Creative Industries
Debate between Caroline Dinenage and Nusrat Ghani(2 weeks, 6 days ago)
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Dame Caroline Dinenage
We may be here for a long time if the Minister answers every question that I am going to ask over the next few minutes, but let us have a go.
We in the Select Committee are very excited, because tomorrow the Minister will be appearing before us for the final episode of a very long-running inquiry into film and high-end television. I do not want to give away too much—no spoilers, Madam Deputy Speaker—but I would like to share with the House evidence that we received recently. Everyone will have had a different TV highlight over Christmas, but two massive hits were undoubtedly “The Mirror and the Light” on the BBC and “Black Doves” on Netflix. Peter Kosminsky, the director of “The Mirror and the Light”, told us that every streamer turned down the option to take up the show, despite the awards, the critical success and the acclaim for that first series of “Wolf Hall”. In fact, the only possible way to make it was for the producer, the writer, the director and the leading star to give up a significant proportion of their fees. It is unimaginable—is it not?—but it is not unique.
The Producers Alliance for Cinema and Television, charmingly known as PACT, has warned that 15 green-lit dramas are stuck unmade because the financial contribution that a public service broadcaster can offer, together with sales advance and UK tax breaks, simply is not enough to compete with the current inflated cost environment. Jane Featherstone, the producer of “Black Doves” and other massive hits such as “Broadchurch” and “Chernobyl”, told our Committee that the PSBs were being “priced out” of making high-end drama, which means that British stories for British audiences are at risk, as are the training grounds for the next generation of talent. We talk so much about the importance of creative education, but if we do not have the jobs for those young people to come into when they leave school, we are selling the next generation a dream. I know that the Minister and the Secretary of State value the telling of British stories, so the Minister can expect us to press him on that tomorrow.
When it comes to British stories from across our isles, we cannot overlook the value of our PSBs and the challenges that they face owing to competition from international streamers and changing audience behaviour. The uniquely British flavour of PSB productions such as “Fleabag”, “Derry Girls” and “Peaky Blinders” makes them some of our most popular and enduring exports, but it is no exaggeration to say that they are facing an existential challenge. Over the coming months we will hear from the leadership of the BBC, Channel 4 and Ofcom about the BBC charter review, the implementation of the Media Act 2024, and the wider challenges that they face. We will also want to discuss advertising with them and with other broadcasters. The shift from broadcast to online advertising is not new, but we must ensure that broadcasters are not left disadvantaged by outdated competition rules.
I want to make sure that the creative industries are delivering for their employers and contractors. CIISA, the Creative Industries Independent Standards Authority, under the brilliant stewardship of Jen Smith and Baroness Kennedy, is at a critical point as it concludes its consultation on standards today. It concerns me that while some parts of the creative industries make positive noises about CIISA, in reality they do not lean in, and other organisations —especially those with headquarters abroad—are reluctant to engage at all. I know that the Minister cares about this, but if we are to recruit and, critically, retain talented people, there must be no hiding place for bad behaviour.
I am delighted by the Minister’s commitment to our grassroots music venues levy, and for the signal that he will be willing to act if a voluntary solution is not working out. The establishment of the LIVE Trust is a step in the right direction, and I hope that more will be done to include artists and independent promoters in the conversations about where the money will go and how it is distributed. May I ask the Minister to give us an update in his closing speech?
Let me continue my whistlestop tour of the creative industries and the performing arts. Last week, the National Theatre launched its “Scene Change” report, which highlights the willingness of the performing arts to innovate in their business models. I am sure that the Minister will look carefully at its recommendations, but I want to pull out two key points. First, as he said, our creative industries generate more for our economy than aerospace, oil and gas and renewables combined, and they need a robust industrial strategy to match their firepower. Without investment, there is no innovation. The National Theatre, for example, is as much a totemic British export as BAE or Rolls-Royce. “National Theatre at Home” has brought productions to new audiences across the United Kingdom and, indeed, the world. However, few in the sector have the funds for such projects, and I hope that the Minister will consider the report’s recommendation of an innovation fund, which could drive growth. Secondly, UK Research and Innovation, which the Minister also mentioned, exists to foster research and innovation, yet the creative arts are wildly under-represented, given their gross valued added.
I know that the Minister enjoys a bit of theatrics, so while I was at the National Theatre, I wondered which of its productions reflected him best. There is “The Importance of Being Earnest”; one review of the current production noted
“just the right amount of delightful mischief.”
There is “Nye”, the story of a hugely influential Welsh politician taking policies through against enormous opposition. But then I realised that we needed to go back a bit further, to the smash hit “One Man, Two Guvnors”, because the Minister finds himself working for both the Science Secretary and the Culture Secretary. Our story begins as he tries to justify the Government’s proposals on artificial intelligence and copyright.
The Secretary of State for Science, Innovation and Technology has claimed that I do not understand the idea of consultations, and the Minister has claimed that I do not understand the detail of this consultation. I am beginning to feel a bit gaslit by it all, but I know that the Science Secretary is not saying the same thing to the creative industries, because I am told that he is refusing to meet them at all. I wonder whether the Minister is telling the creative industries that they do not understand the detail—because everyone I have spoken to in the sector seems to understand the detail perfectly, and they do not like it.
This is not about pitting the creative industries against Al. This is not a luddite sector; the creative industries use Al to great effect, and are always at the forefront of embracing innovation. The Minister said so himself: he said that they never abide by the straitjacket of conformity. The aim is a system that is transparent, as he said, but with licensing arrangements that protect intellectual property. The Government’s consultation paper says there is a “lack of clarity” in the regime, but the people I speak to tell me that the situation is perfectly clear, and that the large Al developers cannot legally use it to their advantage. Instead, the Government’s proposals move the onus on to creators to protect their work, rather than Al developers having to seek permission to use it. This is known as the opt-out. We have the opt-in, the opt-out, the opt-in, the opt-out—it is the legislative equivalent of the hokey-cokey.
The fact that unscrupulous developers are not seeking permission from rights holders does not mean that we should bend the system in their favour. Our world-leading creative industries have made it clear that the European Union’s opt-out model, which the Government’s consultation favours, does not work. They say that there is no existing technical protection measure that allows rights holders to easily protect their content from scraping, and web bots take advantage of that unworkable system to copy protected works, bypassing inadequate technology and the unclear copyright exception. Put simply, the EU opt-out system creates an even greyer area.
I know the Minister does not agree with me on that, but may I ask him to agree with me on just two points? First, if the Government are determined to go down the opt-out route, any opt-out must be tightly defined and enforced, so that developers cannot wilfully disapply it or plead ignorance. Secondly, any technical solution that protects rights must be adequately future-proofed, so that creators and developers do not simply end up in an arms race to find new ways to stop those who are hoovering up copyrighted works.
May I also ask the Minister to address two questions? I have always said that AI should provide the solution to AI, and that is what we all hope will happen, but what if a suitable technical solution that protects rights is not found? Do we stick to the status quo, and keep the onus on AI developers to follow the law? It is notable that the creative industries are not represented on the Science and Technology Cabinet Committee. Can the Minister confirm that they will have a voice when the final decisions are made? If they are not, as he says, to be the cherry on the cake, they will need that seat at the table.
I do not want to end my speech on a pessimistic note. There is much to be optimistic about for our creative industries; they are the envy of the world on virtually every front. The Minister loves a song quotation, and it is almost as if the top three songs of all time, according to Rolling Stone magazine, could provide the backdrop for him and his role right now. Do you know what they are, Madam Deputy Speaker? “A Change is Gonna Come”, but the Minister needs to “Fight the Power” and give our creative industries what they deserve: “Respect”.
Dynamic Ticket Pricing
Debate between Caroline Dinenage and Nusrat Ghani(5 months ago)
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Dame Caroline Dinenage
I am very fortunate to have been re-elected as the Chair of the Culture, Media and Sport Committee, but we do not have any members of the Committee yet. Any decisions about what the Committee will look at will very much be a group decision jointly taken, but this is certainly something I will be putting forward. I know the Minister has already announced some consultation of his own.
To return to dynamic pricing and the laws of supply and demand, mentioned by the hon. Member for Strangford (Jim Shannon), this is something that is used across different marketplaces. Uber employs a smart dynamic pricing mechanism that adjusts the cost of journeys in line with changing variables, such as traffic and current rider-to-driver demand. Hotels and airlines are another market that uses dynamic pricing, but they are very different. If people are stuck at Waterloo station, as I sometimes am, an Uber is not the only option of travel and, when people go on holiday, multiple airlines offer flights to the same city and different hotel options, but when it comes to live music, particularly in cases such as this one, there is one artist and one opportunity to buy a ticket.
The imperfections of the dynamic pricing mechanism were obvious to anybody who attempted to buy a ticket on this occasion, but whatever the rights and wrongs of its suitability for music ticketing and this market place, the most important issue is that fans were not warned about the use of dynamic pricing before they entered the digital queue. Those are the faults that led the Competition and Markets Authority to open its investigation into this debacle. It meant that people had no idea how much a ticket would cost when they logged in. Many fans ended up paying at least double the original listing price of £148, so four standing tickets could cost an eye-watering £1,400 once service and order processing fees were included. The CMA says that it will investigate whether fans were given “clear and timely information”.
Any free market economist would call this a classic case of information asymmetry. There was certainly a lack of clarity over how high ticket prices might eventually go, with the additional chaos of a time limit putting pressure on fans to make an imminent decision about whether they were going to buy.
Ticketmaster claims that the dynamic pricing mechanism is the best way to deter ticket touts, the logic being that any tout buying tickets in bulk would increase demand and therefore see his or her prices and margins slashed. The Guardian has already said that secondary ticketing platforms are advertising more than 4,500 tickets for this tour already, including from one tout who claims to have at least 33 tickets for Cardiff, Wembley and Murrayfield listed, for a combined price of over £26,000.
I am glad that this summer the Government announced a consultation on the secondary ticketing market, where tickets are sold in bulk by touts who often use bots to scout for tickets at face value and sell them well beyond the market value, but will the Minister set out the parameters and timescales for the work? When will it happen and what is it likely to include? He has now announced that the investigation will be widened to consider dynamic pricing and what happened in the Oasis situation, so can we have a reassurance that the eye will not be taken off the ball of the original consultation that he announced in the summer?
There are so many aspects at play. This method of resale is also the culprit for a large amount of money lost to fraud, with Lloyd’s estimating that £1 million was lost to scammers during Taylor Swift’s Eras tour alone. Will the Minister tell me whether the secondary market consultation will include conversations with digital search engines that are signposting customers into the hands of touts and not doing enough to get them direct to principal sales sites?
There is scope for an entire primary market review and for ticketing to be reviewed on a much wider scale. The Oasis episode has opened the eyes of fans to potential anti-competitiveness within the industry. As complaints about the ticketing process began to flood in, Oasis said it was their management and promoters who had agreed a dynamic pricing strategy with Ticketmaster. But, of course, their three tour promoters all have links to Live Nation, Ticketmaster’s parent company and, in effect, they are all the same party. So that party is making money hand over fist through the system, which keeps everything under the Live Nation umbrella.
For a typical tour, a Live Nation subsidiary promoter might take 10% of the face value of a ticket. A service charge of perhaps a quarter of that face value will then be applied, and some of that money will be going to Live Nation-owned Ticketmaster. The venue will take a cut at this stage, which, in all likelihood, will be a Live Nation-owned venue, too, as it owns 28 festivals and venues UK-wide. The process is repeated at resale, if people go through Ticketmaster at a higher cost than before, leaving Live Nation with an even greater cut.
The Minister does not need to be a public intellectual to see that there is a real perverse incentive for Ticketmaster to see tickets in the hands of touts. He will know that the US Department of Justice has slapped Live Nation with a lawsuit, citing anti-competitive conduct, while it is now well established that the company has a near monopoly in the UK.
Dynamic pricing is quite an effective way of rewarding a near-monopoly, with no upper limit on ticket prices, meaning a greater cut for the parent company. The great sadness of all this is not only that the system is punishing the fans—in this case, those Oasis fans for whom the music was so totemic, so life changing back in the ‘90s—but that, to add insult to injury, there is no trickle down to the live music ecosystem, like the grassroots music venues that Oasis first played in while honing their skills, the venues that made them, such the Boardwalk in Manchester and King Tut’s in Glasgow.
Although Oasis have since announced further tour dates, tickets to new dates will be sold at face value via invitation-only ballot. I cannot help feeling that the fans who paid through the nose via dynamic pricing are going to feel very hard done by.
I encourage the Minister to look at ways to amplify fans’ voices within the live music ecosystem. He might start by responding to the Culture, Media and Sport Committee’s report into grassroots music, which I have already mentioned. It was published in May. I know that we have had the small matter of a general election since then, but I would like to know when the response is likely to be forthcoming and whether the Government are minded to accept its recommendations. The recommendations include one for a fan-led review of music—something like the fan-led review of football that was led by my still friend, my former hon. Friend, the former Member for Chatham and Aylesford, Tracey Crouch—to look at how the music pyramid functions and how the money trickles down from the big players to those small venues and fledgling songwriters and artists.
The recommendations included a targeted VAT cut, which to grassroots venues would have represented a final hour of salvation in a sector that is widely accepted to be in crisis, and a live music levy, which would take a small proportion of the service fee from the pockets of the big venues and bring them right down to the struggling businesses at the grassroots. What is most pertinent to me about all this is that, while many of the 28 venues and festivals in which Live Nation owns a stake are flourishing, grassroots music venues are closing at a rate of two a week.
I am sure that the Minister is aware that, of the 34 music venues in which Oasis played on their first tour back in 1994, only 11 are still open today. And those venues are so crucial. They are absolutely fundamental to incubate our world-renowned talent. They are the R&D department for the music industry. They are a massive feeder into something that is fundamental to the UK economy and crucial to our soft power around the world. In a ticketing market gone wrong, there might have been a gram of comfort to some of the fans paying through the nose for their ticket if they knew that, in paying it, some of the money was protecting grassroots music venues in their communities and germinating the Oasis of the future.
I know that, like me, the Minister wants nothing more than to see our musical talent continue to thrill fans both at home and around the world, but behind every great act is a chance performance at a low-capacity venue that is struggling to keep the lights on, that is at financial breaking point, and that is a hair’s breadth away from closing its doors.