WARNING – The following article is only of interest to those who find the discussion of musical copyright in the internet age engaging. I think that should be anyone who listens to or pays for music online in the 21st century but I accept some may disagree with that view…
Now the wasters have gone I thank the three of you that have kept reading, you truly are wise souls. What I want to talk about is a recent speech at the excitingly titled “Music 4.5 IP & Licensing” event in London by ERA boss Kim Bayley. The ERA is the Entertainment Retailers Association and represents people who sell all those lovely cultural artifacts that are created by auteurs, geniuses and Justin Bieber and then parceled into easily consumed DVDs, CDs, mp3s and the like. These days that means HMV, some independent retailers and a bunch of online stores. The speech was concerned with only the latter of those and in particular the online stores that sell digital music. The full details of her speech can be found here but in essence she was saying it’s far too complex to get the required licences to sell music online; the fragmentation of rights between labels, publishers and dozens of collecting societies is far too confusing and the lack of decent databases makes even identfying who owns what music very difficult.
Obviously I’m a big and vocal supporter of copyright and do think that online stores should get the right licenses and ensure that creators are paid when their music is used or sold. It’s also not, despite what anyone might want, ever going to be a simple process with the complexity of law and data volumes involved both being hugely challenging. That said I agree with much of what the speech contained, I’ve written about these issues before and no doubt will do so again. The music industry has to stop using 100 year old business models and have an offering that new, agile online businesses can use to offer music digitally. If the industry doesn’t support the services that want to be legal then music fans have no choice but to go the illegal route and that helps no one. Well apart from the pirates I suppose. So I thought it was very sensible in general however some of her smaller points were a little unfair on collecting societies who do a reasonable job in a complex business. I think she could have thought through some of those arguments a little more as right now the industry can point to her mistakes and poor assumptions and write off her whole speech.
Helpfully Bayley outlined her top 10 issues with the process and, as everyone loves an internet articles that includes numbered lists, I thought we could have a close look at each one and see, in my humble view, what stands up and what needs more thought (the original points are in italics, my genius not in italics):
1. Does it really make sense that while in the physical world publishing rights are accounted for in the cost of a CD, in a digital world services need to secure three separate licences?
No, it makes no sense it all. Someone, somewhere managed to make the argument that downloading an mp3 is somehow a performance because it moves down a wire. I know, mental isn’t it? Did I watch Beatles perform last night or did I just make a copy of one of their songs from Apple’s servers? Obviously the latter but the music industry doesn’t think so, instead it’s classed as a performance and a whole load of new rights holders get involved and more complexity for everyone.
2. Does it really make sense that in a supposed Single European Market digital services are obliged to deal with over 30 different licensing bodies to secure publishing rights alone?
No it doesn’t, there is in fact a complete lack of sense, although for once you can blame the EU and not the music industry. The latter wanted to set up one central place for managing the rights but the EU said that was uncompetitive and banned it. A, stupid, short-sighted decision if there ever was one and one of the times when the EU has actually annoyed me. (For some reason the ruling isn’t a key part of the UKIP argument, probably because you need a medicum of intelligence to understand copyright and therefore well outside the capabilities of the average UKIP supporter.)
Anyway thankfully after years of confusion and inefficiency things are changing and a handful of central “hubs” are being created so an online service only need get a licence from a handful of places not 30. It’s taken far too long to get here but least it’s not the music industry’s fault for once.
3. Why is it that songwriters have to fund the costs of all these different collection societies – can it really make sense that five collecting societies alone cost half a billion dollars to run?
History is the only reason – they were set up nationally a century ago and it’s just stayed that way. This may change in next few years as we see more centralisation of processes and systems (Sweden’s ICE database shared by the British, Swedish and German societies is a good example) but it’ll be slow.
As for the cost, I have no idea where that figures comes from. The UK’s PRS only costs about £60 million to run, a reasonable figure for a complex business employing hundreds for skilled people (like me…). I promise if songwriters and publishers each had to manage it themselves it would cost a hundred times that figure.
4. Does it make sense that while almost all digital services account monthly, it can take literally years for the money to reach the artist?
Nope it does not make sense and it doesn’t happen when managed by proper collecting societies, such as PRS, who pay out money from online services in 3-6 months. It is fair to say, however, that not every collecting society in the world is so efficient and those that aren’t shouldn’t be allowed to continue that way.
5. Why is there an apparently arbitrary allocation of the publishing rights between performance and mechanicals in different territories?
A technical question with a technical answer but basically because they can do whatever they want without logic or sense. Generally it comes down to who wins the fight for the money in each country, if the publishers win it goes to the mechanicals, if not then it might go the performance.
6. Is it right that a digital store in one territory is prevented from selling to consumers in another territory?
Actually yes it is, if they haven’t got the the licenses for the other territory. Of course it should be much easier to get those licenses, ideally from only one or two places, but you should still have to get all of those licenses.
7. Can it be right that licensing bodies are unable or unwilling to provide details of precisely which rights they control and therefore services are obliged to provide all their data to every licensor?
Well no I don’t think it would be right but then I don’t know what licensing bodies are doing this, whilst the repertoire that any society, publisher or other body control changes constantly as deals are signed and expire, I’ve not heard of one refusing to say what the license they offer covers. A poor question I think.
8. Or that licensing bodies cannot guarantee that the right artists are being paid once the services hand over payment?
This is the question I have most problems with. Whilst some of the ones above are a little combative or lacking in evidence, the general points being made are fair. This one however is nonsense. Imagine receiving from the various online stores the details of every single of the 1.24 billion tunes sold online in 2013 and trying to find out who wrote it based, more often than not, purely on the track title and the artist. If you’re lucky most of them will match to your database of works but there’ll always be some that don’t (for a dozen different reasons) and on top of that the cost to process that volume of data (the vast majority of which is worth fractions of a fraction of a penny to the artists) is so huge you’ll end up spending more to process it then you received from the licensee in the first place. So the licensing bodies do the best they can and get as much of the money as possible to the right people. It’s not perfect but it’s not a bad attempt.
I’d also like to flip the question and ask most online stores if they guarantee that they pay the labels whose music they are selling? Because as someone owed several hundred pounds from stores due to arbitrary thresholds and criteria I don’t think they do.
9. It surely is not helpful that copyright owners have no obligation to respond to licensing requests at all, or can string out negotiations to literally years, by which time the market has moved on.
Well Tesco’s don’t have to sell us pints of milk but they’ll go out of business pretty quick if they don’t. In the same way the music industry isn’t going to survive without embracing the online world but they don’t have to survive if they don’t want to. So yeah it’s not helpful but you can’t force someone to remain in business if they don’t want to.
10. And it definitely does not help that the need to have a comprehensive set of licences gives a perverse incentive to licensors to be the last to strike a deal.
Not sure I agree on this one either, as we saw last week with YouTube, striking a deal last can actually be a massive handicap.
So there we have it – in general some good points about the archaic nature of the licensing process let down by some errors and a lack of evidence. Maybe she’d have been better off with a Top 5 issues?