Copyright

Lord Berkeley of Knighton Excerpts

Thursday 5th December 2013 Grand Committee

[Lord Berkeley of Knighton (CB)]

My Lords, I am very grateful to the noble Baroness, Lady Buscombe, for initiating this important and timely debate. Personally, and speaking as a composer, I am always touched and flattered that people want to listen to my music and even to copy it. Sadly, though, I and my colleagues and the people who play, publish and record our music cannot live on flattery. If we were shopkeepers, it would be like allowing the public to come into our shop and help themselves to items without paying. Whenever we point this out, we are told that new methods will be adopted to recompense us. Historically, change has inevitably led to a cut in income. The creative industries are projected to be worth around £36 billion to the UK economy. They have withstood our recent economic problems and are well placed to contribute to UK growth. I regret that this contribution could be threatened by some of the less well thought out proposals to modernise copyright exceptions that we are considering today.

I would like to focus my remarks on two of the proposed exceptions and demonstrate how they could have a detrimental impact on our music industry. The UK music industry is one of only three net exporters of music content in the world. We are world leaders in the number of licensed digital services, providing fans and consumers with many ways to enjoy music. Intellectual property is the framework that underpins success for the music industry and copyright is the currency of that framework. Copyright provides businesses with an incentive to invest in music and allows musicians and composers to derive an income from their creativity.

However, it is a fact that some 78% of the sector earn less than £20,000 a year. It is very hard for young musicians and composers to get a foothold in the industry. Any loss of income from losing the right to be compensated for the copying of one’s work will be incrementally more damaging in today’s environment for musicians and composers and makes such careers less feasible. Research conducted by music industry body UK Music concluded that consumers ascribe between 32% and 53% of the value of an MP3 player to its ability to copy music. Yet music rights holders never see any of this value, as the exception and compensations are not in place here.

The Government justify their intention not to provide compensation under this exception on two grounds. First, they argue that rights holders are pricing in the ability to private copy at the point of sale. That argument is, however, undermined by the Intellectual Property Office’s own research produced to support that policy. In the case of music, the research said:

“We did not find any evidence in support of a widely-held view that stores are including in their price the permission to copy.”

Similarly, the Commons Culture, Media and Sport Committee recently concluded that it does not share the Government’s acceptance that a facility for private copying is factored into the purchase either of music or devices that store, play or copy it.

The second argument the Government put forward is that there will be no harm as the exception is narrow. Will the Government tell us just how narrow this exception is compared with other countries with an exception? Prompted by a question from Kerry McCarthy MP in the other place in October 2013, the Government provided evidence published in 2007 on different exceptions across the world. From this information it appears that only Poland and the Czech Republic have wider exceptions than the Government’s draft. Other countries have exceptions that are just as narrow as the one proposed in the UK, yet they are all accompanied by compensatory schemes. Do the Government have any up-to-date information that they can share with the Committee? How will we be compensated?

There does need to be a change in the law to reflect what consumers are doing with music that they have legitimately purchased for their own personal use. However, to progress with this policy, the Government have to take two steps. First, there needs to be a specific provision for a compensatory scheme. Secondly, the exception should be redrafted in such a way that it is narrower, applying only to the copying of a physical copy and not interfering with the licensing of the potentially valuable cloud services market. To proceed with the exception as currently understood would be a grave mistake. It would undermine the system across Europe and exclude us from being involved in the reform of the levy system there.

The second and final exception I want to discuss concerns the important subject of education. For publishers of sheet music, “fair dealing” is a vague term unlikely to be understood by consumers, the vast majority of whom are self-employed music teachers and students. This term will cause massive uncertainty. Music publishers have neither the financial resources nor the inclination to take individual music teachers or students to court to have this clarified. The Government should reconsider this exception in light of the detrimental impact it could have on this culturally significant business. What safeguards do the Government propose to put in place to protect providers of specialist material who are dependent on teachers purchasing it?

In conclusion, we have a music industry to be proud of. It generates significant revenues, provides jobs, invests in talent and exports globally. When industries are as successful as this one is, it is easy to take them for granted. However, I firmly believe that this industry deserves to be respected and congratulated, just like all the others that succeed. The negative impacts for the music industry that I have outlined need to be addressed before the exceptions are introduced into law.