Recommendations / Guidelines

Due to the continuing market decline in the field of offline mechanicals, collecting societies are facing specific challenges with regards to the efficiency of the administrative processes. This dynamic has been significantly intensified once again, especially with the onset of the health crisis in 2020, which has made the challenges even greater. While facing these circumstances, collecting societies also have a corresponding responsibility towards the music industry as a whole and, in this respect, also towards the market participants in this sector.

Against this background, the BIEM Management Committee issued a mandate to the Management Advisory Committee in December 2020 to prepare a recommendation on relevant aspects of flexibilisation within the BIEM/IFPI Standard Contract. The subject of this recommendation is an analysis of the national situation in the individual European markets, in which collecting societies are pursuing different approaches to increase efficiency due to the different maturity of the market decline.

In this respect, the approaches presented here are intended to point out possibilities for increasing flexibility to bring about improved efficiency, which can ultimately be implemented on the national level. In the context of national implementation, attention must be paid to a competition law assessment in the respective market. The aim and assumption of this recommendation are not to create any competition-distorting measures but to also preserve and benefit the competition amongst record producers. For the avoidance of doubt, it is clarified that this is a non-binding recommendation.

All of the recommendations presented here:

1.  follow the guiding principle of optimally exercising the exploitation of authors' rights in the network of collecting societies and, in this respect, aim to achieve an increase in efficiency and flexibility in connection with a member-centred optimal provision of services using the BIEM/IFPI Standard Contract. This principle should also and in particular be upheld with respect to the implementation of the recommendations on a national level. Given this background, the societies agree that the suggestions presented are aimed in particular at contracts that are of low value in order to minimise the impact on society distributions to members.
2. are intended to avoid additional negotiations with IFPI. In this respect, the aspects presented here also aim to benefit the producers by avoiding any unnecessary burdens when they are already fragilised by market challenges, with a view to preserving competition on the market without distorting it. For an agreement with producers on a national level, it is recommended to reach an agreement in the form of a side letter to the BIEM/IFPI Standard Contract. Producers which are not affiliated with IFPI but which are facing similar challenges should be awarded the same level of flexibility. In this respect, no flexibility should be given to producers affiliated with IFPI where producers without an affiliation to IFPI cannot benefit from it.

Download  the full recommendation (English & Français)

Recommendation for an alternative interpretation of the Standard Contract re. Calculation of Minimum for Box Sets

Bearing in mind that:

• The Standard Contract allows two different interpretations of the calculation of the minima applicable to the various categories of carriers;
• The Societies decided to apply to box-sets as many times the CD Album minimum as the number of carriers contained in the box set;
• The application of this rule implied a royalty much higher than the 8,712% which have created a legal risk vis-à-vis the producers and is nonrealistic from an economical viewpoint.

Bearing also in mind that this rule may be considered as an obstacle to the development (or to the mere existence) of this market.

The above remarks make the rule inapplicable as such and tend to lead to the development of individual national solutions, the Management Committee recommends to introduce new carrier categories covering the Box-sets containing:

•   2 Album CDs (Code: BX2) - up to 160mins – 40 works or 80 fragments
•   3 Album CDs (Code: BX3) - up to 240mins – 60 works and 120 fragments and;
•   4 Album CDs (Code: BX4) – up to 320mins- 80 works and 160 fragments

Terms and conditions of the Standard Contract are applicable to these new categories of products, each being then considered as a unique product. Their respective minima for TOP price or Budget price products shall in consequence be calculated on the basis of the so-called ‘most practiced’ PPD of the box set provided for in the Article VI (1 and 1bis) of the Standard Contract.

For Box-sets containing more than 4 CDs, it is proposed to follow the rule described above except in particular cases where an agreement between the local society and the producer is required.

For any other combination of product the calculation of the royalty and the minima still depend on each carrier included in the box sets.

This recommendation approved by the General Assembly (London, 5 June 2014)  comes into effect as at 1st January 2014.

Having been informed of requests from the industry to extend the introductory allowances provided for Minidisc (MD) and Digital Compact Cassette (DCC) in the BIEM/IFPI Standard Contract, the Tariff Committee recommends not applying the discount beyond the sound carriers mentioned in the Standard Contract.

If there is some specific reason that the scope of application should be broadened to new carriers, the matter should be first referred to the BIEM Tariff Committee before discussing and agreeing on it.

Proposals of clauses to clarify the responsibility for the payment of MR for AV productions

Repeatedly collecting societies are faced with problems regarding the payment of mechanical reproduction royalties collected for the reproduction of musical works in audiovisual productions. Those problems appear due to the fact that the main actors in the process, namely the publishers, the producers and the distributors of audiovisual productions, refer to each other when mechanical reproduction royalties need to be paid.

The problem is often driven by vague and/or ambiguously formulated clauses regarding the scope of the licensed copyright authorization in, on the one hand, the contract between the publisher of a musical work and the producer of the audiovisual production, and, on the other hand, the contract between the producer and the distributor of that audiovisual production.

Because of this, the producers and the distributors could believe that no copyright needs/remains to be paid to the collecting societies as all the copyrights were covered in the contract with the publisher. Or the distributor of the audiovisual production could believe that the mechanical reproduction royalties owed for the reproduction of a musical work were already paid by the producer to the appropriate collecting society.

In order to remedy this problem, it seems appropriate to formulate three examples of standard clauses [1] which can be used in the different contracts between the publisher, the producer, the distributor and the collecting society. It may also raise the awareness of those actors with a view to clarifying the situation regarding mechanical reproduction rights. 

Link to the examples of clauses by type of contract:

1. The contract between the publisher and the producer
2. The contract between the producer and the distributor
3. The contract between the ditributor and the collecting society

[1] The clauses formulated in this document are meant as a source of inspiration and are in no way obligatory to use. The clauses will always need to be adapted to meet the specific requirements of a contractual situation.
 

Download the  document

In application of Article 7 of the BIEM Statutes, the Management Committee recommends to apply the following terms and conditions to High Capacity (HC) discs. The Management Committee is aware of the fact that some national agreements are already in place and, therefore, suggests that they be replaced, when possible, taking into account the present recommendation.

Applicable terms and conditions:

1. When the disc reproduces the content of an equivalent DVD format, the applicable terms and conditions shall be the same as those in force for the corresponding audiovisual DVD (Music Video, Film, Documentaries, etc).
2. HC discs mainly reproduce a movie plus bonus tracks. However, some societies have received applications for licence for HC disc containing a music video in addition to the normal movie tracks (f.e. a movie and/or bonus plus its original soundtrack). See for example copy of the blu-ray cover of the film Old Boy from Wild Side Video enclosed herewith.

In this case, the major question is to deliver a licence under the most appropriate terms and conditions taking into account their several types of contents traditionally reproduced on separate carriers generating each time a specific licence and a specific remuneration are now included in a single HC disc.

In that case the applicable terms and conditions are:

• The royalty rate applicable to a Music video DVD shall apply only to the music video content,  the royalty rate applicable to a Film DVD shall apply to the movie part and/or bonus tracks;  
• The PPD shall be split according to the duration of each type of content;
• Prorata temporis shall apply with respect only to the musical content and only for public domain and non member works;
• The reproduction of the same work in different works/uses as film and music video shall therefore lead to an increased remuneration due to the application of the corresponding royalty rates and to the application of combined minima (music video DVD  minimum plus film DVD minimum) and shall take into consideration the number of tracks/minutes effectively reproduced.

Term of the Recommendation:
The recommendation applies as of its adoption by the General Assembly (Bilbao, 8 June 2010) for one year. Some guidelines for its application will be soon proposed.
The recommendation will be subject to an evaluation in order to introduce changes in one year time if/where needed.

 Download the Recommendation and its enclosure

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The BIEM Management Advisory Committee (“MAC”) questioned on its position following video producers'requests to conclude a specific agreement for music videos sold directly to the consumers when the retail price is the only available basis for the calculation of the royalty (no PPD).

In the audio contract the calculation on the consumer price end up at 7,4% which is 82,14% of 9,009% - MAC propose to apply the same parameters in the music video agreements (% on the PPD x 82,14%).

Bundled Music DVD

As a complement to the previous recommendation on Bundles, the Tariff Committee recommends to not apply a degressive* minimum in case of bundled DVDs.

*This practice consists in lowering the minimum per DVD according to the number of DVD included in the bundle.

Bundles

Enhanced-CD, or E-CD is a type of hybrid carrier [1], aiming at providing bonus non-musical extra content.

Being the Enhanced-CD analogous to a regular audio CD, the BIEM Standard contract provisions for audio products apply.

[1] Enhanced-CD is a one-side optical audio disc, based on CD technology, with multimedia capability on dedicated ROM tracks.

In accordance with the Article 7 of the BIEM Statutes, the Management Committee recommends the Collecting societies to apply the same rate as for audio products to music video DVD, but given the current state of the market regarding prices, content, volumes, the desired level of the royalty should be a minimum net rate of 7% on the PPD or 5,75% on the fixed or suggested retail price. This rate will be regularly reviewed in light of the changes in the framework of the market situation.

The following shall also be taken into consideration:

1. No pro-rating other than in relation to musical works and / or any other category of work entrusted to the BIEM member for management of the mechanical reproduction rights;
2. Local conditions should apply as appropriate subject to the following:

• limitations in relation to works and fragments and their duration should be reasonable and take into account the technical specificities of the carrier;
• any minimum royalty should reflect the local market situation;
• no allowance shall be granted for TV advertised products, a reference should be made to the decision of the German Schiedstelle (dated 6 November 2000) to support this position;
• any returns provisions must be reasonable.

The Management Committee acknowledges that in some specific territories, the jurisdiction, negotiations and legislation could allow for a revision upwards of the rate in case the market situation changes.

Nothing in this recommendation should prejudice the current position of the societies in the current application, revision or negotiation of their tariffs.

Download the Recommendation

During its meeting in Rome in September, the Management Committee of BIEM endorsed the de facto existing category of two-track CD. This category, already in the chart called BIEM/CISAC Carriers’ Codes foresees the application of the following conditions: 12 minutes, 2 works and 6 fragments.

Preliminary comments

Societies subject to a statutory and compulsory licence or to a court/arbitration proceeding are not bound by the present recommendations in accordance with Article 7(4) of the BIEM Statutes.

The following aspects may have influence on royalty calculation in regard to all of the recommendation:

• the representation or non-representation of other categories of right owners;
• the necessity to license synchronisation right, where such right exists.

General remarks

• to introduce provisional scheme to be used until 31 December 2004;
• this scheme only applies to normal sales and not to rental;
• the license agreements should contain the provision that the license is considered granted only after payment of the royalty;
• the question of international negotiations through BIEM should be investigated;
• any possible new technology discount can only be considered at the BIEM level.

The following wording was agreed by the committee for DVD with non-music prevailing content:

• a. Audio-visual productions : such as TV programs, educational and training programs, etc.
• b. Feature Film : Film videos covering motion pictures on video (films on video) TV-films on video, TV-series on video and video films produced for video exploitation. Cartoons and animated Films can also be feature films.

Given the fact that the licensing conditions in force for this kind of usage are very different from country to country, it is not possible at this moment to recommend a coherent licensing structure. Societies are therefore recommended to negotiate with their users a rate for DVD that recognizes the greater quality and value of the usage as compared to pre-existing formats.

Preliminary comments

Societies subject to a statutory and compulsory licence or to a court/arbitration proceeding are not bound by the present recommendations in accordance with Article 7(4) of the BIEM Statutes.

The following aspects may have influence on royalty calculation in regard to all of the recommendation:

1. The representation or non-representation of other categories of right owners;
2. The necessity to license synchronisation right, where such right exists.

General remarks

• these are provisional schemes to be used until 31 December 2004;
• the schemes only apply to normal sales and not to rental;
• the license agreements should contain the provision that the license becomes effective only after payment of the royalty;
• the negotiations should be conducted by BIEM;
• any possible new technology discount can only be considered at the BIEM level;
• subject to article 7(4) of the BIEM’ Statutes and notwithstanding BIEM’s exclusive competence in this field, existing local agreements may continue provided their terms and conditions are at least equivalent to the ones set forth below.

The following wording was agreed by the committee for products with music prevailing content:

a. DVD-Audio, SACD, Enhanced CD (can be considered analogous to a regular audio carrier perhaps containing a few audiovisual tracks) and audio content only.

Recommended licensing terms: the BIEM Standard contract provisions for audio products applying a pro rata temporis reduction only with respect to the main program and only for public domain and non-member works.

b. DVD-Video* including but not limited to :

• live music performances (e.g. concerts)
• a single or compilation of pop promo videosprogramming which has music as its primary theme
• a music awards event
• or any combination of the above.

* For Music DVD, please refer to the recommendation adopted by the Management Committee in November 2006

Carriers with MP3 Files
Recommended licensing terms: apply 11% headline rate on the PPD (or 8% on the retail price) with a minimum per work per 5 minutes calculated as 8,33% of the normal minimum for CD LP products (assuming 12 tracks average per CD), applying a pro rata temporis reduction only with respect to the main program and only for public domain and non-member works.