Music Royalty Reform Delays ‘Hold Back’ Labels; A DRM-Free Price War

Music companies want Europe to overhaul its music licensing systems to better cope with digital distribution – but the European Commission has no plans to do so any time soon, says this cryptic Reuters story. Rules stating national governments should allow musicians in their borders to use royalties collection societies from any EU country are currently voluntary only, so not applied in a majority of countries. Interested parties are frankly split on the issue – the labels want consolidation of collection societies to make negotiating online rights more efficient (Universal Music Group is quoted as saying it is “held back” and Europe is “lagging behind”) while MEPs want to protect cultural diversity and competition, fearing concentration of ownership amongst just a few super-collectors. The bottom line – Europe would like to revise the rules, but has no date in its diary to do so.

Meanwhile, compensating artists would seem all the more pressing given the race to shed DRM and move back to the clean MP3 format. UK online music retailer 7digital yesterday started what it is was a Christmas price war with Apple (NSDQ: AAPL) iTunes, dropping the price of its MP3 tracks to £0.50 (against iTunes’ £0.79) and some albums to £5 (ie. £0.10 a track). MP3s now make up 70 percent of 7digital’s repertoire and, as the vendor strikes more white label deals with the likes of The Sun and ITV, in addition to its deal to facilitate’s commercial downloads, it’s clear a move away from DRM is firmly underway.