EU copyright law plan angers Radiohead, Pink Floyd

BRUSSELS (Reuters) - A proposed EU law to give musicians more rights over their royalties has angered bands like Radiohead and Pink Floyd, who accused the European Commission of breaking promises to tackle the problem of musicians' missing pay.

The Commission announced a draft law on Wednesday designed to make sure that the firms collecting music royalties on the behalf of artists also hand them over to the performers, composers and producers involved in making a piece of music.

'We are deeply disappointed by your choice to defend the interests of a minority of managers and stakeholders,' said a letter signed by Pink Floyd's Nick Mason, Radiohead's Ed O'Brien, British singer Sandie Shaw, producer CJ Bolland and the director of Younison, an artists' lobby, Kelvin Smits.

By the Commission's own assessment, collection societies -- up to 250 of which operate in Europe -- keep 'substantial amounts of money' on their books, pending distribution.

In an impact assessment made ahead of Wednesday's announcement, the Commission said that in 2010 major societies owed 3.6 billion euros ($4.41 billion) in royalties to the creators.

Artists say that figure is in fact much higher and that societies have no incentive to pay up quickly, because of the returns they can make on the money in their hands.

Some 5-10 percent of payments are kept for as long as three years after they were collected, the Commission said.

The draft law, which will need approval from the European Parliament and the EU's 27 member countries, says societies have 12 months after the financial year in which a song was played to pay royalties.

And funds whose royalty-owner remains unidentified could be kept by the collecting society after five years.

'You have broken your promises and encourage the management of collecting societies to keep the fruits of our creativity,' read the artists' letter to the Commission.

'You stole our hopes.'

The artists say the five-year grace period will only encourage the collecting societies to keep the money they owe, and reduces the incentive to find the rights-holder.

'You thus legitimize one of the most problematic forms of embezzlement adopted by some collecting societies in Europe,' their letter reads.

Societies say they try to pay rights-holders as quickly as they can and that many already pay their members much quicker than the draft law demands.

PRS in Britain makes payments every three months, said Veronique Desbrosses, the secretary-general of GESAC, which represents 33 collecting societies in the European Union.

'And sometimes it's difficult to find the rights-holders because they are all over the world,' she added.

The law also aims to tackle piracy by expanding the amount of music which can be played by online companies like Apple's iTunes that need licenses from the societies before they can offer their services.

To date, iTunes is the only online mainstream music vendor available in all 27 EU member states, the Commission report says. ($1 = 0.8160 euros)

(Editing by Rex Merrifield and Mark Heinrich)