Copyright term extension – music to some ears

October 24, 2011

The recent (12th September 2011) copyright extension, by the European Parliament and Council, of copyright in sound recordings and performances from 50 to 70 years, was greeted with mixed and often contrasting reaction. For example: It was described as a “brilliant moment” by General Secretary of The Musicians Union and as “a cultural disaster” by Jim Killock of the Open Rights Group.

The UK government backed the extension which ought to surprise, as the UK government commissioned the Hargreaves Review on IP & Growth, which reported in May 2011, and which appeared to be arguing against copyright term extension referring to the need for economic evidence. The Gower’s Review another government commissioned review in 2006 had been more specific in its argument against term extensions.

photo of Ed Vaizey, who was in favour of the extension, by Dept of CM&S on Flickr CC BY NC ND

The lobbying on this issue from the music industry has been indisputably vocal. As Music Week states: “The industry – backed by Music Week’s Extend The Term campaign – has waged a skilful, but difficult lobbying exercise, to first persuade the UK Government of the merits and economic benefits of copyright term extension, and then push the legislators in Brussels in the right direction.”

The legislators were indeed “pushed in the right direction’” and the Directive passed by 17-8 votes. Belgium was one of the states that voted against the extension referring to “a negative impact on the accessibility of cultural material” for consumers as one of its arguments.

The proponents for the term extension point to the hard pressed session and ‘non-superstar’ featured artists who stand to lose out on vital royalties at their most vulnerable stage of life if the copyright term remained at 50 years. The Council of the EU referred to how some performers “face an income gap at the end of their lifetimes”.

Proponents for the term extension also argue that the resulting royalties will be reinvested to support fresh talent. They point to provisions in the Directive such as: a record label financed fund for musicians who signed away their rights when a recording was made; a clause to allow performers to renegotiate contracts with record labels after 50 years; a provision to enable artists to regain their rights to a recording if their label is not marketing or making the recording available to the public; as all being illustrative of a fair deal for the artists.

Many well-known artists have welcomed the extension.

However, not all musicians are convinced. Ed O’Brien of Radiohead who is also one of the leaders of the Featured Artists Coalition, a British group that advocates for musicians’ rights referring to the term extension said: “It means they have 20 more years in servitude to contracts that are no longer appropriate to a digital age.”

And Sandie Shaw said: “This is extremely good news for record companies and collection agencies, but bad news for artists.”

Some experts studying the issue also remain unconvinced that the artists are going to benefit. Martin Kretschmer, Professor of Information Jurisprudence and Director of Centre for Intellectual Property Policy & Management at Bournemouth University says: “72% of the financial benefits from term extension will accrue to record labels. Of the 28% that will go to artists, most of the money will go to superstar acts, with only 4% benefitting those musicians that the European Council claims is facing “income gap at the end of their lifetimes”

The percentages Professor Kretschemer quotes are difficult to ignore. I am able to appreciate the arguments of the rights holders of the works of certain ‘superstar’ artists (such as the Beatles and Rolling Stones) not wanting to lose revenue from lucrative catalogues when their copyright expires. Importantly however the beneficiary artists and rights holders are very few in number. The change in the law benefits a relatively small number of people but affects a large number of artists and members of the public, with any significant sums of revenues going to the rights holders (the record labels) and superstar artists. Not for the first time we have an example of copyright policy and law being changed to benefit a few but affecting the many, copyright term being extended upwards rather than down in order to align with terms existing in other jurisdictions. Professor Hargreaves’s plea for evidence based policy on intellectual property appears to have been unheeded by the UK government.

It’s been said that if the term extension Directive had not been voted through there was a risk of hits from the Sixties being “lost to the public domain” the counter argument is that now the Directive is to be implemented the public domain has been deprived of the hits as well as the “non-hits” that may have been re-discovered and released.

I remain unconvinced that smaller artists will benefit due to the term extension and can’t argue with Jim Killock of the Open Rights Group who says “It puts money into the pockets of big labels – it’s unlikely to benefit smaller artists”

The music industry comprises of a myriad of players in a labyrinthine landscape which includes the performer, producer, the record label, collection societies. This complex network is further complicated by copyright law. Accounts of declining revenues in the music industry are common place, blamed on copyright infringement more often than not. Arguably new business models are needed and slowly evolving.

Looking at this complex picture very simplistically, I personally would like to see the artist enjoy more freedom over her creative work; to be able to exercise more flexibility over it that would allow her to make better use of the online opportunities for self-promotion. If artists assign their copyright to record labels or collection societies as is usual in the UK and generally in Europe, they are not able to share their own works for free by licensing it say under a non-commercial creative commons licence. This form of self-promotion may not be suitable or necessary for the super-star block buster type of artist but for those artists that don’t fall into that category (the majority) may benefit from the viral nature of digital sharing. The way the music industry is structured and the contractual relationships between the artists and the record labels and collection societies don’t currently appear to make it easy for the artists to explore such opportunities.

Photo of CC by Kalexanderson on Flickr CC BY SA

Amongst the examples of artists who have used creative commons licence to good effect include Curt Smith formerly of Tears for Fears who is a great proponent of Creative Commons (CC) licences for his music.

Photo of Curt Smith by Randy Stewart on Flickr CC BY SA

Nine Inch Nails is another often cited example. There are numerous others on the CC website

A very interesting illustration of evolving business models in the music industry is provided by Brian Message who is an accountant turned music manager and investor. Message used to manage Radiohead amongst other well-known names and is only too aware of the new way of doing things in the music industry: “Under the new way of doing things, you’re a chief executive of an artist’s business with multiple revenue streams that go across multiple countries,” he says.

In contrast to the usual deals entered into by artists the bands Message signs get to keep ownership of their work. The contract is a so-called “360 deal”: all income – from records, concerts, merchandise, commercial tie-ins, everything – is split between band and backers, after the initial investment has been repaid.” Message explains “We’re trying to get away from a copyright trading model more towards a venture capitalist approach with artists”. This is a start-up model of entrepreneurial musicians which is very interesting and crucially the artists retain the rights over their creative works. Rights ownership is the crucial thing – this provides the freedom the flexibility and the control.

There are some interesting copyright challenges percolating in the US relating to who should own the rights and for how long. The New York Times reported on September 12th:“The copyright law approved by Congress in 1976 includes a provision, known as “termination rights,” that allows recording artists and songwriters to reclaim ownership of their work after 35 years.

Many American musicians, who made recordings in the 1970s, including Bob Dylan, Tom Petty and Loretta Lynn, are now filing such claims. The four major labels — Sony, Universal, EMI and Warner — are strenuously resisting, arguing that the performers were employees doing “work for hire,” and thus not entitled to claim copyright.”

This development is worth keeping an eye on.

Photo of singer by Joe Abbruscato on Flickr CC BY NC

It is worth noting that the European Commission had originally proposed an extension to a term of 95 years from the existing 50 years. So the extension to 70 years is a minor concession. Organisations such as Electronic Frontier Foundation (EFF) and the Open Rights Group (ORG) should take credit for their efforts in this regard.

Other vocal opponents to the extension included Christian Engström, Pirate MEP.

Bizarrely much of the evidence that the European Commission relied on proposing the Directive appears to have been sourced from the British Phonographic Industry.

It is not clear if or how much awareness or interest in the term extension there is amongst the general public. There may be a lack of awareness of the significance of the changes to the law amongst the public. At the time Lord Mandelson, the then UK Business Secretary announced the Digital Economy Act in October 2009, there was a suggestion there would be a drive to raise public awareness about copyright and copyright infringement. This was promised by the government in order to address cases of copyright infringement covered by the provisions of the Digital Economy Act. This awareness raising has yet to happen. At the time the Digital Economy Act was voted through (in April 2010) by parliament in the final days of the previous Labour government, there was palpable outrage and objection at some of the controversial parts of the Act, amongst online communities (e.g. Twitter) while the awareness or concern amongst the members of the public was not apparent. It is arguable that more needs to be done to ensure the public are more aware of the value of the public domain and the consequences of the changes in law such as this term extension that is depriving the public domain.

There appears to be two groups of people who will benefit as a result of the extended term: the record labels and the multi- millionaire mega-acts/artists. I personally struggle to be convinced by the argument that the session artists and the non-superstar featured artists benefit at any notable level.

The Guardian provides some sobering figures “figures estimated by a group of economists, intellectual property experts and music academics who studied the effects of copyright term extension: “the typical performing artist, the annual payout is in the lower hundreds of pounds and will not increase from extension … £250 a year is not a pension.”

The same Guardian article features an artist (Nic Jones) who had a hit album in 1980 but received no royalties as he doesn’t own the recordings. It would appear to be that it is the rights and the contractual relationships between the artist and the others in the music industry that needs renegotiating for a fairer deal for the artists who are not in the well-known Beatles league.

Copyright is necessary and may fuel creativity in the short term by providing an income to artists but hinders creativity in the longer term by creating monopolies and preventing creative reuses. It is worth reminding ourselves that copyright term was originally 14 years . Most (two-thirds) of the revenue from a recoding is said to be generated in the first six years. So the arguments in favour of the extension to 70 years would appear to be unconvincing. Unfortunately UK and European legislators do not agree.

Mimi & Eunice sums it all up much better than I can ever hope to.


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