Kevin Brennan
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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.
Kevin Brennan (Cardiff West) (Lab)
I declare an interest, in that I earned £10.60 in royalties from PRS last year for my songwriting—and paid 40% tax on it. Will the hon. Gentleman address the role of search engines in all of this? I recall that a few years ago we did a search during a debate and found that most of the results that came up were from illegal sites. Is that an issue that he thinks the Government should also be doing more to address?
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?
David Warburton (Somerton and Frome) (Con)
It is a pleasure to serve under your chairmanship once again, Mr Gray. I too congratulate my hon. Friend the Member for Selby and Ainsty (Nigel Adams) on securing the debate.
When Thomas Edison shouted “Mary had a little lamb” into his phonograph in 1877, he precipitated a musical earthquake, to use modern parliamentary language. By the time I was a teenager in 1977, buying albums and singles was not only the only way to get hold of the music we all wanted, but the primary way in which many of us defined ourselves. Artists then enjoyed an incredible boom. Someone might record an album on to cassette now and again, but that would usually result in a trip on the bus to Our Price Records—where I worked for five years—to get hold of the real thing: the 12-inch record, with all its magnificent gatefold glory, in all its splendour. When we got our hands on this object of desire, the artists would in turn get their hands on all the rewards for the joy that they had uncorked, but that is not so today. Now, the songwriting artist can uncork just the same degree of joy and deliver it to the world, which can receive it with the same degree of rapture but without paying a bean. We can click on YouTube and watch or listen to pretty much anything we like anytime and anywhere—unless we are in Somerset, where there is no internet or mobile signal—and do so for nothing.
Kevin Brennan
Is it not the case that people have always been able to listen to music for nothing? We could listen to music on Radio 1 for nothing when we were teenagers in the ’70s. In a sense, streaming is the equivalent of that, in that it does not involve ownership. The issue is the lack of reward for the artist under this new way of listening to music for nothing.
David Warburton
Absolutely. The hon. Gentleman hits the nail with all of his head. He makes a perfect point, which I am just about to come on to; he is reading my mind.
When we click and listen, not only does the artist’s music become more ephemeral, more fleeting, less substantial, less physical, less tangible, but it also becomes commoditised, losing its uniqueness, brand and differentiation. In the way of the digital world, the user feels it is only right that the content should be provided free of charge. So now we have artists who attract huge audiences and whose content is played and shared millions of times, but who receive just chickenfeed—nothing more than a trace of recompense, having entertained people across the globe.
This began perhaps 15 or more years ago with download sites such as Napster and Kazaa—for which, incidentally, my company in a previous life provided all the mobile content globally. The music industry was slow to pick up on this revolution, but having got to grips with the download model, and with sensible paying business models finally emerging through iTunes and so on, it is now facing a new assault from the online streamers.
Kevin Brennan (Cardiff West) (Lab)
I had not intended to make a speech, but the debate has been so stimulating that I have awoken and got to my feet. I just want to make a few general points because I have not prepared any remarks.
Like my hon. Friend the Member for Bristol West (Thangam Debbonaire), I have been doing some activities with the Industry and Parliament Trust, which is an excellent body that allows parliamentarians to get a more in-depth knowledge of business. In my case, that has been in relation to the music industry. Over the past 18 months or so, I have been visiting all sorts of different businesses and aspects of the music industry from collection societies right through to record companies and small, independent songwriters and producers. I have had the opportunity to see all the different aspects of the music industry, as many different industries are involved in the production of music, which is a fascinating eco-structure.
Having observed lots of different aspects of the music industry over the past couple of years, it is pretty clear to me that there is a trend towards streaming; it is the main way in which consumers listen to music now and it will be into the future. That has implications for the way in which artists are remunerated.
Despite what hon. Members have said about CDs disappearing and so on, a surprising trend in the music industry has been the growth of the compilation CD, which has gone against the trend of declining CD sales in recent years as people want somebody to curate the vast amount of music that is placed in front of them on their behalf. People purchase compilation CDs because that curation is done for them. Those consumers are, generally, of a certain age but, nevertheless, that has been a surprising area of growth reported by some record companies.
There will always be a demand for physical formats of music. The growth of vinyl sales in recent years is an indication that people are hankering after something real, physical and tangible—with a gatefold sleeve and a wonderfully high-quality vinyl record—that they can tuck under their arm and carry down the road before going through the wonderful ritual of putting it on to their turntable and playing at home.
The growth in vinyl sales is not just among people like me who are rebuying all the albums that they gave away when they thought vinyl was disappearing 20 or 30 years ago, rebuilding their record collections and buying new music. It is also among young people. When I go into real, independent record stores such as Spillers Records in Cardiff—the world’s oldest record store and one of the finest establishments in the country—young people are at the head of the queue to buy vinyl. That physical format will remain because there will always be people for whom music is their ultimate passion and is much more than the wallpaper of their life. Music is actually tied into their identity as human beings in a powerful way.
Kevin Brennan
I will in a moment but I am just getting worked up.
There will always be a minority of consumers who fall into that category, but there are millions of other people for whom music forms less of an obsession but is, nevertheless, an essential part of their life, even if they are not as obsessed as some of us.
Kelvin Hopkins
I agree very strongly about CDs and vinyl. Does my hon. Friend agree that, as CDs are a physical form of music, sleeve notes, artwork and all sorts of other things add to the enjoyment of that music? It is not just about the sound through a set of headphones.
Kevin Brennan
Yes, I agree, but the point that I was about to make is that there are many millions of consumers for whom that is less important than it might be for my hon. Friend and I, who pore over such things. I am sure that he can remember, as I can, who played bass or slide guitar on which track, the exact length of each track, and who wrote the lyrics and the music—all the details that we store up.
The consumer model that is emerging is that the consumption of music will become part of most people’s general consumption of creative content, which will include film, music, television programmes and so on. We are moving into a world where people can consume creative content of whatever variety any time, any place, anywhere. That will work as a general subscription model in which most general consumers will pay for their internet, television and music all wrapped up into one family package. People already do that with their broadband, television services and telephone services. It is sometimes a bit of a stretch for consumers to go from nought to £10 but it is less of a stretch—although times are tough—for some illogical human reason, to go from £60 to £70 when they are paying into a subscription service. The Government, in their policy development, need to think through the implications of that trend.
We need the right copyright structure, legal structure and penalties, where they are required, to ensure that the people who make creative content are appropriately rewarded, whether it is from physical sales—which will continue to be an important part of revenue to the industry—or when their work is part of a more general subscription service. We must deal with the illegal content and the legal loopholes such as safe harbour that allow content to be consumed online without creators getting the appropriate reward. The Minister is a thoughtful person and I hope that he has something to say about how the Government see a way forward.