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WIPO SCCR Welcomes Report on Digital Music Marketplace

From June 28th to July 1st, the 41st session WIPO Standing Committee on Copyright and Related Rights took place. Amongst the topics discussed was the recent publication by Chris Castle and Professor Claudio Feijóo entitled “Study on the Artists in the Digital Music Marketplace: Economic and Legal Considerations”. Participants welcomed the study and requested that the report be a key item at the next SSCR meeting.

As a reminder, the report highlights that the revenue generated from streaming music is distributed disproportionately, with non-featured performers getting nothing and featured performers getting almost nothing : “These market forces have exposed a pronounced imbalance between the significant market benefit to streaming music platforms derived from the world’s performers compared to the relatively scant financial benefit received by these same performers. The systemic imbalance is particularly acute for non-featured performers.”

The report dissects various solutions to this issue and place a clear emphasis on being able to reach equitable remuneration without disrupting the current contractual relationship between producers and performers. The report underlines one particular mechanism - a remuneration right with mandatory collective management: "It seems that the policy goals and principles of equitable remuneration are best fulfilled by a streaming remuneration in the nature of a communication to the public royalty that is outside of any recording agreement, is not waivable by the performer and it is collected and distributed by performers’ CMOs."

The recommendation made by Castle and Feijóo reflects similar findings outlined by leading academic in the field, Raquel Xalabarder, back in October 2020, in which she states that “a verbatim implementation of the principle in Art.18 DSMD is not enough. Member States are expected and obliged to go further implementing, as necessary, “different mechanisms” to effectively secure fair remuneration of Authors and Performers”. Both the Xalabarder and WIPO studies are clear : “(s)tatutory residual remuneration rights, granted by law as unwaivable (and inalienable) rights to receive remuneration subject to collective management (mandatorily, if necessary) and paid by users/licensees remain the best mechanism to secure effective fair remuneration for Authors and Performers, especially in the audiovisual and music sectors.”

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