The European Union called on Europe's music industry Wednesday to create EU-wide copyright licenses for online music, saying this would boost demand for legal downloads.
"These licenses will make it easier for new European-based online services to take off," EU Internal Market Commissioner Charlie McCreevy said.
Music copyrights are currently collected by national agencies, but the emergence of online music services such as Apple Computer Inc.'s iTunes means there is growing demand for a license that covers all 25 EU nations.
The European Commission said the absence of bloc-wide copyright licenses has been one factor that has made it difficult for new Internet-based music services to develop their full potential.
Apple has to obtain separate licenses for each song in every EU country to offer it to all Europeans, which could cost it up to 475,000 euros ($569,000) per song, the commission said. In practice, this means that users in some countries have a much smaller catalogue to choose from.
Last year, online music sales in the EU reached 27 million euros ($32 million), far below the booming U.S. market which reported 207 million euros ($248 million) in sales.
McCreevy warned the music industry that, at this stage, he is merely asking them to develop licenses. "I will be monitoring the situation closely and, if I am not satisfied that sufficient progress is being made, I will take tougher action," he said.
The commission said it wants to give rights holders and commercial users of copyright material the choice between two options. It said commercial users and rights managers backed the first option allowing the national agencies that collect copyright payments to grant an EU-wide license.
Music publishers, independent record labels and some collective rights managers wanted to give copyright holders the choice to appoint a rights manager for online use in the EU.
McCreevy said last week he saw music copyrights as a test case which could lead to single licenses for books and films.