Record companies, both majors and indies, are up in arms over suggestions from a British politician that signed artists should see a portion of their UK streaming royalties bypass the label system entirely, and be paid to performers directly via a collection society.
This recommendation appears in a draft Bill titled Copyright (Rights and Remuneration of Musicians, Etc) , which was published today (November 24) by Labour politician Kevin Brennan and will be presented to UK Parliament next Friday (December 3).
Brennan sits on the Digital, Culture, Media and Sport Select Committee (DMCS), the cross-party UK Parliamentary group which, back in January, grilled (on a live video stream) the country’s major label heads during an inquiry into the Economics of Music Streaming.
The findings of that inquiry resulted in an infamously major label-critical report published in July.
One specific recommendation from said report was for artists in the UK to start being paid royalties for streams via a system of ‘Equitable Remuneration’.
The draft ‘Brennan Bill’, published today, seeks to write this model of Equitable Remuneration (ER) into UK law.
Applying ER to streams would align the way artists are paid their streaming royalties with the way royalties are paid to artists from radio play in the UK.
Currently, a portion (50%) of recorded music royalties from radio in the UK is paid directly to performers via a collection society – bypassing artists’ record label deals, and therefore also bypassing any recoupment charges those artists might owe their label/s for previously-paid advances.
The idea of requiring streaming platforms to adopt ER by law has been backed by artists like Sir Paul McCartney, Chris Martin and Stevie Nicks.
Yet the ER system – specifically that ‘portion of royalty payments bypassing record labels’ bit – has been described by the The BPI, the body that represents major record companies in the UK, as “a recipe for disaster” that would “dramatically shrink the total pool of royalties available to labels and artists”.
The draft Bill published by Kevin Brennan MP today proposes that The UK’s Copyright Designs and Patents Act 1988 should be amended to give artists the right to Equitable Remuneration from streaming.
(The intricacies of how this would work in practice are explained well here, including the fact that Brennan’s Bill makes a specific exemption for those artists not signed to a record label-type partner – i.e. DIY acts – who wouldn’t stand to gain should payouts of their streaming royalties suddenly be diverted via a collection society.)
Surprise, surprise: Major and indie record labels really do not like the sound of this Bill, at all.
A spokesperson for the BPI claimed today that should the contents of the Bill be voted into UK law, it would mean “a damaging step backwards” for the British music industry.
“This Bill would bind British music in red tape, reduce income for the most entrepreneurial artists, stifle investment and innovation by record labels, and disproportionately harm the independent sector”.
BPI spokesperson
Said the BPI spokesperson: “This Bill would bind British music in red tape, reduce income for the most entrepreneurial artists, stifle investment and innovation by record labels, and disproportionately harm the independent sector.
“It would create huge uncertainty and deny many of the next generation of artists their shot to build a career. It completely misunderstands today’s music business, and the value that labels provide in finding and nurturing talent.
“Labels are committed to ensuring artists are rewarded in line with their success from streaming, but just as British music is finally climbing out of its long downturn, this misguided, outdated regulation would be a damaging step backwards, eroding the foundations of the UK’s extraordinary global success in music.”
“We think the approach to streaming should be data first, discussion second, and law last.”
Association Of Independent Music
The Association Of Independent Music (AIM) – whose members include the likes of Partisan Records, XL Recordings, Domino Recording Co, Secretly Group, [PIAS], and Beggars Group – is similarly sceptical about Brennan’s bill, and in particular the ER element of it.
Said AIM in a statement: “We think the approach to streaming should be data first, discussion second, and law last – we have expressed our concerns and are open to reviewing and discussing them with all stakeholders to figure out the best way forward. Legislating before this is reckless”.
Brennan himself said: “More and more people are streaming music – heightened by the pandemic – yet, unlike for radio, there is no guaranteed royalty payment for all the musicians who have contributed to the recording being streamed. To redress this, my private member’s bill seeks to allow performers and composers to access means to ensure a fair sharing of revenues generated from their works.
“These reforms would lead to more new music, the revival of recording studios, a boost to the UK session music scene, the unearthing of a new generation of British talent, and Britain becoming once again a world-leading cultural hub for the recorded music industry.”
Kevin Brennan MP
“In particular, the Bill will introduce a right to Equitable Remuneration for performers on musical works, where works that they have performed upon are made available to the public.
“These reforms would lead to more new music, the revival of recording studios, a boost to the UK session music scene, the unearthing of a new generation of British talent, and Britain becoming once again a world-leading cultural hub for the recorded music industry.”
Even if Brennan’s Bill is not actively opposed in Parliament next Friday, it has a long way to go to if it’s to eventually be signed into UK law.
If it’s not halted at the first hurdle next week, the Bill’s recommendations will then be further reviewed by another committee from one wing of the UK Parliament (the House Of Commons) before a final vote from MPs.
Then, if it achieves approval in that vote, it will need to be additionally debated – and approved again – by a different set of British lawmakers, in the House Of Lords.
But make no mistake: there’s a chance this Bill could eventually become law. And record labels don’t like it one little bit.
The Bill, which you can read in full here, also proposes various other changes to copyright law under a section titled “Composers and songwriters: transparency, contract adjustment and right of revocation”.
The ‘right of revocation’ states that an “author may, after a period of 20 years has elapsed following [a] transfer or licence [of their copyright], revoke in whole or in part the transfer or licence of rights”.
In other words, a songwriter would be able to reclaim the rights to their songs which were previously “transferred or exclusively licensed” to a publisher after that 20 year period.
Under Brennan’s ‘contract adjustment amendment’ an author could claim “additional, fair and reasonable remuneration from the person with whom they entered into a contract for the exploitation of their rights… in the event that the remuneration originally agreed is disproportionately low compared to all subsequent revenues derived from the exploitation of the rights”.
In other words, a songwriter or artist could potentially renegotiate the terms of an old agreement with a label or publisher, by law, if the remuneration they originally agreed to is deemed “disproportionately low” compared to industry standards at the time of them wanting to renegotiate.
The publication of the draft text comes a month after a group of 44 British politicians from the ruling Conservative party wrote to Prime Minister Boris Johnson, calling for a legislative change to the way streaming companies pay royalties in the market.
That group of lawmakers also suggested that the 1988 Copyright, Designs and Patents Act should be amended to force the likes of Spotify to pay royalties via a system of ‘equitable remuneration’ (ER) via a royalty collection society.
Within that letter, ‘the behavior’ of streaming companies and major labels in the market was compared to that of the top flight soccer teams that tried to join the doomed European Super League, the formation of which was widely accused of being driven by greed.
In the politicians’ letter, they suggest that “These huge and often foreign-owned multinational corporations have done astronomically well this past year compared to artists”.
In an op/ed for the Times last month, Esther McVey, a Conservative MP who is listed as a supporter of Brennan’s Bill, argues that amending the copyright act to force the adoption of ‘equitable remuneration “will take to put more money in the pockets of British artists”.
Furthermore, she suggests that “given that less money will leave the British music industry to end up in foreign boardrooms, it means we will be generating more tax for public services like the NHS, as well as creating more British jobs in the music industryMusic Business Worldwide