Artistic Remuneration for Online Content

Debate between Lord Vaizey of Didcot and Nigel Adams

Wednesday 6th July 2016 Westminster Hall

[Nigel Adams (Selby and Ainsty) (Con)]

I beg to move,

That this House has considered artistic remuneration for online content.

It is a pleasure to serve under your chairmanship this morning, Mr Gray. I thank my hon. Friends the Members for Somerton and Frome (David Warburton) and for Folkestone and Hythe (Damian Collins) for helping me to secure this important debate.

Everyone is aware that the creative industries are one of this country’s greatest assets. The Government’s own analysis shows that the gross value added of the creative industries in 2014 was in excess of £84 billion, which accounts for around 5.2% of the UK economy. Essentially, they have been a source of growth in recent years, increasing by 6% since 1997, compared with 4.6% for the UK economy as a whole. However, we would be doing the industry a disservice to consider its value in purely economic terms, because its impact is far wider.

Our creative industries are our voice to the world. Very little, if anything, contributes more to the UK brand around the world than our artists, writers and directors.

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

Hear, hear.

[Nigel Adams]

Quite right.

Just a few weeks ago, the trade body, UK Music, published a report on the value of music tourism to the UK, which showed that direct and indirect spending in 2014 from music tourism was £3.7 billion. Some 38% of live music audiences are music tourists: music lovers from outside the UK. They come because they love our world-class artists and our fantastic venues and festivals. It might be easy to take our creative industries for granted and to assume that the country that gave the world Shakespeare, the Beatles, Harry Potter and Banksy will also be at the forefront of the global culture landscape, but that would be a massive mistake. Indeed, we in this House have a duty to ensure that our cultural sector has the tools to grow, including a copyright regime that is fit for purpose in a digital online market.

Members may have read about the recent public disagreement between songwriters and artists and YouTube over royalties paid by the service. In the last few weeks, 186 major artists in the US and over 1,000 in the UK and Europe have signed public statements of dissatisfaction addressed to the US Congress and to Jean-Claude Juncker. Signatories range from Sir Paul McCartney and ABBA to Ne-Yo, Idina Menzel and deadmau5, and even includes the former French first lady, Carla Bruni, who is also a recording artist—although I do not have too many of her tracks on my iPhone.

Last month, I met members of PRS for Music and songwriters and composers whose music and songs are enjoyed around the world. I heard from them the dissatisfaction that millions of streams can result in just a few hundred pounds in royalties or, in some cases, no royalties at all. Most dramatically, I spoke to one songwriter who was entitled to 25% of the revenue from a song he wrote, but who had seen a mere £5.39 from almost 3.2 million plays of that song on YouTube by listeners who actively sought out that track. Meanwhile, the same songwriter saw several times that amount—a princely £87.79—from the 180 occasions on which the song was played in stadiums in the UK, despite those listeners being passive and hearing what others chose to play for them. That seems to be a pretty upside-down arrangement.

To show how far behind the law the balance is, Geoff Taylor of the British Phonographic Industry recently said that British artists saw more revenue in 2015 from the 2.1 million vinyl LP sales than from the 27 billion music video streams on YouTube and similar platforms. It is not difficult to understand the despair of a writer or artist who sees their life’s work online with little hope of any financial reward now or in the future. This is particularly a problem for less high-profile producers, writers and creative people, who are less likely to have additional income streams from endorsements or touring.

High-profile artists are often very concerned about this problem and its impact on other members of the creative community and their teams. A big artist will often get little sympathy and, as we have seen recently, there may even be a backlash from the media and consumers for speaking out about the problem if they are perceived to be well off. Fair or unfair, this reaction just makes it harder to expose the problem and to support fair remuneration for those in the industry who are less famous.

The basis of the music industry’s concerns is the so called “safe harbour” laws, which in the US, EU and UK give user upload streaming services the same protection from copyright as host providers, such as personal cloud locker services. This is despite the fact that they operate entirely differently and, more importantly, impact the market in different ways. Take, for example, a comparison between Spotify and the user upload site Dailymotion. Both sites allow users to search for and listen to Adele’s track “Hello”, one of the fastest-selling tracks of all time. Spotify is licensed to stream that track and thus pays the artist, songwriter, producers, musicians, publishers and labels that are so crucial to creation of the content, but Dailymotion does not. Due to ambiguity in the safe harbour framework, user upload services can claim to be mere hosts of their user’s content and, as such, are not required to share with the creators the wealth they generate for themselves. That does not seem fair.

When a business model is based on making available to consumers creative content created by others, surely we as lawmakers must ask whether this is right. In fact, the very premise of copyright is to ensure that creators are paid when their work is exploited by others.

It may be easy to argue that the current framework is good for consumers. How can it not be, when music can be enjoyed more easily than ever before? However, I would add a note of caution to such assumptions and suggest that the user experience may not be as positive as it might first seem. When faced with piracy, it was universally agreed that creative content has an intrinsic value that must be protected if the future generation of creators are to be nourished for society’s economic and cultural benefit. These principles remain true today and we must not replace one market failure with another.

Equally, there are impacts on the licensed streaming services to which many users pay a monthly subscription. These services are forced to compete on an unequal playing field with user-upload services that pay little or nothing to creators. They are forced to offer their own ad-funded services, which are often run at a loss or subsidised by income from the subscription service. The net result is less competition in the market for subscription pricing and ultimately consumers could lose out.

In March, the all-party parliamentary group on music, which I chair, hosted a dinner to discuss the growing music streaming market. The dinner was well attended by services such as Apple Music and Spotify, as well as representatives of the music industry. It was clear from the dinner that streaming presents many opportunities for the industry and that it is embracing them. However, there are challenges in ensuring the music industry captures this value, such as whether advertising revenue and ad-funded models are sustainable and the growth of ad-blocking and stream-ripping technologies that can have an impact on the amount of remuneration the industry receives in return. The legal position of safe harbours and how they interact with the market perhaps presents an even more fundamental problem, and this will continue unless action is taken.

The Creative Industries Council launched its strategy this week, with many recommendations to the Government and industry alike. The council is seeking legal clarity concerning the liability of platforms that actively host and market content. Specifically, it argues that to maintain an intellectual property framework fit for the digital age, such platforms should not benefit from safe harbours. The Government have indicated that they would support a clarification too. I would be grateful if my hon. Friend the Minister said what plans the Government have to respond formally to that recommendation and what further steps they are taking to achieve that.

[Nigel Adams]

It is absolutely an issue that needs to be addressed. I have myself searched online and found that the results I get are from piracy sites. Something has to be done. There is a responsibility in this respect not just for Government, but for the search engines themselves. Perhaps afterwards I can help the hon. Gentleman spend his £5.60 as we discuss what should come out of this debate.

We are in a unique place to address these issues and ensure that we are world leaders in striking the right balance between the promotion of technology and creative innovation. With the recent vote to leave the EU, the UK Government will have full control over policies related to digital streaming and artist remuneration. Will the Minister undertake to investigate whether provisions can be put in place so that once we eventually leave the EU, our UK industries can fully achieve the value in their rights?

[Mr Vaizey]

Hear, hear.

[Nigel Adams]

That is encouraging. Will the Minister investigate, for example, the possibility of introducing a sunrise clause into the Digital Economy Bill? That could ensure that active hosts of content do not benefit from safe harbour when legal systems have been transferred and the European Communities Act 1972 is repealed.

It will not surprise hon. Members to hear me say that the music industry has undergone tremendous change and readjustment in its business models over the past couple of decades. The latest Intellectual Property Office and Kantar Media online copyright infringement tracker, published yesterday, concludes that the top three sources of music are YouTube, with 52%, Spotify, with 30%, and the iTunes App Store, with 20%. Use of Spotify has increased by 5% since last year’s tracker, while iTunes has fallen by 6%. The consumer trend is clearly moving away from music ownership. Copyright still reflects ownership for the creators of content and the infrastructure that supports it. We must ensure that those ownership rights are respected.

UK Musicians Performing Overseas

Debate between Lord Vaizey of Didcot and Nigel Adams

Wednesday 25th November 2015 Westminster Hall

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

I am grateful for the chance to reply to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) and to take account of the contributions made by many other hon. Members. May I begin by saying what a pleasure it is to serve under your chairmanship, Mr Howarth? It is an impactful point that in 1968 as I was being born, you were thrashing out tunes in a club. I think that that links us in some strange way.

I thank my hon. Friend for proposing this important debate. He is extremely knowledgeable about the music industry, and he is a vigorous supporter of that industry in the House. I echo his and many other hon. Friends’ comments about the horrific attacks we saw in Paris a week ago on Friday, particularly the attack on the Bataclan. Everyone has acknowledged and understood that that summed up why the events of that day were an attack on our way of life, because the opportunity to gather and listen to music is one of the manifestations of a free society. That is yet another reason why that day filled us with such horror.

I was lucky enough to meet the French digital Minister the day before the attacks, and the meeting reminded me of the strong links that exist between the UK and France across all our creative industries: not only music but film, video games and many others. I want to forge and strengthen such links, and even more so in the light of what happened on that horrific Friday, which will live in our minds forever.

My hon. Friend made a number of important recommendations, and I will pick those up as soon as possible. As this is the day of the spending review, I want to acknowledge the very good settlement that the Chancellor has given to the arts, because that supports investment in music. In the lonely hour I spent before the Chancellor got to his feet, I did not anticipate how good the settlement would be. As I make my remarks, I will make clear some of the support that the Government are giving to the music industry in general.

My hon. Friend made specific points about engagement with the US embassy, the ability to add tour dates should there be any delay, the possibility for the US authorities to use public buildings in the UK to make access to visa services easier for musicians, and the role of the Creative Industries Council. We also had important contributions from other hon. Members, including the hon. Member for Ealing Central and Acton (Dr Huq), who talked about her experiences in China. Her experiences in a left-wing environment reminded me of my early engagement with music, because I was a west Londoner too, and I well remember going to see the Redskins perform at the Hammersmith Odeon. The message,

“Neither Washington Nor Moscow”—

the title of their best-selling album—

“but international socialism”

never quite got through, but I was pleased to see that the shadow Chancellor, who brandished Mao’s “Little Red Book” when he responded to the spending review today, has clearly taken that message on board.

I want to pick up on a point in the speech of the hon. Member for Ealing Central and Acton about how airlines treat musicians. I hope that the message goes out from this debate at least to our own domestic airlines about some of the representations I have received from musicians. I hope they will treat musicians fairly when they travel abroad and that, for example, musicians who want to carry their violin or trumpet case on board will be allowed to take those instruments on board as carry-on baggage. I will obviously not suggest that for a double bass or a set of drums, but I hope some common sense can be used.

The hon. Member for East Kilbride, Strathaven and Lesmahagow (Dr Cameron) mentioned the upfront and hidden costs that can have an impact on musicians, such as visa delays, which not only cause frustration, but can increase the cost of a tour. The hon. Member for Cardiff West (Kevin Brennan) is a well-known supporter of the music industry, and also plays in the legendary band, MP4. He talked about the US-UK relationship and rightly praised the work of Jo Dipple and UK Music, which is fantastic across the piece on music policy, as well as the Musicians Union.

I was humbled by the speech of the hon. Member for Edinburgh West (Michelle Thomson) considering she is a highly qualified musician. I was interested to hear about her experiences, and I think that she will speak with some authority on music issues in the House. I congratulate the hon. Member for Glasgow North (Patrick Grady) on tabling the early-day motion calling attention to the issue that has now been highlighted by my hon. Friend the Member for Selby and Ainsty.

Many hon. Members have talked in great detail about the strong link between America and the UK. That relationship is unequivocally a good thing. From Acker Bilk to Adele is not a great leap alphabetically but, from 1962 to November 2015, they bookend almost 100 British singers and groups who have reached No.1 in the Billboard charts, including the Beatles, the Rolling Stones, Rod Stewart, Elton John, Queen, David Bowie, Bananarama, Kim Wilde, Def Leppard, Leona Lewis, Coldplay, Taio Cruz and a host of others. I could take the rest of my time just listing British musicians who have had an impact on the American charts.

Rightly, many hon. Members wanted to use this opportunity to praise the whole UK music industry. It is a salient and telling fact that five of the top 10 global recording artists last year were British, and one in seven albums sold worldwide was by a British artist. In fact, a British artist, Mary-Jess Leaverland, won the Chinese equivalent of “The X Factor” last year. Sam Smith has had No.1s from Canada to New Zealand, as has Ed Sheeran. Music is one of the things that makes our country great.

It is important to say—and hon. Members pointed this out—that we are talking not just about artists, but about sound engineers, producers, promoters, roadies and many others. Those speaking in the debate have been well informed by UK Music. Some people gloomily forecast that the writing is on the wall for live music and the music industry, but I disagree. I see the vital contribution of the live music scene not only to the worldwide scene, but to the UK’s economy. All around the world, people of all ages arrange their diaries around music festivals, which in many cases provide life support to their local communities. We will continue to support and promote the environment for UK music.

As I have money on my mind, I want to note that between 2012 and 2016, the Government have invested £460 million in a range of music and cultural education programmes. We are introducing tax relief for orchestras, which comes in next April. We recognise that music tourism generated more than £3 billion of spending, and 500,000 people came here just because of our music. I also mention, as it is very relevant to the debate, the music export scheme that we started a couple of years ago, which has helped so many musicians to go abroad. We do not just export our music; we welcome music from around the world. My hon. Friend the Member for Selby and Ainsty will know that the Taiwanese king of pop, Jay Chou, was so taken with the UK that he got married in Selby Abbey earlier this year, promoting a rush of Taiwanese tourists.

The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) asked what the Government are doing about the issue. I will need to check the records but I am certain that when the hon. Member for Bristol East (Kerry McCarthy) raised this issue in the House, I wrote to the American ambassador. She is quite right. We have to be careful as this is a visa system operated by another sovereign country but it is right for Ministers and, indeed, other Members of this House, to raise representations and make suggestions. I am not the only one who can do this: other Members can as well. Everyone who has come across the new US ambassador—I do not know whether we can call him new now—will know that he is a passionate supporter of the music industry, and I am sure that he would hear and take on board hon. Members’ concerns.

[Nigel Adams]

Does the Minister agree that the restoration of a dedicated person within the embassy would make a big difference? I have been involved with making phone calls to people I know who work at the embassy over the weekend—these problems often happen then. It would be such a big help if there was a dedicated line for people to call—

[Mr Vaizey]

I will stop my hon. Friend there because he will get a chance to respond in a couple of minutes. On that point, I will make that representation to the ambassador. It is an interesting point that the Arts Council has a dedicated official who helps artists coming into this country and works closely with the Home Office. I want to ask him about the point about adding tour dates and, potentially, to make the offer of public buildings. I certainly think that we could make representations about an office in Edinburgh. It is not my job, by any stretch of the imagination, to tell the US embassy or Government how to run their affairs, but I could make that suggestion.

Finally, on the Creative Industries Council, we have a sector advisory group for the creative industries, which brings together UK Trade & Investment, the British Council and others. I will ensure that that is on the agenda of the sector advisory group at its next meeting, which is co-chaired by me and the head of BBC Worldwide, Tim Davie. Now it is time for me to “lay me down” my notes, and I will sit down and allow my hon. Friend to respond.

[Nigel Adams]

I will be very brief. I am actually quite heartened by what I have heard this afternoon. I am particularly encouraged by the words of colleagues from both sides of the House. This is clearly a huge issue that is stifling creative talents from the UK and affecting their ability to expand their careers abroad. I do not think we have heard any dissenting voices this afternoon, and I am particularly encouraged that the Labour party seems to be on board. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) had three very good stabs at my constituency name but, if she does not mind me saying, it is Selby and Ainsty, and I think the ambassador is Ambassador Barzun.

[Mr Vaizey]

I just want to correct something on the record. I do not think that I wrote to the American ambassador, and I do not want to mislead the House. I think we took it up with officials. This issue came across my desk about three years ago. I just wanted to make that clear so that Hansard do not report me misleading hon. Members—[Interruption.]

[Nigel Adams]

Absolutely. It would be very encouraging if the Minister was able to write to the ambassador now. It is good news that the Minister and the Government take this issue seriously. These people’s careers have a lot to offer our country. We must remember that many musicians are on relatively low wages of £20,000 or less, and the cost is simply prohibitive for them to be able to get to the United States to perform their work. I am encouraged by what the Minister said regarding the possibility of liaising with the embassy regarding public buildings so that people do not have to travel to Belfast and London. I conclude my remarks by thanking everyone else for contributing. Hopefully, in the next few months, we will have an update to report.

Question put and agreed to.

Resolved,

That this House has considered UK musicians performing overseas.