
mean a numerical change (substituting 50 by 95) to the current national legislation on related 
rights found in the EU Member States. The accompanying measures leave flexibility to MS 
on how to apply them and the administrative burden falls more on the phonogram producers 
and collecting societies.  

The  change  in  national  copyright  laws  would  be  minimal  and  there  would  be  no  financial 
burden  on  any  public  authorities.  Empirical  studies  also  show  that  the  price  of  sound 
recordings that are out of copyright is not lower than that of sound recordings in copyright. A 
recent study by Price Waterhouse Coopers finds no clear evidence that records in which the 

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related rights have expired are systematically sold at lower prices than records which are still 
protected.  

Phonogram producers will have to each contribute to a fund and collecting societies will have 
to  administer  these  revenues.  However,  their  administrative  burden  inherent  in  setting  aside 
20% of revenues that are generated with the sales of phonograms containing performances by 
session  musicians  during  the  extended  term  would  be  offset  by  the  advantages  session 
musicians will enjoy through term extension. The level of the fund strikes a balance between 
the  need  to  generate  and  appreciable  incremental  increase  in  the  revenues  of  session 
musicians and the need to ensure that phonogram producers still derive sufficient profits from 
sales to have an incentive to market phonograms in the extended term.  

A simple model calculation in the IA shows that a 20% share would strike the right balance 
between  the  profitability  of  phonograms  that  are  exploited  in  the  extended  term  and  the 
creation of a tangible added benefit for performers. This calculation attempts to measure the 
impact that a revenue-based fund would have on record 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  average  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 aggregate profit of 9.1%.  

On  this  basis,  one  can  venture  a  guess  at  the  profitability  of  the  one  successful  CD  by 
comparing its profit margin with that of the remaining seven CDs. Assuming that: 5 CDs ("b" 
through "f" in the example) break even (profit = 0), which is extremely optimistic and 2 CDs 
("g" and "h") make a loss (for "g" the loss is 30; for "h" the loss is 40); then the successful CD 
"a" has to make a substantial profit. In our example the profit margin is 60%.  

As  phonogram  producers  will  focus  on  reissuing  the  "premium"  CDs  during  the  extended 
term,  i.e.,  those  with  very  high  profit  margins,  a  revenue-based  fund  (setting  aside  20%  of 
revenue achieved with the premium CDs) would mean that 20% of the revenue attributed to 
CD  "a",  250  (i.e.,  50)  would  be  set  aside  for  performers.  Therefore,  even  after  taking  into 
account the fund, the phonogram producers' profit margin in the extended term would still be 
100/250=40%. 

As  mentioned  above,  a  fund  based  on  setting  aside  20%  of  revenue  that  is  generated  by 
phonograms  in  the  extended  term  would  triple  the  benefit  that  individual  performers  derive 
from an extension of term.  

The proposed remedy on musical compositions with words is the least intrusive instrument to 
achieve a uniform term for musical compositions.  

The effect of this proposed new Article 1(7) would be that, only for the purpose of calculating 
its term of protection, a musical composition with words would be treated as if it were a work 

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of joint authorship, whether or not this composition with words would qualify as a work of 
joint authorship under national rules.  

This approach is in line with the subsidiarity principle. It would leave intact Member States 
discretion to determine what work constitutes a work of joint authorship. On the other hand, it 
introduces  a  minimum  level  of  harmonisation,  so  that  the  term  of  all  musical  compositions 
with  words  which  contain  two  or  more  separate  contributions  would  be  calculated  in  a 
uniform way.  

•  Choice of instruments 

The proposed instrument is a Directive. Other means would not be adequate since the term of 
protection was already harmonised via a Directive, the only possibility to extend this term is 
to amend the said Directive. 

4. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

5. 

ADDITIONAL INFORMATION 

•  European Economic Area 

The  proposed  act  concerns  an  EEA  matter  and  should  therefore  extend  to  the  European 
Economic Area. 

•  Detailed explanation of the proposal 

Article 1 amends the existing Articles 3(1) and 3(2) of Directive 2006/116 which governs the 
term  of  protection  applicable  to  performances (Article  3(1))  and  phonograms  (Article  3(2)). 
The existing term of 50 years would be extended for both the phonogram and the performance 
embodied therein to 95 years.  

The  text  provides  that  if  a  phonogram  is  lawfully  published  or  communicated  to  the  public 
within  50  years  of  its  fixation,  the  rights  shall  expire  95  years  after  publication  or 
communication to the public. If a performance is embodied in a phonogram which is lawfully 
published or communicated to the public within 50 years of its fixation, the rights shall expire 
95 years after publication or communication to the public  

The newly proposed Article 10a would introduce a series of measures accompanying the term 
extension  while  Article  10(5)  would  contain  the  rules  on  which  phonograms  and 
performances are affected by the proposal. 

The aim of the measures contained in Article 10a is largely to ensure that featured and non-
featured  performers  whose  performances  are  fixed  in  a  phonogram  effectively  benefit  from 
the proposed term extension.  

Article 10a (3), (4) and (5) envisage to remedy the situation that session musicians (musicians 
that  do  not  enjoy  recurring  contractual  royalty  payments),  upon  entering  into  a  contractual 
relationship  with  a  phonogram  producer,  often  have  to  transfer  their  exclusive  rights  of 
reproduction,  distribution  and  'making  available'  to  the  phonogram  producers.  Session 
musicians transfer their exclusive rights against a one-off payment ('buy out').  

The proposed remedy for the 'buy out' is that session musicians will obtain a claim to receive 
a  yearly  payment  from  a  dedicated  fund.  In  order  to  fund  these  payments,  phonogram 
producers are under an obligation to set aside, at least once a year, at least 20 percent of the 
revenues from the exclusive rights of distribution, rental, reproduction and 'making available' 

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of phonograms which, in the absence of term extension, would no longer be protected under 
Article  3.  In  order  to  ensure  the  most  granular  possible  level  of  distribution  to  session 
musicians,  Member  States  may  require  that  distribution  of  these  monies  is  entrusted  to 
collecting societies representing performers.  

Producers'  revenues  deriving  from  single  equitable  remuneration  for  broadcasting  and 
communication to the public and fair compensation for private copying shall not be included 
in the revenues to be set aside in favour of session musicians, as these secondary claims are 
never transferred to phonogram producers. Moreover, producer's revenues deriving from the 
rental of phonograms shall not be included, as performers still benefit from an unwaiverable 
right  to  equitable  remuneration  from  such  exploitation,  under  Article  5  of  Directive 
2006/115/EC .  

Article  10a  (6)  provides  for  a  statutory  'use  it  or  lose  it'  clause.  Therefore,  if  a  phonogram 
producer does  not publish  a phonogram, which, but for the term extension, would be in the 
public domain, the rights in the fixation of the performance shall, upon his request, revert to 
the  performer  and  the  rights  in  the  phonogram  shall  expire.  Further,  if  after  one  year 
subsequent to the term extension, neither the phonogram producer nor the performer made the 
phonogram available to the public, the rights in the phonogram and the rights in the fixation 
of the performance shall expire. 

For the purposes of the 'use it or lose it' clause, publication of a phonogram means the offering 
of copies of the phonogram to the public, with the consent of the right holder, and provided 
that copies are offered to the public in reasonable quantity. Publication would also comprise 
otherwise commercial exploitation of a phonogram, such as making the phonogram available 
to online retailers.  

A  further  purpose  of  the  clause  is  to  ensure  that  phonograms  which  neither  the  phonogram 
producer nor the performers wish to exploit are not 'locked up'. This also means that orphan 
phonograms, for which neither the phonogram producer nor the performers can be identified 
or found, will benefit from the clause because such orphan phonograms will not be exploited 
by  either  the  producer  or  the  performer.  All  types  of  phonograms  which  are  not  exploited 
would thus be available for public use. 

This clause has the purpose of allowing performers whose performances fixed in a phonogram 
are no longer published by the original phonogram producer after the initial 50 year term to 
regain control over their performance and make it available to the public themselves. On the 
other hand, the producers' right should expire in order to ensure that the performers' efforts to 
make their performances available as widely as possible are not hindered.  

This initiative proposes that the term extension apply to performances and sound recordings 
whose  initial  term  of  protection  of  50  years  has  not  expired  at  the  date  of  adoption  of  the 
amended  Directive.  It  will  not  retroactively  extend  to  performances  that  had  already  fallen 
into  the  public  domain  by  this  date.  This  criterion  is  simple  to  apply  and  is  an  approach 
already used in Directive 2001/29/EC. 

The  new  Article  1(7)  is  introduced  to  apply  a  uniform  method  of  calculating  the  term  of 
protection  of  musical  compositions  with  words.  Article  1(7)  is  modelled  on  the  existing 
Article 2, which provides a method for calculating the term of protection for cinematographic 
or  audiovisual  works.  Under  Article  1(7),  when  a  musical  composition  is  published  with 
lyrics, the term of protection shall be calculated from the death of the last surviving person: 
the author of the lyrics or the composer of the music. 

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Article 2 

Article 2 of the  amending Directive  provides  for the  rules on transposition of the amending 
Directive. 

Article 3 

Article  3  of  the  amending  Directive  relates  to  the  date  of  entry  into  force  of  the  amending 
Directive. 

Article 4 

Article  4  of  the  amending  Directive  indicates  that  the  amending  Directive  is  addressed  to 
Member States. 

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2008/0157 (COD) 

Proposal for a 

EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE 

amending Directive 2006/116/EC of the European Parliament and of the Council on the 
term of protection of copyright and related rights 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Articles 
47(2), 55 and 95 thereof, 
Having regard to the proposal from the Commission22, 
Having regard to the opinion of the European Economic and Social Committee23, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

Under  Directive  2006/116/EC  of  12  December  2006  on  the  term  of  protection  of 
copyright  and  certain  related  rights24,  the  term  of  protection  for  performers  and 
producers of phonograms is 50 years. 

In the case of performers this period starts with the performance or, when the fixation 
of their performance is published or communicated to the public within 50 years after 
the  performance  is  made,  50  years  from  the  first  such  publication  or  the  first  such 
communication to the public, whichever is the earliest.  

For phonogram producers the period starts with the fixation of the phonogram or from 
its  publication  within  50  years  after  fixation,  or,  if  not  published,  from  its 
communication to the public within 50 years after fixation.  

The socially recognised importance of the creative contribution of performers needs to 
be  reflected  in  a  level  of  protection  that  acknowledges  their  creative  and  artistic 
contributions. 

Performers generally start their careers young and the current term of protection of 50 
years  with  regard  to  performances  fixed  in  phonograms  and  for  phonograms  often 
does not protect their performances during their entire lifetime. Therefore, performers 
face an income gap at the end of their lifetimes. They are also often not able to rely on 
their  rights  to  prevent  or  restrict  objectionable  uses  of  their  performances  that  occur 
during their lifetimes.  

(6) 

The revenues derived from the exclusive rights of reproduction and making available, 
as  provided  for  in  Directive  2001/29/EC  of  the  European  Parliament  and  of  the 
Council  of  22  May  2001  on  the  harmonisation  of  certain  aspects  of  copyright  and 

22 
23 
24 

OJ C , , p. . 
OJ C , , p. . 
OJ L 372, 27.12.2006, p. 12. 

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related  rights  in  the  information  society25,  as  well  as  fair  compensation  for 
reproductions  for  private  use  within  the  meaning  of  that  Directive,  and  from  the 
exclusive  rights  of  distribution  and  rental  within  the  meaning  of  Directive 
2006/115/EC of the European Parliament and of the Council of 12 December 2006 on 
rental right and lending right and on certain rights related to copyright in the field of 
intellectual property26 should be available to performers for at least their lifetime.  

The  term  of  protection  for  fixations  of  performances  and  for  phonograms  should 
therefore  be  extended  to  95  years  after  publication  of  the  phonogram  and  the 
performance fixed therein. If the phonogram or the performance fixed in a phonogram 
has not been published within the first 50 years, then the term of protection should run 
for 95 years from the first communication to the public.  

Upon entering into a contractual relationship with a phonogram producer, performers 
normally  have  to  transfer  to  the  phonogram  producers  their  exclusive  rights  of 
reproduction,  distribution,  rental  and  making  available  of  fixations  of 
their 
performances.  In  exchange,  performers  are  paid  an  advance  on  royalties  and  enjoy 
payments  only  once  the  phonogram  producer  has  recouped  the  initial  advance  and 
made  any  contractually  defined  deductions.  Performers  who  play  in  the  background 
and  do  not  appear  in  the  credits  ("non-featured  performers")  usually  transfer  their 
exclusive rights against a one-off payment (non recurring remuneration).  

For  the  sake  of  legal  certainty  it  should  be  provided  that  in  the  absence  of  clear 
indications to the contrary, a contractual transfer or assignment of rights in the fixation 
of  the  performance  concluded  before  the  date  by  which  Member  States  are  to  adopt 
measures  implementing  the  directive  shall  continue  to  produce  its  effects  for  the 
extended term.  

In  order  to  ensure  that  performers  who  have  transferred  their  exclusive  rights  to 
phonogram  producers  before  the  extension  of  the  term  of  protection  actually  benefit 
from  that  extension,  a  series  of  accompanying  transitional  measures  should  be 
introduced.  These  measures  should  apply  to  contracts  between  performers  and 
phonogram producers which actually continue to produce their effects for the extended 
term. 

(7) 

(8) 

(9) 

(10) 

(11)  A  first  accompanying  transitional  measure  should  be  that  phonogram  producers  are 
under an obligation to set aside, at least once a year, at least 20 percent of the revenues 
from  the  exclusive  rights  of  distribution,  reproduction  and  making  available  of 
phonograms which, in the absence of the extension of the term of protection as a result 
of lawful publication or lawful communication, would be in the public domain.  

(12)  The  first  transitional  accompanying  measure  should  not  entail  a  disproportionate 
administrative  burden  on  small  and  medium  sized  phonogram  producers.  Therefore, 
Member States shall be free to exempt certain phonogram producers who are deemed 
small  and  medium  by  reason  of  the  annual  revenue  achieved  with  the  commercial 
exploitations of phonograms. 

(13)  Those  monies  should  be  reserved  solely  for  the  benefit  of  performers  whose 
performances  are  fixed  in  a  phonogram  and  who  have  transferred  their  rights  to  the 
phonogram producer against a one-off payment. The monies set aside in this manner 
should be distributed to non-featured performers at least once a year on an individual 

25 
26 

OJ L 167, 22.6.2001, p.10. 
OJ L 376, 27.12.2006, p. 28.  

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basis.  Member  States  may  require  that  distribution  of  those  monies  is  entrusted  to 
collecting societies representing performers. When the distribution of those monies is 
entrusted  to  collecting  societies,  national  rules  on  non-distributable  revenues  may  be 
applied.  

(14)  However,  Article  5  of  Directive  2006/115  on  rental  right  and  lending  right  and  on 
certain  rights  related  to  copyright  in  the  field  of  intellectual  property  already  grants 
performers an unwaivable right to equitable remuneration for the rental, inter alia, of 
phonograms.  Likewise,  in  contractual  practice  performers  do  not  usually  transfer  to 
phonogram  producers  their  rights  to  claim  a  single  equitable  remuneration  for 
broadcasting  and  communication  to  the  public  under  Article  8(2)  of  Directive 
2006/115/EC and to fair compensation for reproductions for private use under Article 
5(2)(b) of Directive 2001/29/EC. Therefore, in the calculation of the overall amount to 
be  dedicated  by  a  phonogram  producer  to  payments  of  the  supplementary 
remuneration, no account should be taken of revenues which the phonogram producer 
has derived from the rental of phonograms and from a single equitable remuneration 
for  broadcasting  and  communication  to  the  public  and  fair  compensation  for  private 
copying should.  

(15)  A second accompanying transitional measure should be that the rights in the fixation 
of  the  performance  should  revert  to  the  performer  if  a  phonogram  producer  refrains 
from offering for sale in sufficient quantity copies of a phonogram which, but for the 
term  extension,  would  be  in  the  public  domain  or  from  making  such  a  phonogram 
available to the public. As a consequence, the rights of the phonogram producer in the 
phonogram  should  expire,  in  order  to  avoid  a  situation  in  which  these  rights  would 
coexist with those of the performer in the fixation of the performance whilst the latter 
rights are no longer transferred or assigned to the phonogram producer. 

(16)  This  accompanying  measure  should  also  ensure  that  a  phonogram  is  no  longer 
protected  once  it  is  not  made  available  to  the  public  after  a  certain  period  of  time 
following  the  term  extension,  because  rightholders  do  not  exploit  it  or  because  the 
phonogram  producer  or  the  performers  cannot  be  located  or  identified.  If,  upon 
reversion, the performer has had a reasonable period of time to make available to the 
public the phonogram which, but for the term extension, would be no longer protected, 
the phonogram is not made available to the public, the rights in the phonogram and in 
the fixation of the performance should expire. 

(17)  Since  the  objectives  of  the  proposed  accompanying  measures  cannot  be  sufficiently 
achieved by the Member States, as national measures in that field would either lead to 
distortion of the conditions of competition or affect the scope of exclusive rights of the 
phonogram producer which are defined by Community legislation and can therefore, 
be  better  achieved  at  Community  level,  the  Community  may  adopt  measures,  in 
accordance  with the principle of subsidiarity as set out in Article 5 of  the Treaty. In 
accordance  with  the  principle  of  proportionality,  as  set  out  in  that  Article,  this 
directive does not go beyond what is necessary in order to achieve those objectives. 

(18) 

In certain Member States, musical compositions with words are applied a single term 
of  protection,  calculated  from  the  death  of  the  last  surviving  author,  while  in  other 
Member  States,  separate  terms  of  protection  apply  for  music  and  lyrics.  Musical 
compositions  with  words  are  overwhelmingly  co-written.  For  example,  regarding 
opera,  there  are  often  different  authors  to  the  music  and  to  the  lyrics.  Moreover,  in 
musical  genres  such  as  jazz,  rock  and  pop  music,  the  creative  process  is  often 
collaborative in nature.  

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(19)  Consequently,  the  harmonisation  of  the  term  of  protection  in  musical  compositions 
with words is incomplete, giving rise to impediments to the free movement of goods 
and services, such as cross-border collective management services. 

(20)  Directive 2006/116/EC should therefore be amended accordingly, 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 

Directive 2006/116/EC is amended as follows: 

–  (1)  The second sentence of Article 3(1) is replaced by the following:  

"However,  

-  if  a  fixation  of  the  performance  otherwise  than  in  a  phonograph  is  lawfully  published  or 
lawfully  communicated  to  the  public  within  this  period,  the  rights  shall  expire  50 
years from the date of the first such publication or the first such communication to 
the public, whichever is the earlier, 

-  if  a  fixation  of  the  performance  in  a  phonograph  is  lawfully  published  or  lawfully 
communicated to the public within this period, the rights shall expire 95 years from 
the date  of  the  first such publication or the first such communication to the  public, 
whichever is the earlier." 

–  (2)  In  the  second  and  third  sentence  of  Article  3(2)  the  cipher  "50"  is  replaced  by  the 

cipher "95" 

–  (3)  In Article 10 the following paragraph 5 is inserted: 

"5. 

Article  3  (1)  and  (2)  in  their  version  as  amended  by  Directive  [//  insert:  Nr.  of  the 
amending  directive]  shall  continue  to  apply  only  to  fixations  of  performances  and 
phonograms in regard of which the performer and the phonogram producer are still 
protected, by virtue of these provisions, on [insert date before which Member States 
are to transpose the amending directive, as mentioned in Article 2 below]." 

–  (4)  The following Article 10 a is inserted: 

"Article 10a 

Transitional measures relating to the transposition of directive [// insert: Nr. of the 
amending directive] 

1. 

2. 

In  the  absence  of  clear  indications  to  the  contrary,  a  contract,  concluded  before 
[insert date before which Member States are to transpose the amending directive, as 
mentioned in Article 2 below], whereby a performer has transferred or assigned his 
rights  in  the  fixation  of  his  performance  to  a  phonogram  producer  (hereinafter:  a 
"contract  on  transfer  or  assignment"),  shall  be  deemed  to  continue  to  produce  its 
effects  beyond  the  moment  at  which,  by  virtue  of  Article  3  (1)  and  (2)  in  their 
version before amendment by Directive [// insert: Nr. of this amending directive], the 
performer  and  the  phonogram  producer  would  be  no  longer  protected  in  regard  of, 
respectively, the fixation of the performance and the phonogram. 

Paragraphs 3 to 6 of this article shall apply to contracts on transfer or assignment which 
continue to produce their effects beyond the moment at which, by virtue of Article 3 
(1)  and  (2)  in  their  version  before  amendment  by  Directive  [//  insert:  Nr.  of  this 
amending  directive]/EC,  the  performer  and  the  phonogram  producer  would  be  no 

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3. 

4. 

5. 

6. 

longer  protected  in  regard  of,  respectively,  the  fixation  of  the  performance  and  the 
phonogram. 

Where a contract on transfer or assignment gives the performer a right to claim a non 
recurring  remuneration,  the  performer  shall  have  the  right  to  obtain  an  annual 
supplementary  remuneration  from  the  phonogram  producer  for  each  full  year  in 
which,  by  virtue  of  Article  3  (1)  and  (2)  in  its  version  before  amendment  by 
Directive  [//  insert:  Nr.  of  this  amending  directive]/EC,  the  performer  and  the 
phonogram  producer  would  be  no  longer  protected  in  regard  of,  respectively,  the 
fixation of the performance and the phonogram. 

The  overall  amount  to  be  dedicated  by  a  phonogram  producer  to  payments  of  the 
supplementary remuneration referred to in paragraph 3 shall correspond to at least 20 
percent  of  the  revenues  which  he  has  derived,  during  the  year  preceding  that  for 
which the said remuneration is paid, from the reproduction, distribution and making 
available of those phonograms in regard of which, by virtue of Article 3 (1) and (2) 
in  their  version  before  amendment  by  Directive  [//  insert:  Nr.  of  this  amending 
directive]/EC,  the  performer  and  the  phonogram  producer  would  be  no  longer 
protected on 31 December of the said year. 

Member States may provide that a phonogram producer whose total annual revenue, 
during  the  year  preceding  that  for  which  the  said  remuneration  is  paid,  does  not 
exceed a minimum threshold of € 2 million, shall not be obliged to dedicate at least 
20 percent of the revenues which he has derived, during the year preceding that for 
which the said remuneration is paid, from the reproduction, distribution and making 
available of those phonograms in regard of which, by virtue of Article 3 (1) and (2) 
in  their  version  before  amendment  by  Directive  [//  insert:  Nr.  of  this  amending 
directive]/EC,  the  performer  and  the  phonogram  producer  would  be  no  longer 
protected on 31 December of the said year. 

Member States may regulate whether and to what extent administration by collecting 
societies of the right to obtain an annual supplementary remuneration referred to in 
paragraph 3 may be imposed. 

If, after the moment at which, by virtue of Article 3 (1) and (2) in their version before 
amendment by Directive [// insert: Nr. of this amending directive]/EC, the performer 
and the phonogram producer would be no longer protected in regard of, respectively, 
the fixation of the performance and the phonogram, the phonogram producer ceases 
to offer copies of the phonogram for sale in sufficient quantity or to make it available 
to the public, by wire or wireless means, in such a way that members of the public 
may  access  them  from  a  place  ant  at  a  time  individually  chosen  by  them,  the 
performer may terminate the contract on transfer or assignment. Where a phonogram 
contains  the  fixation  of  the  performances  of  a  plurality  of  performers,  they  may 
terminate  their  contracts  on  transfer  or  assignment  only  jointly.  If  the  contract  on 
transfer  or  assignment  is  terminated  pursuant  to  sentences  1  or  2,  the  rights  of  the 
phonogram producer in the phonogram shall expire. 

If,  one  year  after  the  moment  at  which,  by  virtue  of  Article  3  (1)  and  (2)  in  their 
this  amending 
version  before  amendment  by  Directive  [// 
directive]/EC,  the  performer  and  the  phonogram  producer  would  be  no  longer 
protected  in  regard  of,  respectively,  the  fixation  of  the  performance  and  the 
phonogram, the phonogram is not made available to the public, by wire or wireless 
means, in such a way that members of the public may access them from a place and 
at a time individually chosen by them, the rights of the phonogram producer in the 

insert:  Nr.  of 

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phonogram  and  the  rights  of  the  performers  in  relation  to  the  fixation  of  their 
performance shall expire. " 

–  (5)  The following Article 1(7) is inserted: 

"The term of protection of a musical composition with words shall  expire 70 years 
after the death  of the last of the following  persons  to survive, whether or not these 
persons are designated as co-authors: the author of the lyrics and the composer of the 
music" 

Article 2 

Transposition 

1. 

Member  States  shall  adopt  and  publish,  by  at  the  latest,  the  laws,  regulations  and 
administrative  provisions  necessary  to  comply  with  this  Directive.  They  shall 
forthwith  communicate  to  the  Commission  the  text  of  those  provisions  and  a 
correlation table between those provisions and this Directive. 

They shall apply those provisions from […]. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

This Directive shall enter into force on the day following that of its publication in the Official 
Journal of the European Union. 

Article 3 

This Directive is addressed to the Member States. 

Done at Brussels,  

Article 4 

For the European Parliament 
The President 

For the Council 
The President  

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