Copyright (Rights and Remuneration of Musicians, Etc.) Bill
3rd December 2021.
Kevin Brennan Labour, Cardiff West
I beg to move, That the Bill be now read a Second time.
I refer the House to my entry in the Register of Members’ Financial Interests, including some small earnings as a musician, and my membership of the Musicians’ Union and its financial support at election time. I also declare my membership of the Ivors Academy, which represents the interests of songwriters and composers.
Having taken an interest in the music industry over the 20 years that I have been in the House, including completing a fellowship with the Industry and Parliament Trust on the music industry, at one time or another I have probably crossed paths, and attended events, with almost every organisation that is interested in the Bill and its proposals. Some in the industry like to hide the wiring with bright lights and promises, but as policy makers we should want to get this right for our wonderful British creators, the bedrock of the music industry. Let me make clear from the outset that my interest is not to pursue a party political battle, but to work across the House, and across the sector, with anyone who is interested in achieving better remuneration for musicians, songwriters and composers in this new and exciting era of music streaming.
When I was first elected to the House, the music industry was encountering an existential crisis. The new digital technology of file sharing meant that, for the first time in history, it was possible to copy and share recorded music instantly, at zero cost, with no physical medium required. That led some to question whether it would ever again be possible for creators to earn money from their recorded music, and over the years it brought a steep decline in revenue to the music industry.
My right hon. Friend Sir Greg Knight, who is in his place on the other side of the Chamber, my hon. Friend Pete Wishart and I are occasionally together in a musical enterprise called MP4. All of us as a group, including our former colleague Ian Cawsey, argued strongly at the time—this was one of the reasons we put the group together, apart from to have fun—that it was vital for the UK economy and for creators that we supported the music industry in its efforts to protect, extend and enforce copyright, and to develop new technologies to allow for safe, legal and monetised consumption of music so that rights holders and creators could be paid. Across parties, we supported the preservation of intellectual property when some flirted with the anarchy of piracy.
Eventually, that new technology came along, first with legal downloading and then with streaming on services such as Spotify and Apple Music, which I know many right hon. and hon. Members are familiar with—so much so that that is now the dominant way in which people consume music across the world, and particularly here in the UK. It makes up more than 70% of UK recorded music revenues, generating hundreds of millions of pounds of new revenue for the UK music industry.
Toby Perkins Shadow Minister (Education)
I congratulate my hon. Friend on his Bill. Many people watching the debate may think it is purely about the household stars and that we are arguing over people who are already wealthy. Yesterday, however, I met a viola player who has played on 20,000 different records that are online but does not receive a single penny for those contributions. Is not my hon. Friend’s Bill not just for the household stars but for every single musician out there?
Kevin Brennan Labour, Cardiff West
My hon. Friend is absolutely correct, and I will go on to explain why. It is interesting that orchestra players often receive nothing when their music is streamed. In fact, sometimes the only person who receives money is the only person who does not make any noise—namely the conductor of the orchestra. That is yet another irony of the system that we are discussing.
Let us be clear: streaming is an incredible technology. It enables us to have almost the entire catalogue of the world’s music in our pockets. To those of us who grew up in an analogue world, carrying around 12-inch vinyl copies of the latest David Bowie album under our arms, it is nothing short of miraculous that we can play music in this way. But artists and songwriters have not had the same boon from this new windfall as the major record companies.
Andrew Slaughter Labour, Hammersmith
I congratulate my hon. Friend on his Bill. Does he agree that it is a scandal that artists are getting perhaps a quarter of what the big record labels are getting from streaming services? As my hon. Friend Mr Perkins said, we are not talking only about the stars, but about people such as music students looking for a career in music, as well as songwriters and performers. Many in my constituency, where the cost of living is extremely high, are getting no money and they have just had a terrible two years.
Kevin Brennan Labour, Cardiff West
My hon. Friend is absolutely correct. I want those young people to have the possibility to earn at least some part of their living from recorded music and not to have to rely entirely on live music. I will go on to develop that point further.
Alistair Carmichael Liberal Democrat Spokesperson (Home Affairs), Liberal Democrat Spokesperson (Northern Ireland), Liberal Democrat Spokesperson (Cabinet Office)
Before he does, will the hon. Member give way?
Kevin Brennan Labour, Cardiff West
I will just make one further point and then I will give way to the right hon. Member.
I was saying that artists and songwriters had not had the same boon. I think Members across the House will be staggered to know that the chairman and chief executive officer of one of the three major corporations that dominate the market of recorded music is set to receive more income this year—£153 million, according to industry press reports—than every songwriter and composer in the UK combined, including the rich ones, will receive from the streaming of their music in this country. Such facts, and the desperate plight of musicians who, as my hon. Friend Andy Slaughter was just saying, have been unable to perform live due to covid, have triggered close scrutiny of exactly what is going on with the economics of music streaming.
Alistair Carmichael Liberal Democrat Spokesperson (Home Affairs), Liberal Democrat Spokesperson (Northern Ireland), Liberal Democrat Spokesperson (Cabinet Office)
I congratulate the hon. Gentleman on his Bill and I am happy to support it. I hope that it gets Government support at some stage, if not necessarily today, because we should all see this as an important part of the levelling-up agenda. That agenda will never achieve the things that we want it to unless it addresses the imbalance of power between big corporates on the one hand and the individual and the small business on the other. That is at the heart of his Bill, and it is why all those who purport to support levelling up should support it today.
Kevin Brennan Labour, Cardiff West
The right hon. Gentleman is right; our duty as politicians is not only to utter rhetoric occasionally, but to turn it into reality. In the case of the music industry, he is absolutely right that this is a levelling-up measure.
John Lamont Conservative, Berwickshire, Roxburgh and Selkirk
I congratulate the hon. Gentleman on the Bill. Does he share the concerns of some that, although the Bill might increase the income of some artists, there is a real danger that other artists in the sector might see their income fall and that that might affect investment?
Kevin Brennan Labour, Cardiff West
I thank the hon. Gentleman for his intervention; I know that a series of points have been made about the Bill, and I will come on to that point later.
My Bill largely endeavours to bring into law measures that were proposed in a Digital, Culture, Media and Sport Committee report from earlier this year. I pass on to the House the apologies of the Chair of the Committee, Julian Knight, who cannot come here today because he has a constituency emergency. The report, titled “Economics of music streaming”, was unanimously agreed, cross-party, after many months of hearings with witnesses from all parts of the music industry and after hundreds of written submissions on the subject were received. I think it is fair to say that my fellow Committee members, including my hon. Friend Julie Elliott, who is sitting close by me today, were staggered—perhaps those who had not been particularly attentive to music industry issues—by some evidence that they heard and by the seeming unwillingness of those at the top of the music industry to acknowledge the problems that we uncovered, and to act to put them right and rebalance the music industry to support creatives.
I welcome the fact that one of the three majors, Sony, did at least agree to pay unrecouped artists with pre-2000 contracts some money when their music is streamed. Sadly, the other big two, Warner and Universal, have not followed suit, and in the latter case, a public share offering has been issued that will result in the extraordinary £153 million pay-out to the company’s boss, at a time when many artists have been struggling to pay their rent, as we heard in evidence.
I want to outline for the House the main measures in my Bill. It extends the existing Copyright, Designs and Patents Act 1988 to modernise the law for the new world of music streaming. One of the features of streaming technology, which I am sure hon. Members are familiar with, is that when someone plays a piece of music on a streaming service, it is not quite the same as the action of choosing to play a record, but neither is it quite the same as listening passively to music on the radio. How this is treated in law is crucial, because it affects how much artists and songwriters get paid.
When we stream music, sometimes we choose what we want to listen to or sometimes an algorithm chooses it for us based on the things that it thinks we might enjoy. Frequently, we might start playing something of our choice and the service will continue to play music to us that it chooses, which, in some ways, makes it more like a radio station. To emphasise that point, I note that there is even a feature called “Radio” on the platform Spotify, as hon. Members may know. During the course of our Select Committee inquiry, we learned that music listening is gradually moving from traditional broadcasting towards streaming. It has been reported from a speech by a Spotify executive that its corporate aim is gradually to replace radio as the main way that people listen to music.
Under existing UK copyright law, when music is played on the radio, artists are entitled to an unwaivable payment called equitable remuneration, which is an important part of the way musicians can earn income from recorded music, on top of any session fees and on top of the terms of any recording contract. If radio listening declines in favour of streaming, as Spotify predicts and as is happening, clearly musicians will lose income from equitable remuneration as that trend develops. Record labels argue, however, that streaming music is the equivalent of the sale of a record; the jargon in law is “making available”. They therefore say that musicians should be paid on the basis of recording contracts, many of which were signed in relation to the production and distribution of physical records before the technology of streaming was even invented.
Andy Carter Conservative, Warrington South
As the hon. Gentleman probably knows, I worked in commercial radio for more than 20 years and spent much of my time negotiating with record labels as part of a working group. I think that UK musicians are being devalued, and I do not think that there are fair earnings, but I think that ad-funded streaming services are not paying fairly for the music that drives them. That is the issue that we really should tackle.
Kevin Brennan Labour, Cardiff West
I thank the hon. Gentleman for his well-informed intervention. He is right that there is an issue with ad-funded streaming services and the rates that they pay. The Committee concluded that the fix that I am proposing today was the best way to build on existing UK law to rectify the matter, but there is an issue with how much streaming services pay and with how much they are paid by record companies: about 30%, after the Chancellor has his bit, of the cut from the subscription we pay and the ad revenues. It is a valid point, but the Committee concluded unanimously across the parties that this is the best way forward.
My Bill, as recommended by the Select Committee, would provide performers on a recording with a right to an unwaivable payment or equitable remuneration when their music is streamed, akin to the existing right in radio and broadcast. Importantly, it would not take away the right of labels to value their exclusive rights, which would remain intact. Nor would it dictate what the value of any remuneration should be; that is best settled, as it is now, by agreement between the parties. However, it would make it clear that the payment is an additional payment and could be referred to the existing copyright tribunal where there is a difference of opinion.
Natalie Elphicke Conservative, Dover
I thank the hon. Member for this important debate. In what way would these proposals help in the situation in which Dame Vera Lynn found herself? She was one of the most loved entertainers and icons in the country, yet when there was a revival of some of her most famous and beloved songs, she did not receive royalties under her contract, which had been conceived and signed before the internet had even been considered and built. I would be grateful if we explored that point.
Kevin Brennan Labour, Cardiff West
The hon. Lady makes a powerful and pertinent point. She is absolutely right: wonderful British artists such as Dame Vera Lynn who recorded music in an era when—let’s face it—some record contracts were not exactly favourable towards the artist are still held to their terms by record labels. Sometimes they are unrecouped, which means that the record label has decided that it does not owe the artist anything at all because of the original advance that it made on the record. The point is that labels no longer have to manufacture or distribute records, there is no longer a percentage getting broken on the way to the record shop—all those costs are gone. They still have Dame Vera Lynn’s recordings, put them out there and make money from them, but under the terms of their legacy contract, they do not have to pay a penny. I will come on to explain how my Bill would take care of the very issue that the hon. Lady rightly raises.
The second major provision in the Bill—the first dealt with equitable remuneration—would place a transparency obligation on those who have had rights transferred or licensed to them, requiring them to supply timely and comprehensive information to the songwriter, composer or artist about where and how their music is being played, so that they can be sure that they are being paid what they are due. The Select Committee recommended this after hearing evidence that it is often very difficult for artists and songwriters to gain any clarity or to audit their works. We heard of money that should have been paid disappearing into what are known in the industry as “black boxes”. It is clear that songwriters suffer particularly because of poor data standards.
On the subject of the value of streaming to songwriters, the Committee expressed concern about how the big three record labels, which I mentioned earlier and which wield huge market power, own large parts of the music publishing business too, and how that might influence the way in which revenue from streaming is distributed. If the big three make more profit from their rights in the recording than they do from their rights in the publishing, there is a disincentive for them to pay songwriters a competitive share of streaming revenue. The publishing right ought to be competing for more value against the recording, but it appears to be stifled by the problem of ownership.
At this point, I want to praise the Government for noting the concerns expressed in our Committee’s report about the impact of monopoly power and cross-ownership in the music industry, and for referring the matter to the Competition and Markets Authority for a study of potential market failure. They deserve due credit for doing that. Let me say to the Minister that whatever the outcome of today’s debate, reform is needed. I hope that he and the Government will continue to “lean into” this issue and press the big three record labels to come to the table, acknowledge the issue and offer solutions, rather than remaining—as they occasionally seem to be—in denial. Perhaps he will say something about that when he responds to the debate.
The third major provision in the Bill would allow for contract adjustment when someone, often at the beginning of their career—we all know constituents like that, desperate for a chance to have their music heard—enters into an agreement which eventually results in a payment to them that is disproportionately low in comparison with subsequent revenues derived from the exploitation of their music. This right would strengthen the position of the weaker party entering into such an agreement, and it would encourage rights holders to ensure that agreements were fair and equitable in the first place, as ultimately the songwriter or performer would be able to appeal to the copyright tribunal to adjudicate on that contract.
The fourth and final provision would give UK songwriters and artists a right that is available in other jurisdictions, including the United States, but not in the United Kingdom. If after 20 years they are dissatisfied with the efforts being made by record labels or publishers—and I am glad to say that this would apply to Dame Vera Lynn, were she still with us—musicians could give notice of their intention to reclaim their rights to exploit their music, or transfer that right to another label or publisher that might do a better job than the existing one.
The importance of this proposal was highlighted very recently in the case of the UK recording artist Four Tet. Dissatisfied with the amount of money he was getting via his record label from streaming, he engaged lawyers to challenge his contract. The response of his label has been to remove his music altogether from streaming services, effectively a restraint of trade for that artist. His recording contract predated streaming. Under the provisions of my Bill, he could give notice that he intended to reclaim his music. This would incentivise labels to do better deals with artists—and, in fairness, many independent labels do have better deals with artists nowadays, often taking rights for 15 years rather than the lifetime of copyright, as has been the tradition.
Let me now anticipate some of the concerns that Members may have. I welcome their interest in today’s debate, but if they have been following the debate outside the House, they will know that a number of issues have been raised. It has been said, for instance, that the UK music industry creates a great many jobs as well as growth and exports, and is an important part of the UK’s soft power abroad. Why, then, should we rush to introduce legislation that could affect that world-leading status? I remind hon. Members that one in 10 streams originates in the UK, but only around a twentieth of streaming income comes back to the UK. Far from undermining our position, my Bill seeks to bring much of that lost income back into the hands of working British professionals.
This is an evidence-based reform. I know some in the music industry say we need more evidence—I am all for evidence—but it would have been helpful if the record labels and the British Phonographic Industry, after two requests from the previous Secretary of State for Digital, Culture, Media and Sport, had supplied the evidence that the Intellectual Property Office asked for and had volunteered some data on their royalty distributions. Why, even after the Secretary of State twice told our Committee they should do that, did they not provide the evidence? If they are going to say we need evidence-based reform, they need to supply the evidence.
Members may have seen a recent piece from the former chief executive of EMI UK suggesting that measures in the Bill, although well intentioned, could undermine the recovery of the UK’s music sector following the impact of the pandemic. That is a slight fallacy, because in fact the pandemic has had no overall effect on the recording industry. Streaming revenue actually grew by 20% in 2020. The sad fact is that EMI is no longer a British-owned company, much to my and others’ regret. Inexplicably, the chief executive appears to be conflating the recording business with the live business, which has been decimated by covid and emphasises even more why musicians need to be paid for their recorded music.
Some hon. Members will have seen the concern expressed about independent record labels, which may invest the most in new and emerging musical talent. Would my Bill reduce the amount of funding that smaller labels have available for supporting fledgling artists? The chief executive of the Association of Independent Music made a speech to the European Union five years ago calling for these exact measures to be implemented across Europe—that person was representing artists at the time. It is interesting that someone says there is not enough evidence, yet five years ago they were calling for the very measures I am calling for today. Plenty of evidence has accumulated in the meantime.
It is important to say that equitable remuneration can be applied in such a way as to take account of smaller independent labels that already have ethical business practices. Of course, in practice, they can and should operate in that way by agreement.
Colleagues will also have been told there is no general consensus in the music industry on what the impact of introducing equitable remuneration for streaming would be, and the argument goes that the Government are therefore right to undertake an extensive programme of research with all parts of the industry. I make it clear that I welcome the fact the Government are committed to undertaking this work, but I call on the record labels to collaborate and co-operate fully and to provide the information required for the Government to get a grip on the details. That does not preclude allowing the Bill its Second Reading and allowing it to go into Committee and the subsequent parliamentary stages, which will take a long time in any case, where the research can inform amendments and the Bill’s passage. The Government ultimately have control of the timetable.
Some have suggested that reintroducing equitable remuneration might have the unintended consequence of some independent artists receiving less money from streaming because session musicians would be entitled to be paid. In fact, fully independent music accounts for a very small proportion, probably 6%, of the total market, and fully independent artists who experience success are the ones making the most from streaming. The administration of ER may be cheaper to such artists than their current distribution deals. In any case, it is likely that any impact would be marginal, and it would be entirely possible to adapt the proposal to meet any concerns that arise.
Another concern that has been mentioned is that equitable remuneration could see record companies offer worse contracts, reduce advance payments to new talent or disinvest in the UK to make up for the loss of revenue from streaming. The Committee heard that advance payments ultimately keep artists in debt for a long time, so perhaps a cooling effect on the size of advances would not be a bad thing. As for companies, which are sometimes making 20% profit margins in the streaming era, with none of the costs associated with distribution or manufacturing, saying that they will pass any cut to that margin on to their own artists, that is surely the strongest possible argument that there is something very wrong with competition in this market. Anyone who believes in competition in this market should note that approach.
It has also been said that multinational record labels might decrease their investment in the UK if the streaming market became less competitive, but actually these changes will make the UK market much, much more competitive. The music industry is characterised best currently as an oligopoly—that is clear to all. One company may control as much as 40% of the market. Giving artists more control over their rights and letting those rights change hands more freely will hugely open up the market to smaller independent labels and artists. When changes were made in 2003 to copyright in relation to film, similar points were made, but we have seen the burgeoning expansion of the British film industry since that point, and I want the same for music.
Bob Stewart Conservative, Beckenham
The hon. Gentleman talks of equitable remuneration, and he mentions Dame Vera Lynn and the sad fact that she is no longer with us. Does equitable remuneration still apply to the heirs of her music estate?
Kevin Brennan Labour, Cardiff West
Ownership of copyright, as with publishing a book and so on, does extend in the case of composers and songwriters beyond the 75 years after death, so it does apply to their estate. In the case of recording artists, it applies for 70 years after the date of the recording. It was extended by 20 years in an initiative that my hon. Friend the Member for Perth and North Perthshire and my right hon. Friend the Member for East Yorkshire supported in the mid-2000s, and that is why it is 70 years rather than 50 years.
I am immensely proud of the contribution that British musicians and songwriters have made to the culture and economy of the UK. Anyone who has watched the recent clip of The Beatles documentary where, out of the void, Paul McCartney conjures into being the classic song “Get Back” after only a couple of minutes can only be stunned by the sheer genius and sweet mystery of musical creation. That tradition of great British artists, musicians and songwriters continues to this day, but it is threatened if we do not adapt our legal structures to ensure that artists, composers and songwriters are properly paid when their music is played, in whatever format develops. Some with vested interests to protect would almost have us believe that this well-researched proposal, based on a groundbreaking parliamentary Select Committee report, agreed unanimously on a cross-party basis, would lead to some sort of anarchy in the UK music industry. There is an element of hyperbole and panic in their response. Much as I love that seminal British punk record of rebellion, this Bill is not about anarchy in the UK; it is about equity in the UK music industry, and I ask the House to support its Second Reading so that we get on and scrutinise it in the detail that such a serious proposal deserves.