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Submission to Hargreaves Review – Complete Text

This is the complete text of the FAC and MMF’s joint submission to the UK Government’s Hargreaves Review of Intellectual Property and Growth (March 2011).

Executive Summary

The Featured Artists Coalition (FAC) was formed in 2009 to represent the voice of artists in every aspect of their career. Featured artists are those artists who are contracted to phonogram producers and publishers or who run their own record label, and whose name appears on recordings released to the public. A featured artist is always a musical performer but in many cases they are also musical authors.

The Music Managers Forum (MMF) represents managers of featured artists. Managers are the primary representatives of artists and earn their money by commissioning income that the featured artist actually receives. After the initial artist-management agreement has been signed the managers and the featured artists interests are therefore mutual.

1.The music industry’s two main components are the artists who create the music and the music fans who want to listen to it and interact with it. In the future those two fundamental components need to be consulted and placed at the centre of any future structures.

2. Compensation for featured artists and investors (particularly record companies) is shrinking. We wish to find new mechanisms that reverse that trend and grow the music industry for the benefit of all stakeholders including authors, performers, publishers, consumers and record companies.

3. We want to monetise unauthorised consumer activity. We believe that the vast majority of music fans are not pirates but are in fact our customers. With the right structures in place the illegal file-sharing sites would become redundant and the legal market would grow.

4. Licensing should be faster, easier, simpler. We want a system whereby users can license digital music easily, preferably at set rates for a set use from a collective management organisation such as PRS and/or PPL.

5. We believe that digital music start-ups should be able to enter the market with a licence that delivers certainty and relatively low cost of music rights provided the start-up can show that they are a bona-fide business and that, if successful, their model can continue. Growth will follow.

6. We believe that it should be possible for a consumer music license to be included in a broadband/telcom package so that the subscriber has access to all music legally provided they keep paying their subscription. This is already working very well with TDC who are the biggest telcom/broadband and mobile provider in Denmark.

7. We believe that authors and performers should have oversight of agreements between investors (including collective management organisations) and digital services even if the agreement is governed by a Non Disclosure Agreement (NDA). If authors and performers are being paid based on these agreements they or their representatives, should have knowledge of the main deal points to ensure that they are being paid correctly. This particularly applies to auditing which must include the right to audit overseas accounting and agreements. We believe that any rights holder operating under an NDA should have a genuine fiduciary duty towards the creators whose rights they represent avoiding all conflicts of interest.

8. We believe that in the digital era collective management is the ultimate answer. We believe that in the long term collective management would benefit from being divided with one organisation collecting accurate data and creating an open Global Repertoire Database in the public domain, and collective management organisations using that database to collect and distribute income to their members. This would be far more efficient ensuring that stakeholders are paid correctly and at the same time would create competition between CMOs as demanded by the European Commission. There should be no competition on rates, just service.

9. We believe that a system of extended collective licensing should be introduced in the UK as it is in Scandinavian countries. This would give legal certainty to users for orphan works where one or more of the copyright owners cannot be traced.

10. We want to see changes in UK contract law that provide a more equal and fair negotiation basis for all contracts concerning authors and performers.

11. We believe that moral rights – the right of attribution (which means that the musical author or the musical performer has the right to be named as the author or performer), and the right of integrity (which means that no one can mess with your work without your permission) – should be enforceable by the creator as they are in France, but on a take-down basis. In other words once a composition or a recording is released into the system it can be licensed on all digital services with a switch would always be turned to ‘on’ and it would be up to the artist or the copyright owner to switch it to ‘off’. We would like moral rights to be unwaivable in contract like the performer’s public performance right administered by PPL.

12. We believe that any transfer of copyright should be limited to 25 or 35 years as it is in the USA. This means that the copyright in a recording or a composition should come back to the creator at least once in their lifetime.

13. We believe that all transfer of copyright should only be by license and that assignment should be prohibited. That way ownership of the copyright always remains with the creator. This is already the law for musical authors in Germany and is actively being proposed in The Netherlands.

14. We believe there should be new regulations regarding ‘use it or lose it’. If a copyright holder does not make a recording available to the public in either physical and digital form for a period of one year the artist featured on the recording should be entitled to exploit the non- available recording themselves.

15. We do not believe that the UK should have any further exceptions to copyright but we believe in global harmonisation of copyright law including limitations and exceptions. The internet is a global phenomenon and we need global copyright regulations to ensure that everyone gets paid correctly and to give users legal certainty.

16. We do not believe that the US ‘Fair Use’ system would be an improvement on the UK’s ‘Fair dealing’ system. That said the UK’s fair dealing provisions in the 1988 CDPA need updating to prevent abuse.

The FAC runs a weekly news digest of music industry information of interest to featured artists. To stay up to date with news, issues and opinions relevant to featured artists, subscribe to the digest.