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

Andy Carter Excerpts

Friday 3rd December 2021 Commons Chamber

[Dean Russell]

My hon. Friend makes an incredibly important point. As a fan of Peter Kay, I know he does an incredibly good sketch—I recommend it to anyone who can find it, but especially on his own DVDs—in which he explains quite a good story about getting wrong the lyrics of famous songs. I strongly recommend that my hon. Friend continues to do that, even though what she did back in those days may have been on the border of what we were allowed to do.

I say this because there is an important point here about discovery, such as the discovery of new artists and the discovery of new musicians. One of the challenges I find with the Bill—as I say, I am very supportive of its principles—is that streaming platforms do provide a great opportunity to find new artists. Not all of them do it to make money just off that platform, but also refer people to TikTok or other platforms to explore their other artwork, forms of art or music, as well as to help tell different types of stories.

[Andy Carter]

One of the great pleasures of coming into this House was meeting the hon. Member for Perth and North Perthshire (Pete Wishart). I remember, having worked in radio, hearing his songs on the radio, including “Loch Lomond” from his days in Runrig. I was able to go away and listen to his songs, and in fact I have some of them on my phone now, so having listened to him speak, I can listen to him sing as well.

[Graham Stuart (Beverley and Holderness) (Con)]

I know which is preferable!

[Andy Carter]

Absolutely. One of the great advantages of the internet is that it has opened up to us so many artists, some of whom were, I have to say, before my day. The internet allows such discovery to continue in a way that perhaps would not have been possible without it.

[Dean Russell]

My hon. Friend makes an incredibly powerful point, which highlights the immediacy for us now of music and of art in general, which I see with film and in many other areas. Recently, as a member of the Joint Committee on the Draft Online Safety Bill, I was praising the Common Sense website, which states what age a child should be to watch a film. That has solved many arguments in families, who are able to find quickly not just the age rating for a film or television show but the recommended age at which a child could perhaps start watching things. With the conversations we can have, and the immediacy with which we can find information as well as music and movie soundtracks, the interconnectivity that we have through culture is incredible.

--- Later in debate ---

[Julie Elliott]

I thank the right hon. Gentleman for that comment. Our Select Committee has looked in great detail at this issue in recent months. I do not come from a musical background—you really would not want to hear me sing—but I have always been a huge music fan. I was always told off for spending all my pocket money on music—on Smash Hits, as it was in those days, to see the lyrics, and on vinyl. One thing came out when we were looking at the impact of the pandemic on the music industry. As people could not perform live, that source of funding completely stopped for musicians and artists, and we then went on to look at streaming. Until that point, I had not given a huge amount of thought to where musicians’ and artists’ money came from—it had not really crossed my radar to such a degree. As we went through this streaming inquiry, what became apparent was the absolute unfairness of the system on the people who produce the music we love. It is not the people at the top of the music industry that this Bill would affect to any huge degree, but the people coming through—not just those starting out, but those at a middling level, who are winning awards; we have probably heard of them but they are not quite at the top of their career. They are literally struggling to pay their bills and that is not right. If this is not put right, people will not enter the music industry because they simply will not be able to afford to do so. That is of no benefit to anybody and that is the issue that needs sorting out.

It was interesting listening to just how opaque some of the dealings are between the record companies, publishers and everybody else. I innocently said it sounded a bit like a cartel—I am not saying it is a cartel, but it just sounded like one. Trying to follow where money was coming from, where it was changing hands and where it was going to was almost impossible. This idea of equitable remuneration struck me as a sensible way forward. I am not saying it is a perfect solution, as there probably is not one, but it is a sensible way forward to at least begin to put right the issue that clearly exists. As we all know in this place, the way the digital world has transformed our lives over the past 20 years, in music or in anything else, means that it is very difficult for legislation to keep pace with the changing digital world. Digital skills need updating every five months, but legislation in this area certainly has not changed every five months. I am pleased that the Government have referred some of this area to the Competition and Markets Authority, because there are definitely things that need looking at there.

I turn now to contract adjustment and the fourth part of this Bill, which deals with the 20 years to give notice on a contract. I have been a little surprised at some of the things I have heard about that in the House today. When we start any job, we get a contract of employment. In this day and age, very few people will still be party to that contract of employment after 20 years. People enter into a legal contract when they get married, but there is nothing to say that after any point, if that does not work, they cannot give notice and go through a legal process to get divorced. Why should artists tied to record labels, often at a very early stage of their career when they often do not have sufficient advice and support, be tied to a contract for more than 20 years if they do not choose to be? Just as record companies can renege on the contract after however many records have been produced, it is right that after 20 years any artist should be able to do so.

[Andy Carter]

Could the hon. Lady explain to me a practical point on this? If one particular artist were to give notice, that would then mean that the piece of music could not be broadcast or used in streaming. What would that mean for all the other artists performing on that track?

[Julie Elliott]

I do not think the basis for the hon. Gentleman’s question is quite accurate—I do not think it has that impact. I do not think a period of 20 years is an unreasonable length of time after which to be able to give notice on a contract if somebody chooses to do so.

In conclusion, there seems to be broad agreement among most hon. Members in the House today that the impact of the streaming of music and of people’s work is not fair, that remuneration as it stands is not fair, and that it would be welcome if we could take this Bill to the next stage to look at it in more detail. If that ends up not happening today, I urge the Government to look carefully at this area of legislation. Something must be done to ensure fair and equitable remuneration for people starting out and moving through the music industry so that, as an old trade unionist like me would say, they get a fair day’s pay for a fair day’s work.

--- Later in debate ---

[Andy Carter (Warrington South) (Con)]

It is a pleasure to follow the hon. Member for Feltham and Heston (Seema Malhotra). I wish to start by congratulating the hon. Member for Cardiff West (Kevin Brennan), because in bringing this Bill to the House and having it delivering this level of attention, he has highlighted what an important sector UK music is. I cannot claim to be an ace musician—my piano lessons in secondary school led only to headaches for my parents—but I have spent some 20 years working in music broadcasting. During that time, I was part of the industry working group that negotiated with music rights holders, including PPL, the Performing Right Society and the Mechanical Copyright Protection Society, to secure permission to use recorded music on commercial radio. So I am aware of the relationship of businesses that build success on the back of playing recorded music, and I see the need for rights holders to be paid a fair settlement for their work.

I wish to step back a little and pay a brief tribute to the UK music sector. Everyone in this House should be incredibly proud of British music and the contribution it makes to not only our wellbeing, but our economy. For us in this country, British music is the soundtrack to our lives, but that is true around the world, too. UK recording artists feature on radio stations and streaming platforms around the globe every second of every day, and that has not come about because we have legislated to promote our great music. It is worth noting that some countries, such as France, do legislate to ensure that their broadcasters play French music, because they want to give it an unfair advantage. We, though, maintain an interest in supporting brilliant talent. UK music’s success has come about because we allow creativity to flourish, we invest, we nurture talent and we have the advantage of the English language. Above all, we have incredible songwriters, great musicians and brilliant performers who deliver what an engaged audience wants to listen to.

Let me just set out one or two figures that demonstrate that. The UK music industry contributed £5.8 billion to the UK economy in 2019, which was an 11% increase on the prior year. Employment in the industry hit an all-time high in 2019, at 197,000 people, which was an increase of 3% on the prior year. That is not just people playing instruments and singing songs; we are talking about songwriters, producers, artists’ managers, publishers, the people in recording studios, musicians, promoters, crew, and those in record labels and collective management organisations. They are all part of an industry that supports almost 200,000 jobs, which are critical to UK plc. The total export revenue of the music industry was £2.9 billion in 2019, which was an increase of about 9% on the prior year. This is such an important sector, and it is so crucial that we treat it with care when we consider legislation.

[Gareth Davies]

My hon. Friend is making an extremely powerful speech outlining the importance of the music industry to our economy. Will he acknowledge that it is also a vital part of our tourism attraction, bringing in about £4.7 billion in tourism revenue for this country every year?

[Andy Carter]

I thank my hon. Friend for that, as he pre-empted exactly what I was going to say next. We are talking about £4.7 billion of spending in the UK economy, which was an increase of 6% of the prior year. UK music tourism is crucial, and it is so important that we have live performances back in concert venues, pubs and locations across the UK. Our music industry is a critical national asset. It makes us feel good. It enriches our lives with tunes that get into our head and make us tap our feet, and it really does set the mood for the nation. What we do in legislation in this space could have profound implications.

[Dean Russell]

What my hon. Friend has just said is so important. The music industry contributes to not only tourism and the economy, but the culture of this country. So if we rush into legislation without making sure we have engaged with every possible partner and every possible organisation, we could get it wrong and therefore have dramatically bad effects for everyone. We need to support our artists—I am very supportive of the principles of the Bill—but we have got to get it right.

[Andy Carter]

I thank my hon. Friend for his intervention. We have to accept that we are talking about a global industry, and it is possible today to pick up a business and locate it anywhere in the world. If we make legislation in this country that makes it difficult to do business, we will see global businesses deciding to go and locate in other countries. My right hon. Friend the Member for Maldon (Mr Whittingdale) mentioned K-pop, and we should be very aware of what is going on in Asia. It is easy for international businesses to identify different markets, build on those phenomena and generate significant revenues from elsewhere in the world.

The developments we have seen over the last 20 years, from music lovers being able to walk into Our Price or HMV and buy a CD to a model where they can have any sort of music instantly available on their phone simply by saying the name into a smart speaker, have changed the game completely and in a way that most of us could not have imagined 20 years ago.

This private Member’s Bill follows on from Parliament’s inquiry into the economics of streaming. At a base level, it seeks to alter the artist-label relationship through copyright law reforms to rights ownership and how revenue stemming from an artist’s recording is shared out. Actually, the way in which streaming moneys are split between an artist and the label or distributor they work with on their recordings is entirely dependent on how each individual record and distribution deal is reached. The artist could receive anything from a few per cent. to 100% of the money they generate. That is based on the contract they sign when they enter into business.

Although the Bill raises some critical issues—I support action on many of the themes that have arisen in today’s era of streaming—some unintended consequences may arise from it. Those need to be discussed because, although I want to see change, I also want to ensure that future generations of British artists receive the investment that they deserve. On the back of the Select Committee inquiry, the Government are already working with the sector to assess the market for all stakeholders through the Competition and Markets Authority, the IPO and DCMS, and I look forward to hearing what the Minister has to say shortly.

We need to have a data-driven and evidence-based approach to such a complex and important issue. The arguments that underpin the Bill are emotionally compelling, but I am afraid that they incorrectly play on the David versus Goliath narrative. I have seen headlines saying that artists are not earning from streaming, but streaming has actually provided artists with greater success than the CD era. The shares of label revenue that artists receive are higher than they were in the past. Artist remuneration has risen to 46% of overall revenue, compared with an increase in label revenues of 31%, meaning that artists are claiming a larger share of streaming revenue than they have done traditionally.

Other terms have also improved in the artist’s favour, including sharing equity in streaming services, digital breakage and writing off unrecouped balances, as well as royalty rates increasing. The hon. Member for Perth and North Perthshire (Pete Wishart)—I want to refer to him as the hon. Member for Runrig—said that one of the challenges he faced was that his unrecouped revenues were never reached, so he never earned any money. Artists are talking action on that, and I am pleased that they are being listened to.

A study of musicians’ pay by the IPO showed that between 2008 and 2019 artists and composers have seen their earnings rise faster than those of record labels. The intentions behind the Bill do not reflect those advances, and are not supported by the robust data and evidence delivered by independent academics in the IPO’s recent report.

The set of legislative proposals included in the Bill, although well intentioned, could actually harm the very model that has underpinned the industry’s renaissance. The focus needs to be on securing better deals with streaming companies. I was really struck by the comments of the former CEO of EMI Records, Tony Wadsworth, who suggested that if Bill were passed today,

“these proposals would create huge uncertainty, a mountain of red tape and make the U.K. a terrible place for investment in music.”

We do need to do something, but that something needs support from across the sector. I would argue that we need to see the outcome of the investigations by the CMA before any changes in the Bill are actually brought into force.

In business, and particularly in the music business, I am afraid that we see a need for instant gratification and success, and music labels are the only players that can tackle that. Their long game is what is really critical. We need to take their views seriously and recognise their concerns about this Bill. Successful artists from the 1980s funded investment into new artists in the 1990s, which in turn funded investment into the young artists of the 2000s. Artists such as the Pet Shop Boys, Radiohead, Robbie Williams, Coldplay and many others were supported by that investment in their early years, and that music ecosystem will continue to support music artists in the future.

Labels will continue to invest huge amounts each year in emerging talent through artists and repertoire, the music industry’s equivalent of research and development. My right hon. Friend the Member for Tatton (Esther McVey) indicated earlier that the amount of money being spent could be cut. I suggest to her that if we look at the music business around the world, 30% R&D is what is happening in all markets. I am afraid I do not see that changing any time soon, because if businesses could find a way to reduce that, I think they would; it would be an incentive to businesses to be able to reduce it at an early stage.

However, there is no denying that the new cast of characters in the market, such as Spotify, Apple Music and content platforms such as YouTube, have changed the game. When physical sales were king, the top 10 artists were twice as dominant in earnings terms as they are now. With streaming, considerably more new talent can build up a real fan base, while popular established acts are able to find new audiences and become timeless.

I am not suggesting there is nothing to fix. Music is being devalued and musicians’ earnings are being impacted. Ad-funded streaming services are not paying fairly for the music that drives their business, and that is an issue we should absolutely tackle. YouTube accounted for more than 20% of streaming consumption in the UK last year, but generated only £35 million in royalties, £20 million less than artists and labels earned from good old-fashioned vinyl records. The question we should really ask is how such services can get away with paying so little.

The market is by no means perfect but, unlike the giants of free content, subscription-based streaming services enable more artists to share in the money they make from music. In my view, the contemporary music landscape is much wider, and I fear the Bill will harm chances for newer and more diverse artists and businesses that have either escaped the old-world paradigm, or grown up in the newer, more open ecosystem in which many businesses flourish today.

I turn briefly to the term “equitable remuneration”, which is often used. I make no bones about this: I am afraid equitable remuneration will not mean fair payment in the sense that it is commonly understood. I have heard a number of hon. Members on the Opposition Benches talking about fair pay for a fair day’s work. I am afraid equitable remuneration will not deliver that in the sense that they perhaps believe it will.

Analysis by the Association of Independent Music suggests that applying ER to streaming will not address income inequality in music. In fact, the top 1% will get richer at everybody else’s expense. There is an argument that ER favours the old world over the new, or artists who have had success in the CD era and before over the new generations of diverse creators and entrepreneurs who are succeeding in the digital age. I want to see all artists rewarded fairly, but we need to create that environment when we have all the information to do so.

The industry would not know whether it would have 70 years or 20 years in which to recoup its investments if the Bill moved forward, because of the flexibility it would allow for contracts to be terminated. That would have a major influence on how much labels would be able to invest in new signings, new recordings and marketing, and on the terms they would offer in new deals.

As the hon. Member for Sunderland Central (Julie Elliott) said earlier, there are some practical problems for multiple performers, where revocation by a single performer would prevent continued commercialisation of a record. I recognise that when she responded to my question, she said there was much more to look into in that particular area, and I suggest that that is a real-world problem that the Bill does not necessarily address.

As I said earlier, I believe we need to see changes to fairly reward artists and grow the music sector in the most effective way to benefit artists. The UK is the second biggest exporter of recorded music in the world—one in 10 songs streamed globally is by a British artist—but I am afraid that the Bill would put that model at risk. The legislation would seek to only hasten the decline if large labels decided to invest more in overseas territories than in the UK. On that basis, I urge the Minister and DCMS to do more work before we take the Bill forward.