Term extension plans stumble and fall – and then rise from the ashes as the European Parliament comes to the rescue

May 2009

Record labels, artists

The British music industry’s attempts to extend the recording copyright from the current 50 years, possibly to as much as 95 years, were dealt a blow at the end of March after the UK pushed for greater clarity in the workings of a ‘session fund’ to ensure musicians (rather than just record labels) benefit form the term extension need to be debated. EU Minister Charlie McCreevy, who put the original extension proposals forward at a European level, included provisions to ensure that musicians benefited from the extension, mainly by increasing the royalties that are automatically paid to artists and session musicians oblivious of contractual arrangements once the initial fifty year term is up (currently in the UK, the only royalties musicians have an automatic right to is a share of broadcast royalties collected by PPL). McCreevy proposed a ‘session fund’ into which a cut of fifty-year plus royalty revenues are paid, which are then distributed to musicians involved in those recordings. The UK’s IP Minister David Lammy has made it clear that it is the musicians who he cares about and the UK Government is adamant that the fund system must be properly set up. A stumbling block at the EU Committee Of Permanent Representatives (COREPER) who need to agree on the proposals before they can go to the decision-making Council Of Ministers, centred on the Session Fund and according to Music Week one outstanding issue is whether the session fund will only apply to existing recordings, or all future recordings too. Equally the UK want the session fund to be permanent but a number of other European countries want the fund to be “transitional” and therefore to only apply to existing recordings. Disagreements on that particular issue meant no agreement was reached in COREPER, which means the proposals cannot now proceed, as originally planned, to the Council Of Ministers. The UK’s Innovation Minister John Denham, stressed that the delay hadn’t “killed off the proposals to extend copyright term”, and added that the issue just needed more Europe-wide consideration and debate. He told reporters: “Member States need more time to consider the details of the proposal and reach an agreement. The vote against the proposal today will not end the process. I’ve always been clear that the UK would support an extension to copyright term to deliver real, lasting benefits to performers. We are nearly there. I am personally disappointed that we could not get agreement to go straight to a deal with the [European] Parliament but I remain confident that we can get there. The UK will do all it can”. The BPI, PPL, AIM and the Musicians Union all expressed dismay at the delay but the newly formed Featured Artists Coalition supported the UK government’s stance saying “Under the proposals voted down on Friday, record companies would simply gain another 45 years of ownership, entrenching the terms of record contracts signed in an analogue age. Historically, record companies took an average of 85% of the price of a sound recording because they had to manufacture and distribute physical product. Although the internet has made this no longer necessary, deals are still being signed under the old model and artists are being offered royalty rates of 15% of the price of a digital download. While this might sound a lot, the reality is that through a range of discounts and deductions this 15% is dramatically reduced to only a few pence at best” adding “Owning our rights would enable artists to negotiate new deals with record labels and other users of music that would reflect the true costs of digital distribution. We would also be able to decide when our music can be used for free and when we should expect remuneration. Furthermore, the amount of catalogue that major rights holders have digitised is shocking, with one major record label admitting that only 30% of what is in their vaults has been digitised. If this is the case for other major rights holders then returning rights to artists would allow the remaining 70% of catalogues to be brought out into the daylight, providing consumers with greater access to a wider range of music”. The Czech EU presidency is now working on a proposal for a second reading but it should be noted that the detail of the session fund was not the only hindrance to the copyright extension proposals last week (although alone may be fatal); several other EU nations – enough to be considered a “blocking minority” – confirmed they would vote against the proposal altogether. These included: Sweden, Denmark, Italy, Belgium, Malta, Netherlands, Finland, Austria, Slovakia, Slovenia and Romania.  In the week following the COREPER stalemate the UK licensing body PPL organized a reception in Brussels to help artists press their case for a fair copyright term deal at the EU level attended by MEPs, the Czech EU Presidency, the European Commission, permanent representatives, council members and musicians who attended included Pat Halling, violinist on hundreds of recordings including the Beatles’ “All You Need Is Love,” conductor Luis Cobos and Tom McGuinness from 60s recording stars Manfred Mann who thanked the Commission, which drafted the original proposal, and the Parliament, which approved the proposal at its legal committee meeting in February. Dominc McGonigal, PPL’s director of government relations said “We are grateful to the European Commission and the European Parliament which have responded to the request from musicians for a fair copyright term adding “We now ask that the Council approves these proposals and so puts an end to second class status for performers in Europe. Musicians do not want to hear that this legislation has failed because of political wranglings over inconsequential technicalities.” (emphasis added). But Billy Bragg, writing in Music Week on behalf of the Featured Artists Coalition, took quite a different approach pointing out that artists wanted a much fairer system than existed in the past and a meaningful share of royalties saying “The Featured Artists Coalition has been founded to give artists a voice in the important decisions that are being made about the ownership and exploitation of copyright within our industry. With regard to the issue of term extension currently being addressed by the European Union, we believe that after 50 years of ownership by the record companies, the recordings that we made – and ultimately paid for [because the label’s cash investment is recouped from the artist’s sales] – should become our property. We want the slate to be wiped clean for those who didn’t recoup and we want our fellow performers, the session musicians, to start getting some royalties too”adding “The industry is pushing the line that if the legislation fails to pass on its first reading this week, then that will be that, everything will be lost and there will be no extension at all. This kind of scare-mongering doesn’t wash, neither with artists nor with government officials. This issue will have to be resolved sooner or later because there cannot, in a digital age, be such a huge anomaly in the term of copyright in recordings between the USA and the EU”.  Secretary of State for Culture Andy Burnham and Intellectual Property minister David Lammy have now spoken with representatives from the BPI, AIM, MMF and the Featured Artists Coalition.

The ever sage IPKat adds this: The controversial decision for a Directive to extend to 95 years the copyright term in certain works in Europe is a matter of great interest to the IPKat, who has heard from a reliable source that  (i) The plenary (first reading) vote in the European Parliament, scheduled for 23 March, was postponed and no new date has been fixed: it may still be the week beginning 21 April, or in the last plenary session in May, or not at all; (ii) In the Council of Ministers, a blocking minority of countries led by the Scandinavians prevented agreement on a compromise text (70 years) proposed by the Czech presidency (Committee of permanent representatives (COREPER), March 27).  As things stand, there appears to be no ‘qualifying majority’ of EU countries in favour of term extension even if the UK is counted as a “For”; (iii) Sweden has been tasked with finding a position that can be agreed during the next presidency; (iv) behind the scenes, enormous pressure is being exercised by the Commission to ‘turn’ some of the blocking countries. The IPKat hears that “the copyright unit of the Commission will not come out of this unscathed”.

And then suddenly at the end of the month (April 24th) came the news that MEPs in the European Parliament had voted through a term extension for sound recordings to 70 years.  MEPs rejected a Green Party motion that in the extended copyright period ownership should automatically revert to the artist (a motion obviously supported by Billy Bragg and the Featured Artist Coalition), but did pass provisions to ensue artists and musicians get a higher automatic royalty from new fifty year plus revenues and added provisions to ensure labels can’t use past contracts to invalidate those provisions. The European Parliament also passed a ‘use it or lose it’ provision, whereby artists whose 50 year old recordings are owned by a label who are not currently making them legitimately available for sale can make a claim to regain ownership of the recordings –  artists can request that a record contract more than 50 years old be terminated as a result of a label’s failure to make their recordings available although the  label then has a year to make the recordings available, otherwise the contract will be terminated. However, despite the 70 term passing through the European Parliament, it still needs to get through the European Council although a 70 year term (rather than for 95 years) may provide an acceptable compromise for those countries who have so far opposed any extension though

www.thecmuwebsite.com   30 March 2009

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