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Kevin Brennan MP’s controversial music copyright proposals discussed in Parliament

By | Published on Friday 3 December 2021

Big Ben

Kevin Brennan MP’s copyright reforming private member’s bill was debated in Parliament today. The result: a long line of MPs delivering their personal and entirely pointless musical memories; a smattering of misleading or just incorrect stats and statements about music streaming; plus some decent discussion about the various issues that exist in the recorded music business of today, and how they might be addressed.

As Brennan pointed out in his speech to the House Of Commons this morning, his bill is very much based on recommendations made by Parliament’s culture select committee after its inquiry into the economics of streaming. Specifically, it principally seeks to alter the artist/label relationship through a number of copyright law reforms, with the aim of increasing the cut of streaming income paid through to at least some artists.

That is based on the argument that the streaming boom has benefited labels the most, because artists signed to conventional record deals usually get a minority cut of any income generated by their recordings. Quite what cut the artists get is entirely dictated by the specifics of each record deal, though those artists who signed record contracts pre-digital are likely seeing the smallest cut if the label is applying old school CD royalty rates to streaming income.

Seeking to back up the argument that artists and songwriters are being unfairly treated in the streaming economy, Brennan honed in on two recent music business news stories: the mega-bonus being paid to Universal Music boss Lucian Grainge, and the ongoing legal dispute between Four Tet and Domino.

The former relates to the recent observation that – because Grainge is getting a £123 million bonus following the successful listing of Universal Music on the Dutch stock exchange – his total pay packet this year should top £150 million. Which – according to a recent research report by the Intellectual Property Office – is the same as the total amount of monies paid to all songwriters from the streaming, downloading and physical sales of their songs within the UK in 2019.

The latter is a legal dispute that has been rumbling on all year, with Four Tet arguing that under his 2001 record deal with Domino he should be receiving a 50% royalty on some or all of his streaming income, when he is actually receiving 18%. That dispute become extra newsworthy just before Brennan’s bill was published because, as part of the legal battle, Domino removed three Four Tet albums from the streaming services.

The label insists that it was advised to so by its lawyers – and that it only removed the albums very reluctantly – but that development has been very much spun as “fight your label on allegedly unfair contract terms, and they’ll punish you by taking your music offline”. A narrative which means it was entirely unsurprising that Brennan would reference the dispute in favour of his copyright reforms.

In terms of his proposals, Brennan’s bill would give artists the legal right to renegotiate old record deals after a period of time, in a bid to alter contract terms that seem unfair in the context of any changes in music consumption trends that have occurred since the original deal was done. In addition to that, after 20 years artists could revoke any rights or approvals that they had previously granted to a label through an old deal.

Plus, it would also introduce an equitable remuneration right for any artists who do not own the copyright in their recordings, meaning that those artists would receive at least a cut of streaming income generated by their music directly through the collective licensing system, oblivious of any terms in an old record contract.

Having run through his proposals, Brennan also sought to respond to criticisms that have been made about the bill from within the music industry, and in particular from record labels, both majors and indies. That includes the argument that the reforms would negatively impact on the ability of labels – and especially indies – to invest in new talent, that it could negatively impact on self-releasing artists, and that all the proposals need more consideration.

On the latter point, Brennan hit out at the majors, accusing them of not supplying data on their royalty distributions as part of the research that led to the aforementioned IPO report on creators’ earnings. If the labels want – as they have suggested in response to his bill – “evidence based reform”, he declared, the labels “need to give us the evidence”.

As for the potential negative impact on independent labels and independent artists, Brennan said that his bill doesn’t actually dictate how ER on streaming would work in practice. And therefore the concerns of those indie labels and artists could be considered when any new remuneration system was implemented, with the aim of addressing those concerns before ER actually went into effect.

Moreover, he added, if his bill was to proceed, it would need to be scrutinised by a committee within Parliament, which could consider in more detail the potential impact of ER – and his other proposed reforms – and benefit from research the IPO has already commissioned on ER, contract adjustment and reversion rights.

Concluding, he accused critics of his proposals within the music community of unnecessary “hyperbole and panic” – of incorrectly claiming that his copyright reforms would result in “anarchy in the UK music industry”. On the contrary, he said, it would result in “equity in the UK music industry”.

First to respond to Brennan’s bill was John Whittingdale, a former culture minister and ex-chair of Parliament’s culture select committee.

He conceded that the bill raises some important issues, but insisted that the role of labels in discovering and supporting new talent must not be ignored, and expressed concern about the impact Brennan’s copyright reforms would have on labels seeking to perform that role.

And, he noted, that recent IPO report actually showed that the total share of recorded music income going to artists overall has actually increased in the digital age, so it’s wrong to suggest only labels are winning as a result of the streaming boom.

Whittingdale was even willing to defend Grainge’s big pay day. He said he was “delighted” that a British music industry executive was leading the biggest music rights company in the world, and that he was being rewarded for his success in growing that business.

Beyond defending Grainge’s pay packet, he then expressed wider concern about any new laws that could enable old contracts to be rewritten or even torn up. Aside from that seeming to be in conflict with the ethos of Conservative politics, he argued it would result in too much uncertainty, and therefore negatively impact on the ability of labels to invest.

Moreover, he went on, those reforms – and the ER proposals – all ignore the huge diversity in the deals that are being done today between artists and labels. And would therefore take away the flexibility those artists and labels need to develop deals that are appropriate, depending on each parties’ ambitions and priorities, and the next round of changes that occur in music consumption.

That said, Whittingdale added – while labels are not, as they are sometimes portrayed, “the villains of the piece” – more could be done by the corporates of the music industry to address the issues that Brennan’s bill raises. However, he argued, the government’s current work in that domain is the better approach.

Since the publication of the culture select committee’s report, the government’s culture department and the IPO have brought together a music industry contact group, commissioned research into copyright reform, and are in the process of recruiting two working groups to put the spotlight on contact transparency and music rights data.

Meanwhile, the UK’s Competition & Markets Authority has announced a market study into the music rights industry, which seems likely to consider the dominance of the majors in both recordings and songs.

That is the right response, Whittingdale argued, and with that work underway it would be premature to start legislating in the way Brennan’s bill proposes. Because those proposals, Whittingdale concluded, could actually hinder the development of the future stars of UK music.

Speaking for the government was George Freeman MP, the minister with responsibly for intellectual property. He reaffirmed the government’s position that – while the problems raised by the culture select committee and Brennan need addressing – the proposals in this bill need more consideration.

In particular, he focused on concerns expressed by indie labels – both via the Association Of Independent Music and directly – about the potential impact the bill would have on their ability to sign and support new talent.

That said, addressing the music industry, Freeman was clear that the government believes there is a problem within the music business that needs addressing, and that it expects stakeholders within the industry to continue to work with ministers and officials to meet that challenge. And, he added, while the government would prefer voluntary industry-led changes, ministers could as yet come out in support of reforms to copyright law.

However, he insisted, those voluntary changes should be sought first, while government also investigates in more detail the tangible impact of Brennan’s proposals, and any other possible legislative reforms. But, he added, the government was keen to ensure that work was completed quickly, with proposed solutions in place by no later than next September.

Despite Brennan attempting at one point to end the debate and get a vote on whether his proposals could actually proceed to the next stage, that didn’t happen and – in the end – the allotted time for discussion was used up. Which means the proposals are still live within Parliament, but need additional debate to proceed to the next stage, which is unlikely to now happen.

However, the debate did get the government commitment to force the industry to make voluntary changes under the threat of future legislation, which the Brennan bill’s supporters will see as a win.