Copyright (Rights and Remuneration of Musicians, Etc.) Bill

Debate between John Whittingdale and Kevin Brennan

2nd reading
Friday 3rd December 2021 Commons Chamber

[Mr John Whittingdale (Maldon) (Con)]

Let me start by congratulating the hon. Member for Cardiff West (Kevin Brennan) on introducing the Bill, which raises serious issues. Every time we speak in the Chamber, he points out that we do not just share a birthday but we were actually born on the same day.

[Kevin Brennan]

Make up your own minds. [Laughter.]

[Mr Whittingdale]

It is a challenge I happily accept. As a result, we probably have similar tastes in music, although not identical. We grew up during the same era. Where we do agree is that we both share a love of music —it is tremendously important to me. It is also tremendously important to this country; we are exceptionally good at it and have been for many years. The music industry’s importance to the UK economy is frequently cited—as the Select Committee points out, it contributes more than £5 billion in gross value added—and we are the second biggest exporter of music in the world, which does an enormous amount in terms of global Britain and the projection of our soft power. The music industry is a huge success story.

The UK’s exports have great potential, but it is worth my flagging the fact that the UK’s music share is beginning to decline: in 2015, we took 17%, but that has now fallen to 10%. That is because of the growth of new markets—in particular, Latin America and the developing economies—and the advent of things such as K-pop. I do not know whether the hon. Gentleman is a fan of K-pop; I have to say that it slightly passes me by, but I recognise that it is extremely popular.

The hon. Gentleman and I have followed the music industry for many years. He declared his interest as a performer and songwriter—indeed, I have heard him play many times—and I should declare that my son works in the music industry for Columbia Records, which is part of Sony Music. I have learned a great deal about the economics of the music industry from him, but my love of music and involvement in the industry pre-date his birth by quite a number of years.

The hon. Gentleman talked about when he first got involved in music industry issues; I go back rather further: my first involvement was 35 years ago when I supported the music industry campaign for the introduction of a blank-tape levy. I fear that some in the Chamber may not even know what a blank tape is, let alone a levy on one. It dated back to the years when—this is guilty admission time—one could sit with a cassette tape recorder waiting for a song to come up on the top 20 and then record it. That was piracy and a breach of copyright and was to be condemned. When I learned more, I recognised that it was not to be encouraged and that there should be a levy. Some in the industry still advocate a levy, albeit not on blank tapes but on devices such as iPods or smartphones.

Blank tapes were an early example of the threat to the music industry from piracy, which of course increased dramatically with the advent of the internet. The hon. Gentleman talked a little about the threat that emerged from illegal downloading and, in particular, peer-to-peer file sharing and the growth of companies such as Pirate Bay and technology such as LimeWire.

I recall, when I was its Chair—a little while ago now—taking the Select Committee to see Lucian Grainge, about whom I want to say a word because, although the hon. Gentleman did not name him, he referred to him. Lucian Grainge is the chief executive of Universal Music and is going to bank a huge amount of money this year because Universal Music has just conducted a very successful initial public offering and sold a 10% share. As chief executive, he is going to profit from that and we should celebrate that: Lucian Grainge is a British music industry executive who has built Universal Music into the most successful company in the world. As a Conservative—somebody who can celebrate that success—and a British citizen, I am delighted that he is going to do so well, but the whole company will do well, too. It is a remarkable success story, because when we went to see him back in 2008-09, he told us that he was seriously concerned that the industry itself was going to die, such was the extent of the threat to the industry at that time as a result of piracy. Beginning in the early 2000s, there was a 15-year decline in music industry revenue that was directly attributable to piracy.

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[Mr Whittingdale]

I completely agree with my hon. Friend. Composers, some of whom may not have their works performed live, are the foundation stone of the industry. I had dinner about three weeks ago with somebody who has probably never been heard of in this Chamber, Terry Devine-King, who is a composer, but writes for television and film productions and advertisements. He receives a good income from doing so. I absolutely recognise the importance of composers.

[Kevin Brennan]

I take the right hon. Gentleman’s point about Take That. I do not seek to personalise these issues too strongly, but is he aware that Gary Barlow was one of the more than 200 artists who signed the letter presented to the Prime Minister in support of my proposals?

[Mr Whittingdale]

I suspect quite a lot of artists whom I enjoy and admire may have signed the letter to the Prime Minister, but that does not mean I necessarily think they are right. Some artists are extremely knowledgeable about the economics of the industry, but it is horribly complicated, as I think everybody who has looked at it or sought to participate in this debate will recognise.

Before I move on to the measures in the hon. Gentleman’s Bill, as a former Minister at the Department for Digital, Culture, Media and Sport, I must put on record that I am proud of the Government’s efforts to sustain the industry, particularly when live performance became completely impossible as a result of lockdown. The fact that the Government were able to find £2 billion for the cultural recovery fund and bring in schemes such as the live events reinsurance scheme has kept the industry going.

One thing we can celebrate is that live is now back, and for those of us who enjoy music it is now possible to go and listen again. Last Saturday I was at the Witham Public Hall listening to Bootleg Blondie, which I thoroughly recommend to anybody who is of my generation and remembers with great affection Debbie Harry—who is still performing today, I think, and is about to go on tour. I also went to the Chelmsford Hot Box, in the constituency of my hon. Friend the Member for Chelmsford (Vicky Ford), and listened to two live bands: one a Scottish rock band called Helicon, with a sitar player, and the second a Mexican rock band. The owners of that venue said to me that they could not possibly still be in operation had it not been for the cultural recovery fund, so I take this opportunity to point out that the Government did keep that industry going.

Of course, the thing that has been the saviour of the industry and has reversed Lucian Grainge’s dire prediction is streaming. Where I disagree with the hon. Member for Cardiff West is that he said streaming was taking over from radio. It is not; radio is doing pretty well at the moment and there is very little evidence that it is in decline. I have been talking to Global about that in the past 24 hours. Where streaming is taking over, it is taking over from physical product or downloading. The revenue from sales of CDs or downloading is in steady decline and people now rely more and more on streaming.

The hon. Gentleman also talked about the way in which radio distributes money to performers, artists and composers. That is done through PPL. It is worth noting that in America, artists who get played on the radio do not get any money at all, so there is a specific way that money is distributed as a result of radio plays in this country that is different from streaming, but if we look in some other countries there is no money at all.

As I said, the revenue to musicians comes from a large number of different sources, and streaming is only one. However, it is noteworthy that in the past few years, the share of money from streaming that goes to artists has gone up. Streaming has increased steadily, but between 2016 and 2019—figures that come from the International Property Office’s survey of creative industries’ earnings—artists’ remuneration has gone up by 46%, whereas revenue to the labels has only gone up by 31%. Artists are taking a bigger share of the revenue from streaming services than they were previously, and that is borne out by the IPO survey.

I question what the hon. Gentleman said about the failure of the industry to engage with the IPO; it is not the case. If he looks at the final report he will see that it recognises that, after an initial disagreement about the scope of the survey and one or two other points, the industry provided a lot of data. There is an improvement, but it could go further and I sympathise with one or two points that the hon. Member for Cardiff West made. However, it is not as if artists are suddenly being deprived of revenue as a result of the move to streaming. I shall comment specifically on some of the hon. Gentleman’s proposals and particularly on equitable remuneration.

Equitable remuneration is in the eye of the beholder. Who decides what is equitable remuneration? One answer proposed by the hon. Gentleman is the copyright tribunal. Spain has a system of equitable remuneration, which takes away money not from the rights holders but from the platforms, to give to the artists. There is an argument, which I shall come on to, that the platforms get and keep an unjustifiably high proportion of revenue. However, in the Spanish system, about 23% of the revenue goes on administrative costs.

The principal problem is the idea that labels make huge profits at the expense of artists. That ignores what labels do. I remember from the early days of the industry—before the time that the hon. Gentleman talked about—another campaign mounted by the Culture, Media and Sport Committee, whose then Chair, Gerald Kaufman, was the right hon. Member for Manchester, Gorton. The Committee pointed out that CDs cost tuppence-ha’penny to produce, and therefore it cost virtually nothing to make millions of them, and yet they were sold for a vast amount—£10 or more. What that ignored—and the same applies to streaming today—was the vast number of artists that labels supported on the basis that they could be tomorrow’s Ed Sheeran or Adele. In the vast majority of cases, sadly, they are not, but the only way we can find the stars of tomorrow is to invest in a huge number of artists, in the knowledge that we will find a jewel among them.

When labels invest in artists they expect to lose money in most cases. That is just the way in which the economics of the industry work. About 40% of that revenue goes into marketing and A&R, which identifies artists and finds them. On marketing, people say, “Who needs labels any more because you can put music up on Spotify or YouTube, and you can promote it yourself on social media?” I do not think you would find a single successful artist who would agree with that.

At the moment, there are 60 million tracks on Spotify, and 60,000 tracks are uploaded every day. Among those there may well be real talent and stars, but finding them in that noise is almost impossible. Where a label comes in is with its A&R people, who go out and listen to bands and performers, and find unrecognised talent, which they sign and put together with session musicians, orchestras and song writers, and then market it. That requires not just negotiation with radio stations but expertise in promoting records. One of the biggest places to promote music is TikTok, and a huge amount of effort goes into trying to elevate artists on social media. All of that is where the expertise of labels comes in. They have an important function.

During our debate, attention has been given to the three major global labels—Universal, Sony and Warner. However, 26% of the market for releases is now held by the small independent sector. I have to say to the hon. Member for Cardiff West that I have spoken to a number of independent labels and they are all really concerned about the provisions in his Bill. Just to give three examples from many, Dirty Harp, Good Soldier and Cherry Red have all come forward and said that it will prevent them from finding new British artists and investing in them.

The irony is that the way in which the music industry has developed recently means that some of the most popular artists who are now being found and signed and whose music is beginning to be promoted are the young grime artists from the council estates—from very disadvantaged backgrounds. My fear is that if we take the money away from the labels to give to established, successful artists, we are depriving the future stars of the investment on which they depend. That is one of the real concerns about the effect of what the hon. Gentleman proposes.

The next thing I want to look at is contract adjustment. Yes, sometimes contracts do need to be revisited, and that is something that labels do a great deal of the time. However, the interjection of the copyright tribunal will create huge uncertainty, which will be exacerbated by the proposal for contract revocation after 20 years. Twenty years may sound like a long time, but it is not very long. If a label that is signing an artist and making an initial investment of tens of millions of pounds has the knowledge that they and the artist have reached a contractual agreement that will extend and that will allow that money to be recouped over a lengthy period, that does give certainty. If, after 20 years, the artist can just say, “Well, actually, we’ve decided that we are doing really well, so we want to tear up our contract because we don’t think it’s fair any longer,” that introduces a degree of uncertainty.

I would also say to my hon. Friends that it is profoundly un-Conservative for the Government to step in and say of a contract reached between two willing parties, “Sorry, we are going to completely legally give you the right to tear it up, even though you have committed yourselves to it.”

BBC: Dyson Report

Debate between John Whittingdale and Kevin Brennan

Monday 24th May 2021 Commons Chamber

[Mr Whittingdale]

I do agree with my hon. Friend. She is absolutely right to say that it is those qualities of accuracy, impartiality and fairness that are admired around the world as being as being represented by the BBC. That is why the revelations in the Dyson report are so damaging, because they cast doubt on those things. I can assure her that not just the Government but, I believe, the BBC are absolutely conscious of that and determined to put it right.

[Kevin Brennan (Cardiff West) (Lab)]

I welcome, in general, the tone that the Minister has adopted today in response to this. He said in his statement that

“the need for public service broadcasting and trusted journalism has never been stronger.”

He is absolutely right about that. That was also the conclusion of our Select Committee, the Digital, Culture, Media and Sport Committee, when we recently reported on the future of public service broadcasting. This is an example of an era of journalism that was infected with a poisonous culture which unfortunately, in this case, spread to the BBC, which should have been displaying different kinds of values in its journalism. I just want to read a short quote from the National Union of Journalists parliamentary group, which said in its statement:

“It’s important for us also to reiterate that the BBC is not its management, past”—

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[Kevin Brennan]

With your indulgence, Madam Deputy Speaker, and I apologise.

“It’s important for us to also reiterate that the BBC is not its management, past or present. The BBC and the values and principles of public service broadcasting it personifies is in fact our members, and all its staff, who do the work that makes the corporation an entity that is valued at home and throughout the world.”

Does the Minister agree with that statement?

[Mr Whittingdale]

I do agree with that statement. There is no question but that the challenge posed by fake news and disinformation, which are circulating at a level we have never previously seen, makes it all the more important that there are trustworthy, reliable places where one can go without questioning the validity of what is being reported, and the BBC represents that above all else. I read with great interest the Select Committee report that the hon. Gentleman referred to, and in large part the Government completely agree with it, certainly, the importance of public service broadcasting —that has never been less, as was powerfully set out by His Royal Highness Prince William in his comments about this episode.