EC TO RECOMMEND SCRAPPING COPYRIGHT LEVIES

Euro directors join battle for copyright levy
By Leo Cendrowicz
Nov 7, 2006

BRUSSELS - Ken Loach, Mike Leigh, Lars von Trier, Pedro Almodovar and other film directors on Monday appealed to the European Commission to maintain the copyright levy imposed on consumer electronics.

In an open letter, the directors urged the European Union's executive authority not to abolish the levy, imposed since the 1960s, which aims to compensate artists for the private copying of audio and audiovisual works.

"Creators should have the right to be fairly compensated for their work when it is being reproduced," they said. "While consumers have the ability to copy films, film directors should be able to exercise their right to perceive a compensation for such usage."

The EC is due to formally unveil reforms of the levy before year's end. The draft proposals currently circulating within the EC do not call for an immediate end to the levy, but make it clear that it could and should be scrapped within a few years. EC officials argue that the levy hampers IT companies developing new products and is an archaic throwback to an era of cassette recorders and photocopiers.

The letter -- also signed by Costa Gavras, Jean Pierre and Luc Dardenne, and Nanni Moretti -- says that efforts to transform the levy into a digital rights mechanism (DRM) have so far failed.

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"We fail to see how DRM will be a substitute to this right whose implementation is € 560 million ($712.3 million) a year to the creative industries in Europe," they said. "In the absence of effective technology systems, there is no other alternative for right holders to be compensated. Free availability of content should not be a business model encouraged by the ICT industry to support the roll out of digital technologies at the expense of our creations."

The levy compensates artists for private copies of DVDs, CDs, books and other media products. It is paid by such consumer electronics companies as Apple, Siemens, Nokia and Sony on goods ranging from iPods and DVD players to mobile phones and PCs. However, it is currently applied in just 20 of the EU's 25 member countries, and the rates vary widely amongst them.

The directors said the levy was meager compared with the revenues of the IT industry, but was vital for the European film sector, struggling to raise finance. "Even if the compensation that we receive in relation to the private copying is limited, it still represents an important source of remuneration," they said.

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By Leo Cendrowicz
From Hollywood Reporter
November 01, 2006

«The European Commission is expected to recommend that copyright levies imposed on consumer electronics in Europe be reduced to a minimum, saying they are often redundant in today's technological environment.

In a document obtained by The Hollywood Reporter, the EC says that consumers often are forced to pay copyright fees when they buy personal computers or MP3 players, and again when they download music legally online. However, the proposal balks at actually scrapping the levy, instead calling for an overhaul of the diverse copyright collection systems in the European Union's different member states.

The EC draft recommendation also encourages more efficient use of digital rights management and favors a lump sum annual payment from the consumer electronics industry rather than the levy.

The EC -- the EU's executive authority -- has launched an internal consultation on the document and should publish it before the end of the year. The latest draft states that "no obligation for further payment in another form may arise in relation to the private copying by the consumer" following an initial fee.

The consumer electronics companies say that slashing the levies could save hundreds of millions of euros every year for such companies as Apple, Siemens, Nokia and Sony on products ranging from iPods and DVD players to mobile phones and PCs.

The scope and extent of copyright levies varies from country to country. France, for example, applies a levy of €51 ($65) on an iPod with 4GB memory. Germany has a levy of €2.7 ($3.4) on the same product, while the Netherlands and Belgium impose no levies on iPods at all.

Paloma Pertusa, of independent record label lobby Impala, said the proposals effectively signaled the end of the levies. "It does not say so directly in the recommendation, but says so indirectly," she said. "This proposal obviously reflects the concerns of the ICT sector far more than of rights-holders."

The recommendation says that the levy system should be operated more openly and reflect the actual copying and piracy levels recorded by the industry, not levels that are merely speculated at. It also calls on EU governments to ensure that the amount of fees "takes into account the degree of use of a technological measure by comparing the licensed use with any other actual use on a sliding scale."

Mark MacGann, director general of EICTA, the European information and communication technologies association, said this was only a momentary pause in the campaign to end the levies.

"I can understand that the commission might feel that scrapping the levies is too much hassle right now, especially given the hysterical recent comments by certain artists about the issue," he said. "But this is a stepping stone, and the issue has gone beyond the point of no return. Once you accept that there can be no 'double dipping' -- no double payment for copyright -- then you accept that there should not be levies on legal content."

MacGann said he expects the levies to be gone in about 2-3 years. "Why should an iPod bought in France have a €51 copyright levy on it when it already has copyright protection measures to ensure legitimate content?" he said. »