The EU's Copyright Directive's Article 13 ... And What It Might Mean To The Online Music Biz

Article 13

Last week, the EUROPEAN PARLIAMENT approved COPYRIGHT DIRECTIVE, a major overhaul of copyright law, that could represent a major upheaval in the amount of material uploaded to online giants such as YOUTUBE, GOOGLE and FACEBOOK, reports the HOLLYWOOD REPORTER. One portion of the bill, Article 13, would force online platforms to obtain licenses for copyright-protected content, be it music videos, film and TV clips, which users post on their sites, to compensate artists and rights holders.

The possible result: FACEBOOK and GOOGLE would be forced to share more of the revenue they earn for ads posted with the copyright-protected content, generating millions more in revenue for music companies, filmmakers and media publishers

The possible blowback: In response, FACEBOOK, YOUTUBE and the like could strengthen their upload filters that would proactively block users from posting suspect material -- which some parties would claim to be de facto government-imposed censorship. It could also stifle new competition in the space, making it prohibitively expensive to start up and compete, thereby entrenching the powers-that-be. 

The actual impact of the DIRECTIVE -- which still has quite a ways to go before it becomes law -- could well turn out to be less dramatic than either result or blowback. Nevertheless, both parties aren't about to compromise anytime soon. CISAC, a French-based group that represents over four million creators worldwide, found that digital licensing made up just 13% of overall royalties worldwide -- most of which coming from platforms such as SPOTIFY, which have licensing agreements for the content they stream, and not from user-uploaded content platforms like YOUTUBE, which pay between four and 17 times less for streaming content than SPOTIFY.

“This new law, if enacted as proposed by the EUROPEAN PARLIAMENT, will stop these big platforms from hiding behind outdated laws and force them to sit down with rights holders, wherever they are, and pay them fairly,” CISAC Dir. General GADI ORON said.

And the potential impact from online platforms implementing stronger filters? “It's true that Article 13 might not make specific reference to filtering technology, but practically, the only way to comply with the law will be to put filtering technology in place,” SIADA EL RAMLY, Dir. General of the corporate online platform lobby group EdiMA, said. “The technology is very imperfect, to figure out which kinds of content are allowed under free speech grounds and which are not. There is a very high likelihood that there will be a over-takedown of content.”

Copyright law expert CHRISTOPHER BEALL believes both sides of are guilty of “taking their arguments to the extreme” when it comes to the impact of COPYRIGHT DIRECTIVE and Article 13. YOUTUBE and GOOGLE already have a content licensing system with filters that identify content and share ad revenue for content owners who register with them. So it's not true, as opponents of Article 13 claim, that it's impossible to do,” he said. “It is true that it is very expensive to do.”

BEALL does feel that Article 13 is “far too broad, which makes it too expensive for new players to effectively compete with GOOGLE, FACEBOOK and its peers. “It will lock in the major players — so that will be little to no competition around those kinds of platforms. It's ironic that the Internet giants have been lobbying against it because, really, it's a form of protectionism for them.”

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