Senior Policy Advocate
Last Thursday Consumer Focus, along with the Norwegian consumer council and the French consumer association, joined artists and small collecting societies in the European Parliament to discuss how copyright licensing on a collective basis can benefit artists. At the ‘Towards the reform of collective rights management: Time for a fair remuneration of artists‘ conference, organised by the Greens/European Free Alliance, panellists discussed how the forthcoming Directive on collective rights management could ensure fairer pay for artists whose works are licensed to radio stations, pubs, online services and the like.
In my presentation I quoted our recent research which found that 77 per cent of British consumers expect that a fair share of the money they pay for music, films and e-books goes to the artists who created the work. Consumers do not obtain licences from collecting societies, which provide blanket licences on behalf of thousands of artists. Instead businesses and educational institutions need to obtain such licences on behalf of consumers. Because collecting societies enable the cost-effective mass use of copyright protected content they are important to consumers, but the performance of collecting societies has been very mixed across Europe.
Thomas Nortvedt from the Norwegian Consumer Council highlighted how targeted regulation ensures Norwegian collecting societies operate transparently and manage rights effectively on a collective basis. But warned that there has not been a lot of good news about collective rights management and that trust in collective rights management is declining.
Kelvin Smits from Younison, a pressure group of artists from across Europe, recounted the recent scandals that have rocked collective rights management across Europe: in February this year SABAM, the Belgian music collecting society, was charged with falsifying accounts and fraud; and in July last year police raided the Spanish music collecting society SGAE to arrest and charged eight employees for embezzling millions. Edouard Barreiro from the French consumer group UFC Que Choisir pointed out persistent problems with French collecting societies, which like their Belgian and Spanish counterparts are subject to regulation. Both Kelvin and Edouard forcefully rejected the argument by a French collecting society in response to their criticism that ‘corruption happens everywhere’.
I highlighted the fact the relationship between artists and collecting societies is governed by contract, but that these contracts are exempt from the Unfair Contract Terms Act 1977 in the UK. Apparently artists face similar barriers in other European countries.
Common ground on copyright
Contracts and the effectiveness of collective rights management, and other alternatives such as the proposed Digital Copyright Exchange, were discussed at the February event we organised with the Creators Rights Alliance to discuss ‘Consumers’ and creators’ common ground on copyright’. According to the British Writers Guild, which attended both our event and last weeks’ event in the European Parliament, collecting societies withhold significant sums from writers in commissions, membership charges, and cultural and social levies. When money passes through several collecting societies to compensate writers for the use of their work in other European countries such charges can approach 50 per cent of the writer’s payment. Similar problems with the cross-border licensing of music were highlighted by musicians at the common ground event.
UK artists more than other European artists loose out from ineffective cross-border licensing as their works enjoy sizable audiences beyond UK borders. The UK is currently one of only three EU member states which does not regulate collecting societies at all. Following sustained complaints the Government has accepted the recommendation of the Hargreaves’ Review to ensure that all collecting societies adhere to minimum standards. The Intellectual Property Office (IPO) has just consulted on a range of minimum standards for the treatment of licensees and members of collecting societies, as well as governance and accounting. As highlighted in my presentation, regulation across Europe has thus far focused on the relationship between collecting societies and the businesses which need to obtain licences. It is therefore welcome that the IPO intends to ensure UK artists enjoy rights vis-a-vis collecting societies, ensuring artists get a fair share of the money consumers ultimately pay for copyright protected content.
Trust in collective rights management
The main aim of the European Directive will be to facilitate the effective cross-border licensing of copyright protected works in Europe, moves which could bring significant financial benefits for UK artists. A list of standards on reciprocal agreements between collecting societies that we believe the directive should incorporate can be found in our submission to the European Commission. However, I also highlighted in my presentation that the experience in other European countries suggests that more regulation is not necessary better regulation. The UK’s move towards establishing targeted minimum standards on governance and accounting, along with rights for artists, would ensure trust in collective rights management. This in turn would support new business models and deliver significant benefits to consumers, the digital economy and artists.