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The EC and the creative industries…

2011 so far...

July: The European Commission (EC) released a Green Paper on the online distribution of audiovisual works.
July: The EC published the synthesis of the comments received during the consultation on the enforcement of intellectual property rights. Most respondents said current rules were not suitable to deal with specific challenges of the digital environment.
July: An agreement was announced between the biggest US internet providers and the creative industry to deal with copyright infringement online, based on notice and mitigation measures.
July: Poland took over the EU presidency on 1st July, succeeding Hungary. In terms of culture the Polish Presidency will focus on promoting a better understanding of the role of culture and on using the potential of culture to enhance the EU’s economic development.
June: The EC proposed to set up loan guarantee and equity instruments for cultural and creative industries by 2014, as part of a proposal for the EU’s new financial framework for the period 2013-2020.
June: The EC organised the 1st Digital Assembly to assess progress on the Commission’s Digital Agenda.
June: The EC held a hearing on the Directive on the enforcement of intellectual property rights.
May: The EC launched a new strategy for intellectual property rights, dealing with orphan works, counterfeiting and piracy, collective management of copyright, private copying, consumer awareness online, and a possible copyright code.
May: The EC consultation on VAT closed.
May: The EC consultation on research and innovation funding closed.
May: The European Commissioner for culture brought together cultural and creative companies, financial institutions and the European Commission to explore ways to improve financial engineering for the sector.
May: The European Parliament passed a resolution on unlocking the potential of cultural and creative industries. The resolution calls for the adaptation of competition rules to the cultural sector, for reduced VAT for cultural products on- and off-line, for better access to finance for cultural SMEs, for an EU licensing system and for action to combat copyright infringement.
April: The EC published a Communication on Net Neutrality. The EC supports net neutrality principles (open internet, freedom to conduct business online, etc.) but also considers traffic management as useful to avoid network congestion.
April: The EC released its Single Market Act, a work plan to boost the EU’s internal market with policy-targeted measures. The text particularly underlines the importance of ensuring a level playing field for all in the Single Market. It tackles access to finance for SMEs, intellectual property rights, the digital single market and taxation.
March: the EC published its analysis of the consultation launched by the Green Paper on “unlocking the potential of cultural and creative industries”. It raises the issues of fair access approach of cultural markets, implementation of the UNESCO convention on cultural diversity in the EU competition policy, the key role of cultural SMEs and the need to improve SMEs’ access to finance.
March: the EC unveiled a draft proposal designed to make it easier for companies to run cross-border businesses. It is a single set of rules that EU companies could use to calculate their taxable profits. It is called the Common Consolidated Corporate Tax Base.
March: The EC consultation on the enforcement of intellectual property rights closed.
March: 100 new IMPALA awards were announced. To mark IMPALA’s 10th anniversary, two new awards were created The inaugural Outstanding Contribution Award went to Mario Pacheco, while Efterklang’s Magic Chairs received the very first European Independent Album of the Year Award.
February: the EC presented its Green Paper on a common strategic framework for future EU research and innovation funding.
January: The EC released a Green Paper on the future of VAT.
January: The EC consultation on a possible successor programme to the Competitiveness and Innovation Framework Programme 2007-2013 closed.
January: the EC published a Communication which outlines the most serious cross-border tax obstacles in Europe, and possible solutions to tackle them.
January: the “Comité des Sages”, a reflection group on digitisation set up by EU Commissioners Kroes (Digital agenda), Vassiliou (Culture) and Barnier (Internal Market) last year, released its report. Among other issues, the report focuses on the on-line accessibility of in-copyright material.
January: Hungary took over the EU presidency on 1st January, succeeding Belgium. In terms of culture the Hungarian Presidency’s focus is on the mobility of artists and on the specific contribution of cultural and creative industries to the EU2020 Strategy.
January: Some French online music services signed an agreement called “13 commitments for online music”. This agreement aims at facilitating access to rights of publishers of online music services.

2010 in a nutshell

December: The upcoming Hungarian Presidency of the EU released its key priorities for culture, namely the European Heritage label, the mobility of artists and a mapping of the contribution of cultural and creative industries to the EU 2020 Strategy to be discussed in more detail during a conference in Budapest in late February
December: IMPALA submitted comments on the Future Culture Programme consultation for cultural stakeholders, organised by the European Commission.
December: the EC released its Green Paper on the future of VAT, as part of its strategy for a simpler and more efficient VAT system in Europe. It is coupled with a consultation on the issue, running until May 2011.
November: IMPALA submitted comments as part of the EC consultation on e-commerce, raising issues such as the impact of digital piracy on music SMEs, the need for national remedies against piracy, the necessity for market access measures, and the support for a true collective multi-territory licensing system ensuring access to all repertoire.
November: The final version of the Anti-Counterfeiting Trade Agreement (ACTA) was published. It will now be submitted to national authorities for approval, meaning the European Parliament for EU Member States. The final text does not mention “three-strikes” but gives countries the right to order an ISP to provide information about users infringing copyright.
November: the EC opened a consultation on the Single Market Act. It focuses on a certain number of principles, on which the Commission could base its future legislative proposals in order to improve the EU-wide legal framework for cross-border transfers.
October: The EC released its “Innovation Union” strategy, comprising ten key elements. Two of these are very relevant to the music sector: a proposed modernisation of Europe’s intellectual property regime and a review of state-aid and structural funding to boost innovation.
October: Two consultations launched by DG Taxation and Customs, on VAT and Taxation of cross border interest and royalty payments between associated companies, closed.
October: The EC approved the French youth music card initiative, which was then launched on the 28th of October. The cards aim to encourage music fans to migrate to legal services as part of the measures recommended in the French Creation and Internet report.
September: DG Information Society & Media’s consultation period on Net Neutrality ended, which covered issues such as whether internet providers should be allowed to adopt certain traffic management practices, such as prioritising one kind of internet traffic over another.
September: The “Comité des Sages” consultation on bringing European Cultural Heritage Online closed, which included debate of the sources of funding for digitisation and the exploitation models of content digitised with public funding.
September: The Culture Commission launched a consultation on the future EU Programme for Culture after 2013, to gather input for the development of the next round of the Culture Programme including its objectives, activities and types of support.
September: At Popkomm, IMPALA celebrated its 10th birthday, holding panels on a decade of achievements and “A Sporting Chance for the Independents”.
September: The latest IMPALA Awards were announced at Popkomm, with German label Superstar being presented with an award for their success with Yolanda Be Cool & D-Cup’s “We No Speak Americano”.
September: MEPs voted in favour of the report on Intellectual Property Rights enforcement (the “Gallo Report”), which called for the European Parliament to implement stronger copyright enforcement measures.
September: In France, the first warning letters were sent out to copyright infringers under the three-strikes system.
June: IMPALA held the 2nd Independent Music Summit in Brussels, with key EU officials, parliamentarians and national governments discussing the experiences of some of Europe’s most innovative entrepreneurs.
June: IMPALA was invited by DG Enterprise to submit comments on a review of the Small Business Act.
June: IMPALA submitted comments on an EC public consultation on double tax conventions and the internal market. The consultation focused on direct taxes that are paid twice or more in different member states by the same taxpayer on the same income or asset.
May: The EC launched the Digital Agenda for Europe, part of the EU 2020 strategy. The text focuses on seven priorities (in particular the creation of a single digital market) and addresses issues such as pan-European licensing, online distribution and collective rights management.
April: The European Commission adopted its Green Paper on the cultural and creative industries, highlighting issues such as SME access to finance, the need to develop local economies and increase music’s mobility, and market access especially regarding creating a level playing field.
April: The UK government has finally voted in its Digital Economy Bill and the introduction of new measures to help deal with illegal P2P.
April: The EC launched a new initiative on the governance and the transparency of collecting societies, to explore the development of collective management of copyright and neighbouring rights in the EU.
April: In Belgium, a stimulus plan for the music sector was launched, including the development of musical residences, increased financial support for music venues and the creation of music videos, incentives for diffusion and better structural support for independent labels.
March: In Belgium, a law proposal proposing the a three-strikes system, similar to the one in France, could be discussed in the coming months.
March: In Spain, independent labels and members of IMPALA, UFi (Spain) and Apecat (Catalunia) have taken the government to court on charges of negligence. They are seeking compensation for the damage done to the sector by massive free downloading over the past few years.
February/March: The European Economic and Social Committee (EESC) released three draft documents: an opinion on “Copyright with particular attention to music”, an opinion on IP protection reinforcement in the European internal market, and one on cultural and creative industries.
February: The new Commissioners took office, including Androulla Vassiliou (Education, Culture, Multilingualism and Youth), Michel Barnier (Internal Market), Neelie Kroes (Digital Agenda), Antonio Tajani (Industry and Entrepreneurship) and Joaquín Almunia (Competition).
February: Spain released proposals to simplify the process for targeting piracy. It clarifies the liabilities of those involved and enables quicker action against the owners of online services that enable piracy.
January: In France, released its “Creation and Internet” report. It includes licensing changes, diversity obligations for music service providers, market access for SMEs, and improving tax credits for labels.
January: Spain took over the Presidency of the EU on 1st January, with Belgium and Hungary following to lead Europe until July 2011.
January: At MIDEM, IMPALA released its Action Plan for Finance. The plan looks to reward investment in new talent and compensate for imbalances in the music sector. It proposes football style compensation and revenue-sharing mechanisms, new accounting standards to value copyright properly, and a range of investment measures for SMEs.
January: The first IMPALA Awards announcement of the year at Midem with the first U.S. number one for a European independent in more than 20 years, Vampire Weekend, going IMPALA Diamond in just two weeks.
January: IMPALA launched its new Friends of IMPALA scheme. It includes two tiers, Gold and Platinum, and is the first pan-European network of companies working with the music business.
January: The EC, through the part of DG Enterprise dealing with policy & innovation, set up a platform, called the European Creative Industries Alliance, which focuses on the cultural industries and innovation.
January: The French “Creation and Internet” law entered into force.
January: The EC announced its proposed “EU 2020” Strategy. It focuses on creating value through knowledge, empowering people in inclusive societies, and creating a competitive, connected and greener economy. It also includes references to the improvement of IPR enforcement, access to finance for SMEs, better circulation of content, promoting innovation, and a single market for online content and services.

2009 in a nutshell

The Commission released a consultation on its future EU 2020 Strategy. This document sets out a vision for how EU 2020 will focus on three thematic objectives: creating value through knowledge; empowering people in inclusive societies; and creating a competitive, connected and greener economy.
The new College of European Commissioners was announced in late November with French Michel Barnier (Internal Market), Dutch Neelie Kroes (Digtial Agenda), Cypriot Androulla Vassiliou (Culture), Spanish Joaquin Almunia (Competition) and Italian Antonio Tajani (Enterprise) taking the portfolios that are most important to cultural SMEs.
The UK presented its Digital Economy Bill which aims to reduce Internet abuse, specifically copyright infringement. The Bill includes a proposal for a three strikes rule, by which Internet connections could be cut off on suspicion of their use to infringe copyright.
November saw the Lisbon Treaty finally ratified following the positive Irish referendum of early October. The Treaty entered into force on 1st December with Belgian Prime Minister Herman Van Rompuy and British Commissioner Catherine Ashton becoming the first President of the Council and High Commissioner for Foreign and Security Policy respectively.
The Telecom Package was finally adopted in November and makes the French “Creation and Internet” law compatible with EU law.
October went digital crazy with four EC commissioners jostling for the position as champion of digital. Firstly, Commissioner Kroes organised the third Online Commerce Round Table, launching a working group and calling for measures concerning licensing in the online distribution of music. On the same day Commissioners McCreevy and Reding launched a communication on copyright in the knowledge economy. Three days later we saw Commissioners McCreevy and Reding launch a reflection paper on a digital single market for creative content online, with a public consultation to go with it. The same day, Commissioners Reding and Kuneva called for measures on cross border online shopping in Europe.
Negotiations on the Anti-Counterfeiting Trade Agreement are still ongoing and are currently focusing on "enforcement in the digital environment”. We understand that there is pressure to include an obligation for ISPs to adopt three strikes Internet disconnection policies.
The European Culture Forum took place in September and IMPALA’s co-presidents Michel Lambot and Patrick Zelnik took part in the events. The conclusions will feed into the EC’s 2010 Green Paper on cultural and creative industries.
The IMPALA Awards scheme broke the 60 million mark in units sold.
IMPALA’s appeal on the SonyBMG merger is over. The judges’ decision was based on the technicality that the joint venture no longer exists, following the sell-out by Bertelsmann to Sony. We won key points that will be used in the future and have ensured that merger control policies take smaller competitors into consideration. Lawyers remarked that merger control procedure owes a debt of gratitude to IMPALA.
Merlin announced its new board in September, a couple of months before it finalised a deal with MySpace that sees it joining the MySpace board.
Commissioners McCreevy and Reding launched a public consultation on the digitisation of books in August.
The EC stakeholders’ platform on cultural and creative industries presented its final recommendations during the European Culture Forum in September. These will help in particular to unlock the potential of European cultural SMEs.
Copyright term extension proposal was voted by the Parliament but a minority of member states blocked the proposal in first reading before the summer recess. The issue should be back on the table in 2010.
The “Creation and Internet” law - nicknamed “Hadopi 2” - was adopted in September by the French National Assembly. The law operates on a “three strikes” basis, with offenders first being sent an email, then a letter and finally having their internet connection cut off for a year. The bill states that only judges will be allowed to take the decision of suspending an internet account because of repeated infringement.
The EC has created for the very first time a working group involving rightsholders, ISPs and ICT industries to discuss the issue of illegal up and downloading on the internet.
The second phase of the “creation and internet” process was launched with Patrick Zelnik, Co-President of IMPALA mandated to lead a mission which aims to improve the legal availability of cultural goods in the online market to the benefit of creators and consumers alike.
Sweden took over the 6 months rotating EU Presidency in July.
In June, the EC published a study on the impact of culture based creativity showing that it has a key multiplier effect by making Europe a more creative place in general. This report is a key argument to promote investment in culture and SMEs. Interestingly, the report also said that competition rules should be seen as an important tool to promote diversity (which is seen as a key catalyst of creativity).
EC Recommendation on cross border online management of copyright: DG Internal Market will undertake a dialogue with licensors and users to determine whether a regulatory intervention is necessary or not.
DG Information Society launched an independent study on multi-territorial licensing focusing on film and audiovisual.
The ECOFIN Council reached an agreement on reduced VAT rates in certain sectors. Member States should now be allowed to reduce VAT rates on a new series of goods and services including audiobooks but not CDs.
The verdict of the Pirate Bay trial in Sweden was announced in April, with the four defendants found guilty of breaking copyright law and sentenced to a year in jail and a $3.6m dollar fine.
IMPALA met with Culture Commissioner Jan Figel at MIDEM, calling for a specific chapter on cultural SMEs in the Green Paper on cultural and creative industries.
The “report on the harmonisation of copyright” was supposed to be voted by the European Parliament before the elections in June but has been pushed back until further notice.
2009 is the European Year of Creativity and Innovation (EYCI). It aims to raise awareness of the importance of creativity and innovation for personal, social and economic development.

2008 in a nutshell…

The EC creates Europe's first Cultural Industries Stakeholders' platform to come up with concrete recommendations to unlock the potential of Europe's cultural industries, especially SMEs. IMPALA plays key role as one of the five board members, and leader of the working group on SMEs.
French Presidency holds groundbreaking discussions on independence and SMEs in the cultural field, with participants from music, film, and book publishing, to produce concrete recommendations for the EC and member states. To see the recommendations in full, click here
European Parliament attacks the French graduated response agreement on ISP cooperation, by voting changes to the EC's Telecom Package - one of the most polemic debates the Parliament has seen. The text is now being reviewed by member states.
Competition Commissioner Kroes opens a consultation into the online market, including for copyrighted content, threatening further action to ensure the market is competitive.
Collecting societies appeal the EC's competition decision, criticizing collecting societies and CISAC.
Commission approves Sony's buy out of Bertelsmann's share of SonyBMG with no remedies or detailed investigation.
Commission adopts Green Paper on Copyright in the Knowledge Economy to promote the free movement of knowledge and innovation in the single market.
European Court rules in favour of IMPALA that there is no presumption in favour of approving mergers (very important in regards future concentration in the music market), and asks lower court to re-assess its previous judgment annulling the Commission's first approval of the Sony-BMG merger decision.
The French improve their tax credit for music companies by increasing the amount of credit available to 700k euros, with a possible 1.1m euros subject to certain conditions. The costs covered now includes some staff costs. The French language component has been removed as a condition.
French Culture Minister confirms that the French presidency will support reduced VAT for music.
The Commission adopts a proposal extending copyright for performers and record companies to match the USA. It has to be approved by the Parliament and Member States. The Commission's proposal has three key features:
The European Commission approves a proposed French tax-relief scheme whereby investors in SMEs receive relief on the French wealth tax. The reduction in tax is proportional to the investment made and can be up to 50,000€. The scheme has received the support of Commissioner Kroes and is expected to stimulate around €635million investment in SMEs. This could be a useful precedent in other countries, not just in terms of wealth tax initiatives but also to promote other SME investment tax benefits.
Internal Market Commissioner McCreevy opens a new investigation (but more limited than the first) into certain elements of private copying, and appoints IMPALA and other associations to a stakeholder platform to negotiate solutions.
EC decides to take no further action under its Recommendation on collective licensing for online exploitation of music publishing rights, saying that the initiative has already worked.
The European Parliament adopted a Resolution on collective cross-border online management of copyright to underline the climate of legal uncertainty created by the 2005 EC Recommendation on the issue.
EC launches Communication on Creative Content Online to quadruple the market by 2010, with consultation and stakeholder platforms on specific issues (DRM, multi-territorial licensing, piracy, cultural diversity), which may lead to legislative intervention by the EC.
EC adopts Small Business Act, which is intended to set a new framework that will put SMEs at the forefront of society, improve their access to market and access to finance, skills and innovation, reduce red tape, and mainstream SME policy principles in other policy areas.
EC closes investigation into Apple/iTunes investigation, with Apple agreeing to lower prices in the UK to European level.
UK and Japan to follow France on its ISP negotiations.
European Parliament adopts cultural industries report. A rushed last minute amendment unfortunately criticised remedies already negotiated in countries such as France, which suspend consumer internet access in case of copyright infringement. Otherwise the report contains many far reaching elements including recognition that:

For an overview of the main public affairs developments in Brussels in 2008 click here

2007 in a nutshell…

Culture and creative industries, and in particular the sector’s SMEs, finally become an official part of Europe’s Lisbon strategy.
European Parliament interrogates EC Commissioner Kroes twice during the year on her decision to approve the SonyBMG merger.
SMEs in the cultural and creative sectors gain highest possible recognition that: a) they are Europe’s drivers of innovation, creativity, growth and employment; and b) they need specific support measures.
First ever European Communication on Culture which led to establishing an Agenda for Culture. Priorities include developing the cultural and creative industries and specifically SMEs.
EC Commissioner for competition, Neelie Kroes recognises that preferential treatment for SMEs is both “politically and economically justifiable”.
EC starts integrating culture in all other policy areas under the new Agenda for Culture. This “mainstreaming” of culture should open up a new debate to improve traditional policy areas such as competition, internal market, trade and tax etc.
All member states, again, for the first time ever, will meet on a regular basis to discuss not just EC policy, but their own national policies – under the “open method of co-ordination”.
EC holds first ever European Cultural Forum, hosted by the Portuguese Presidency.
France indicates it will support lower VAT on music and will re-open the debate when it takes over the EC presidency in the second half of 2008.
The new EC Treaty elevates cultural diversity and intellectual property as fundamental treaty rights.
Cultural policy decisions to be taken by qualified majority under the new Treaty instead of unanimity of all member states.
The European Commission finally sets precedent in Universal/BMG that major music mergers need remedies, after re-approving Sony/BMG for a second time despite IMPALA’s court victory in 2006.
EC sets out for the first time ever a concrete list of problems regarding Universal’s market power as the worlds biggest record company and publisher, controlling more than half the world’s music (Universal/BMG decision).
French reach groundbreaking agreement on ISP collaboration.
European Court reaches opinion in favour of IMPALA, that it was right to annul the SonyBMG merger.
"Creeping dominance" arguments raised with regulators at EC and national level, following Universal's acquisition of a series of key European independents.
UNESCO Convention on cultural diversity enters into force, becoming part of EC law.
Through the UNESCO Convention, the principle of fair and equitable access to the means of creating, producing, distributing and disseminating music and other cultural expressions becomes part of EC law.
EC President Barroso intervenes (very beginning of the year) in the private copying debate to put an end to the bid to challenge this vital source of income.

After just two years, IMPALA awards reach a total of 500, representing 50million units sold and three quarters of a billion euros.