Kerry McCarthy
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Kerry McCarthy (Bristol East) (Lab)
It is, as ever, a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on securing the debate and on all the work that he has been doing with the all-party parliamentary group on music.
This issue is of real and growing concern to musicians and has been for some time. As an MP for Bristol, which a fairly recent survey showed had more musicians than anywhere else in the country, I thought it was important to speak in this debate, and I am pleased that my constituency neighbour and hon. Friend the Member for Bristol West (Thangam Debbonaire) is also here to speak. She will be joining me in supporting Bristol’s bid to be capital of culture in a few years’ time, and obviously the musical contribution that Bristol can make is a very important part of that.
I associate myself with the views expressed by the hon. Member for Selby and Ainsty on the need for further action to address piracy, and especially on how search engines facilitate piracy and the need to clarify the legal ambiguity of safe harbour provisions, which are allowing the development of parasitic digital platforms that leech value from this country’s creative industries. I will be interested to hear what the Minister has to say and whether he plans to introduce clauses into the Digital Economy Bill to address that loophole, but today I want to speak on behalf of artists and about the need for a more equitable distribution of digital royalties between them and their record companies.
For many years, artists have spoken out about the considerable difficulties that they face in trying to make a living from the royalties that they receive from streaming. Taylor Swift pulled her last album from Spotify to make that point. Clearly, Taylor Swift will not be short of money whether or not she sells material through Spotify, but it was important that she took a stand on behalf of the many musicians who rely on royalties to make a living. If they do not get sufficient revenues from digital streaming, they literally cannot afford to be professional musicians.
Mr Gregory Campbell (East Londonderry) (DUP)
Does the hon. Lady agree that although an artist of the standing of Taylor Swift has considerable financial and musical clout across the globe, that is not shared by the hundreds and perhaps thousands of musicians who have not yet broken through and perhaps will never reach anything like the standing that she has? What we are trying to do today is represent those artists, as opposed to one who has made a breakthrough and can take a stand. We are representing the many who cannot do that.
Kerry McCarthy
I totally agree. A few years ago I went into BPI’s offices and the staff there showed me the impact of illegal downloading on record sales, using Adele as an example. It was quite startling to see, by the second, how many hundreds if not thousands of illegal downloads there were. I said to them, “Yes, that does make a certain point, but I want to see what impact it has on the income of a struggling indie band that is on the verge of breaking through.” It would be easy for people to say, “Well, Adele is selling millions.” Yes, she is clearly very wealthy and perhaps can afford for people to access her content for free, but it is the principle, is it not? That principle should apply across the board. I have always said that it is up to artists whether they want to make their content free. If they see that making their content free online is a good move for their career, that is their choice, but it is equally their choice to be paid if they want to be paid, and people should not download illegally.
Going back to the legal streaming services, if we are to secure the future sustainability of the sector and encourage vibrant new acts to come forward, it is vital that artists can earn a decent living in the digital environment. The problem will only become more acute in the years ahead, as digital music revenues will continue to outstrip those from physical formats such as CDs and vinyl. There is a bit of a vinyl revival, but that will always be a niche area. It is illustrative that when I was talking to my teenage and early twenties nephews and nieces the other day, I found that they had never bought a CD. I think it is on the verge of becoming a redundant format.
There is an issue about how Spotify calculates payments to rights owners. It is too complex to go into detail about here, but it means that the money that we as individual consumers pay for streaming does not directly go to the bands and artists we are listening to the most, and it penalises bands with strong fan bases.
The primary cause of the problem that artists face with streaming royalties, though, lies in the contract that they have with their record label. Those contracts continue to pay artists royalties for streaming as though the stream were a physical sale of a product. They are continuing with a royalty rate from the pre-digital era, so things such as the manufacture, storage and distribution of a physical product such as a CD or vinyl album are factored into the contract. That simply cannot be justified when there is no physical product on the market.
Jim Shannon (Strangford) (DUP)
Is not the case that the artists now have to accept that they need to be part of the digital streaming process whether they like it or not, and perhaps be dragged screaming and shouting into a new age where they do not want to be? That is the information that I am getting back.
Kerry McCarthy
It is always the choice of an artist how they want to market their product. Some artists are quite happy to do it on a part-time basis and just put their stuff on SoundCloud or whatever, or are happy just to be on the live circuit. It is clear that online content and streaming services are the future of the industry, but my point is that at the moment the musicians get only about 10% to 15% of what the label receives from the streaming service, because the physical cost of a product is built in. There are some contracts that are far more favourable to musicians, but by and large they are not, which the Musicians’ Union has been campaigning on.
In almost all cases, an artist will never see any of the online royalties at all, as their contract sweeps up the rights they have to royalties from the sale of recordings until they have paid back the advance they received from the label and any expenses incurred recording and promoting the artist. I argue that a fairer split of 50:50 would seem entirely reasonable, especially as this already exists for public performance and broadcasting income thanks to the equitable remuneration right. The Musicians’ Union has argued that when performers transfer their assailable rights, 50% should be a non-assignable equitable remuneration right, with the other 50% being an exclusive right assignable to the record company, to ensure that performers receive income from digital sales and streaming whether or not they still have an outstanding balance with their record label. For their part, record labels would be able to recoup their investment from royalties assigned to them under the exclusive right.
The Fair Internet for Performers campaign is taking this issue forward Europe-wide by campaigning for an amendment to EU copyright legislation. The hon. Member for Selby and Ainsty has already mentioned what the impact of Brexit would be and whether in a few years’ time we would be free to set our own rules. I would be grateful if the Minister clarified where we are in the limbo years, as we might call them. Will we adopt the EU copyright legislation as national legislation? Does he regard the EU legislation as a practical way of adequately rewarding artists in the UK for the streaming of their recorded performances?
It is vital to ensure that income streams actually reach creators, to ensure not only that performers can make a living from their art, but that corporations continue to have that talent to exploit, and for the future of new music and art, which I think all of us in this room would agree is incredibly important.
Pete Wishart (Perth and North Perthshire) (SNP)
It is a real pleasure to serve under your chairmanship, Mr Gray, so long as you promise never to do those Scottish accents. I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on securing this important, though short, debate. I commend him for his diligence in chairing the all-party parliamentary group on music. I have an interest as a former recording artist, and I refer to my entry in the Register of Members’ Financial Interests.
In my 15 years as a Member of Parliament, I have had the great pleasure of speaking in most debates on issues related to the creative industries and the remuneration of artists. I have a sneaking suspicion that, in the future, I will be standing here once again to discuss the same issues and challenges that we have heard so eloquently described by Members on both sides of the Chamber this morning. At the heart of the matter is how we ensure that our artists and creators, and those who are prepared to invest in their talent and creativity, are properly rewarded for the fantastic works they produce. Rights holders and investors should be properly rewarded for all their commitment.
The hon. Gentleman mentioned the success of our industry—we have always been world leaders in music. Our incredible success over the past few years is testament to the array of talent across the United Kingdom not only in music but in all our world-leading creative and cultural sectors. As legislators, it is our job to continue to create the best political environment to allow that talent and creativity to grow, thrive and develop. We cannot be the artists, although the hon. Member for Cardiff West (Kevin Brennan) and I attempt it on occasion with the world-renowned MP4. Our main job is to ensure that we do nothing that disrupts the wonderful creation of talent. More than that, we must see what we can do to create the best possible environment and conditions for talent to develop, grow and prosper. We must also ensure that this country remains one of the top exporters of music worldwide, as we have done pretty successfully over the past few years and decades.
I remember securing one of the House’s first debates on the music industry, and at that point it was all about piracy and digitisation. Music was just about the first discipline to get involved in the tensions and difficulties of the move towards digitisation. We were the first creative sector to do so, and we blazed a trail for others. We challenged some of the things that were happening. In the early days of digitisation and the move online, a culture started to emerge that suggested that, because the internet was out there, everything should therefore be free and accessible. Political parties were created to foster that belief. Pirate politicians were elected in several European nations to serve and fulfil that strong political culture. All that was happening, and the music industry tried to find a way through and had to meet many difficulties and challenges as the first creative industry in that environment.
Over the years, music has been relatively successful in meeting some of the online challenges. Piracy is not the major issue, although it is still a big issue—I welcome some of the measures in the Digital Economy Bill, which will treat theft online in the same way as theft of physical products from a shop or supermarket. We have fired a shot across the bow of the good ship pirate over the past few years, and we are making steady progress. I congratulate successive Governments on their vigorous attention, and the availability of streaming services and safe harbours is a real attempt to address some of the illegal activity.
Even with that progress, artists, creators and rights holders still struggle to secure a just reward for their efforts. The hon. Member for Strangford (Jim Shannon) and others have mentioned that streaming has been a massive success. I am a massive user of Spotify, and I like the way that I am able to access music, as do millions of people across the country who buy into the service, which allows us to listen to music in the way we want. There are all sorts of playlists, and the service is designed to be attractive to users. Such services have been successful, but we must secure a properly functioning digital market that enables creators and rights holders in the music industry to secure the true value of their works online. One of the most important things that we have to do is to address what can only be described as the value gap between rising music consumption and decreasing revenues, which both undermines the rights and revenues of those who create and invest in their own music and distorts the marketplace.
Someone is growing rich off the fat of the creative endeavours of our musicians and artists, and I assure the House that it is not the artists. Somebody is massively profiting from the proliferation of music, and we owe it to ourselves to examine what is happening. I suggest that those who seem to be making the tidiest of profits are the platforms and hosts. Such companies add next to nothing to this country’s creative activity but somehow, because of their design, their algorithms, their marketing and their ability to provide access to this content, they seem to be making the largest profits.
Kerry McCarthy
Whenever I highlight the extent to which musicians rely on the income from their work, someone always answers, “Well, they can make money from touring and merchandise.” The big artists can do that, because the people who go to their concerts are prepared to pay vast amounts of money—such artists attract people who have the income to buy the T-shirts—but most bands cannot survive on touring and merchandise alone.
Pete Wishart
The hon. Lady is right. Making records and producing albums seems to be a loss leader for all the other activity that musicians are now expected and ordered to do to try to ensure that they are able to make a living from music. She has seen the figures from the Musicians’ Union that suggest just how depressed is the average musician’s income. I cannot remember the figure, but I am sure she knows better than I do that it is significantly low. That is a real issue for so many struggling artists. I am an unrecouped artist. I sold about 1 million records, but I have never received a penny for any of the records I sold when I was signed to a major record label. There was an expectation that we would make money from all this other activity. I concede that we did relatively well, but we did not do well from record sales. There is something incredibly wrong with the marketplace.
Streaming might be an opportunity for us to consider how we properly reward musicians for the works they produce. I am attracted to the 50:50 concept of the Musicians’ Union. Let us work towards recouping the investment that rights holders and record companies make in the artists, but let the artists start to earn a little from streaming services. Artists earn an absolute pittance from streaming services, and we should at least allow them to make that pittance a little more substantial.