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ERA chief hits out at failing music licensing framework

By | Published on Thursday 26 June 2014

Kim Bayley

The boss of the Entertainment Retailers Association hit out at music licensing processes yesterday, arguing that music rights owners were still trying to apply licensing frameworks from the CD era to the digital domain, which was putting an unnecessary strain on the emerging digital market, and doing a disservice to the artists and songwriters which the copyright system is ultimately designed to benefit.

Speaking at the Music 4.5 IP & Licensing event in London, ERA chief Kim Bayley admitted that in the past her organisation had never been especially vocal on copyright licensing matters, because in the CD era it wasn’t something that concerned retailers. But with ERA now also representing the majority of the digital music services in the UK, including most of the streaming platforms, licensing is an issue for the group’s membership.

Fragmentation of rights between labels and publishers, and on the publishing side between ‘mechanical’ and ‘performance’ rights, the limitations of territory-specific collecting societies in the publishing domain, problems in identifying copyright ownership, the time it takes big rights owners to consider and embrace new business models, and the advance-and-equity demands made on start-ups were all cited as issues for the digital sector. A sector without which, Bayley argued, the music rights industry at large would not be seeing its slow return to growth.

While stressing that her members were passionate supporters of intellectual property – as owners of their own copyrights, trademarks and patents, not to mention operators of services which rely on copyright material, and which need piracy to be constrained as much as the labels and publishers – Bayley said that ERA could not agree with the view often expressed by the music rights owners that the copyright system is working in the digital age.

In her speech, published in full on the ERA site, Bayley presented her top ten frustrations:

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?

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?

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?

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?

5. Why is there an apparently arbitrary allocation of the publishing rights between performance and mechanicals in different territories?

6. Is it right that a digital store in one territory is prevented from selling to consumers in another territory?

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?

8. Or that licensing bodies cannot guarantee that the right artists are being paid once the services hand over payment?

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.

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.

Of course bosses at labels and publishers have, for several years now, internally conceded that the music licensing system needs an overhaul, particularly at the lower end of the market, and the limitations of collective licensing – traditionally single territory-based – in a world where all digital services aspire to be global has been regularly discussed too. But Bayley argues that too little is being done to actually tackle these issues, to the detriment of all.

She told the Music 4.5 audience: “Let me be clear once again, this is not an attack on copyright. It is an attack on inefficiencies which work to the detriment of the creators it is meant to protect and the consumers who wish to pay for their music. Copyright law must change and adapt. And coupled with changing copyright law, licensing needs to be simplified and inefficiencies removed”.

She concluded: “We are friends of the music industry. We want the music industry to prosper. But ERA’s members believe that too often the industry holds on to practices, to ways of working, to organisations which are no longer appropriate for the digital age. We believe change is need for the benefit of consumers, of the digital services doing so much to invest in the future of music – and ultimately for the artists and songwriters who create the music we all love”.