Table Of ContentMunich Studies on Innovation and Competition 12
Nikita Malevanny
Online Music
Distribution - How
Much Exclusivity Is
Needed?
A Study of International, European,
German and U.S. Copyright Systems and
Their Objectives
Munich Studies on Innovation and Competition
Volume 12
SeriesEditors
JosefDrexl,Germany
RetoM.Hilty,Germany
Moreinformationaboutthisseriesathttp://www.springer.com/series/13275
Nikita Malevanny
Online Music Distribution -
How Much Exclusivity Is
Needed?
A Study of International, European,
German and U.S. Copyright Systems
and Their Objectives
NikitaMalevanny
Munich,Germany
ISSN2199-7462 ISSN2199-7470 (electronic)
MunichStudiesonInnovationandCompetition
ISBN978-3-662-59698-2 ISBN978-3-662-59699-9 (eBook)
https://doi.org/10.1007/978-3-662-59699-9
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For Katia
Acknowledgements
ThisbookismyPh.D.thesis,writtenattheMaxPlanckInstituteforInnovationand
Competition and the Faculty of Law of the Ludwig Maximilian University of
Munich.
Firstofall,Iwouldlike toexpressmysinceregratitude tomyPh.D. supervisor
(Doktorvater)ProfessorDr.RetoM.Hilty,DirectorattheMaxPlanckInstitutefor
InnovationandCompetition,forhisexcellentsupervisionandconstantsupport.His
visionofcopyrightlawwasagreatsourceofinspirationforthisbook,andthelong
and fruitful discussions with him provided invaluable guidance which made this
bookpossibleinthefirstplace.
IwouldalsoliketothankProfessorDr.JosefDrexl,DirectorattheMaxPlanck
InstituteforInnovationandCompetition,notonlyforreviewingthisthesisassecond
refereebutalsoforprovidinganothergreatsourceofinspirationwithhisconceptof
“creative competition” in the context of collective management of online music
rights.
I owe a huge debt of gratitude to the Max Planck Institute for Innovation and
Competition and the Max Planck Society for the generous scholarship, which
allowedmetofocusonmyresearch,aswellasforgrantingtheprintingcostsubsidy.
ThefinancialsupportoftheInstitutealsoallowedmetoconducta7-weekresearch
stay at theUniversity of California, Berkeley, which was kindly cofinanced by the
BavarianAmericanAcademy.
Inthisregard,IamalsoverygratefultothescholarsImetduringmytimeinthe
U.S.whoprovidedvaluablefeedbackonmyresearch.Inparticular,Iwouldliketo
thankProfessorPamelaSamuelson,whosupervisedmyresearchstayatUCBerke-
ley,aswellasProfessorMark.A.Lemley,ProfessorPeterS.Menell,ProfessorPeter
DiCola, Professor Joel Waldfogel, Professor Kevin M. Quinn, and Dr. Patrick
R.Goold.
Special thanks are due to the U.S.-based musicians who participated in my
empirical study of the U.S. streaming royalties (and whose identity cannot be
revealed here due to the sensitivity of the income topic). I would like to thank all
the people who helped me to reach out to these musicians, in particular Kristin
ThomsonandJeanCookfromtheFutureofMusicCoalition,aswellasPeterJenner,
vii
viii Acknowledgements
AndrewSchwartz,JeannieHopper,DavidWeinstein,MikeFabio,CoreyRice,and
ChristyCrowl.
IwouldalsoliketothankallmyresearchcolleaguesattheMaxPlanckInstitute,
whocontributedtotheuniqueresearchenvironmentthereandwithwhomthePh.D.
time was a truly enriching experience. Apart from my co-supervisors Dr. Sylvie
NérissonandDr.KayaKöklü,IwouldliketoparticularlythankMichaelHäfeli,Seth
Ericsson,Dr.FelixTrumpke,andDr.MinaKianfarforthefruitfuldiscussionsand
valuablecomments.
Iamdeeplygratefultomyparentsandmysisterfortheiremotionalsupportand
encouragement,whichgreatlyhelpedmetoaccomplishthethesis.
Finally,IwouldliketoexpressmydeepestgratitudetomywifeEkaterinaSokur.
Herlove,overwhelmingsupport,patience,andcarecontributedsignificantlytothe
completionofthisproject.Thisbookisdedicatedtoher.
Munich,Germany NikitaMalevanny
March2018
Contents
1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A.Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B.ResearchQuestionsandMethodologicalRemarks. . . . . . . . . . . . . . 2
C.Terminology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
D.IssuesBeyondtheScopeofThisStudy. . . . . . . . . . . . . . . . . . . . . 4
E.HowIsThisStudyOrganized?. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
PartI OnlineMusicDistribution:CurrentLegalSituation
2 RelevantOnlineMusicUses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
A.Downloading:PermanentandLimited. . . . . . . . . . . . . . . . . . . . . . 9
B.Streaming:InteractiveandNon-interactive. . . . . . . . . . . . . . . . . . . 11
3 RelevantRightsandTheirApplicabilitytoOnlineMusicUses. . . . 13
A.InternationalLaw. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
I. RelevantRightsofAuthorsinMusicalWorks. .. . . . . .. . . . .. 14
1.BerneConvention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
a)ReproductionRight:Art.9(1). . . . . . . . . . . . . . . . . . . . . 15
b)CommunicationRights. . . . . . . . . . . .. . . . . . . . . . . . . . 17
2.UniversalCopyrightConvention. . . . . . . . . . . . . . . . . . . . . 19
3.TRIPS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.WCT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
a)ReproductionRight. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
b)CommunicationtothePublic,IncludingMakingAvailable
onDemand. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
c)DistributionandRentalRights. . . . . . . . . . . . . . . . . . . . 23
II. RelevantRightsofPerformersinPerformances. . . . . . . . . . . . . 25
1.RomeConvention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.TRIPS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.WPPT. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ix
x Contents
III. RelevantRightsofPhonogramProducersinPhonograms. . . . . 30
1.RomeConvention. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.GenevaPhonogramsConvention. . . . . . . . . . . . . . . . . . . . . 30
3.TRIPS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.WPPT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
B.EuropeanLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
I. RelevantRightsofAuthorsinMusicalWorks. .. . . . . .. . . . .. 32
1.ReproductionRight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
a)BroadReproductionRight. . . . . . . . . . . . . . . . . . . . . . . 32
b)MandatoryExemptionforTemporaryReproductions. . . . 33
2.CommunicationtothePublic,MakingAvailableonDemand,
DistributionandRental:ConfusingQualification. . . . . . . . . 37
II. RelevantRightsofPerformersinPerformances. . . . . . . . . . . . . 40
III. RelevantRightsofPhonogramProducersinPhonograms. . . . . 42
C.GermanLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
I. RelevantRightsofAuthorsinMusicalWorks. .. . . . . .. . . . .. 42
1.GeneralBroadExploitationRights:Sec.15UrhG. . . . . . . . 43
2.ReproductionRight:Secs.16and44aUrhG. . . . . . . . . . . . 43
3.MakingAvailabletothePublic:Sec.19aUrhG. . . . . . . . . . 44
4.Broadcasting:Sec.20UrhG. . . . . . . . . . . . . . . . . . . . . . . . 45
5.DistributionandRental:Sec.17UrhG. . . . . . . . . . . . . . . . . 47
II. RelevantRightsofPerformersinPerformances. . . . . . . . . . . . . 48
III. RelevantRightsofPhonogramProducersinPhonograms. . . . . 49
D.U.S.Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
I. RelevantRightsofAuthorsinMusicalWorks. .. . . . . .. . . . .. 50
1.ReproductionRight:Sec.106(1)CA. . . . . . . . . . . . . . . . . . 51
2.PublicPerformanceRight:Sec.106(4)CA. . . .. . . . . . . . .. 53
3.DistributionRight:Sec.106(3)CA. . . . . . . . . . . . . . . . . . . 55
II. RelevantRightsofPerformersorProducersas“Authors
ofaSoundRecording”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
III. SpecialCase:RelevantRightsofMusicPublishersandRecord
CompaniesasOwnersofCopyrightinMusicalWorksorSound
RecordingsinCaseofa“WorkMadeforHire”?. . . . . . . . . . . 60
E.ComparativeAnalysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
I. RightsofAuthorsinMusicalWorks. . . . . . . . . . . . . . . . . . . . . 62
1.InternationalLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
2.EuropeanLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
3.GermanLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.U.S.Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
II. RightsofPerformersandPhonogramProducersinRespective
Subject-Matter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
1.InternationalLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
2.EuropeanLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
3.GermanLaw. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
4.U.S.Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
