The Government has proposed legalising the format shifting of
music to computers or MP3 players as long as the CD was paid for,
the transfer happens just once and is for personal use only.
Currently the practice, which is near ubiquitous amongst MP3 player
owners, infringes copyright.
The Music Business Group (MBG) is an umbrella group of trade
bodies representing music managers, songwriters, publishers and
performers. It comprises organisations like BPI, AIM and MCPS-PRS.
It has rejected plans contained in a consultation document issued
by the UK Intellectual Property Office (UK-IPO) to allow the
transfer without any extra charge being levied.
"Enormous value is derived from the transferability of music,"
it said in its submission. "Last year alone, over 20 million
MP3-capable portable devices were sold in the UK, and over 90% of
music on the average MP3 player is music that has been copied."
"UK creators and right holders are legally entitled to benefit
from this value. At present, this value is enjoyed by both
consumers and technology companies while creators and right holders
are effectively excluded from any value. This constitutes market
failure," it said.
Copyright law in the UK currently does not allow users to copy
music to their MP3 players from previously bought CDs. The European
Union's Copyright Directive gives countries two options on private
copying. They can ban it or they can allow it on condition that
they introduce a system that ensures "fair compensation" for rights
holders. Many countries charge a levy on blank media and devices as
a form of compensation.
The exemption for format shifting for private use is one of the
recommendations of the report into copyright reform produced in
2006 by former Financial Times editor Andrew Gowers.
The MBG has proposed a levy on the devices that might play
transferred music, principally MP3 players. That levy, or licence,
would be set not by the Government but by industry in
negotiations.
"The licence fee would be determined by commercial negotiations
between creators and right holders and manufacturers and
distributors of devices substantially used or marketed for making
copies of music," said the MBG's submission to the UK-IPO.
"We need to redress the balance which underpins copyright – one
that allows consumers to enjoy their music, drives technological
innovation, yet recognises music creators’ and right holders’ place
in this market," said the MBG. "Our proposal creates an
easily-implemented, flexible, future-proofed and transparent
solution."
In producing his report and recommendation that format shifting
be permitted, Andrew Gowers suggested that if rights holders wanted
compensation for the practice they should raise their prices.
The Government in its proposal said that it does not believe
that the levy-free exemption would break the EU's laws. It said
that it was a "fair balance between the interests of consumers and
those of right holders".
The Government pointed to the Copyright Directive's introductory
wording, which said that "in certain situations, where the
prejudice to the right holder would be minimal, no obligation for
payment may arise".
The consultation said: "The exception proposed in this paper is
very narrow in scope and, therefore, we consider that there would
be no obligation for payment under the Copyright Directive for a
limited format shifting exception, as there is no significant harm
to the right holder which would need to be compensated."
