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Music industry consensus collapses as copyright directive talks near completion

By Chris Cooke | Published on Friday 8 February 2019

Many in the music community welcomed the news this week that a dispute in the EU Council over article thirteen of the copyright directive has seemingly been overcome, allowing wider discussions about getting a final draft of the copyright reforms agreed to continue. However, some significant players in the music industry are now calling for the entire directive to be abandoned. So that’s fun, isn’t it?

In development for years now, the latest European Copyright Directive is in its very final stage, of course, when the European Commission, EU Council and European Parliament must agree a final single version. This is called the trilogue phase.

The music-industry-supported article thirteen, which seeks to reform the copyright safe harbour and increase the liabilities of user-upload platforms like YouTube, has continued to be one of the most controversial elements of whole endeavour. Within EU Council there were disagreements over whether nor not smaller user-upload platforms should be excluded from the new liabilities, which caused trilogue talks to stall.

However, those disagreements have seemingly been addressed, and the EU Council could now agree its preferred directive text later today, allowing it to sit back down with the Commission and Parliament next week. With that in mind, GESAC, which speaks for the song right collecting societies of Europe, said this morning: “It is now time to adopt a mandate [within the Council] and an agreement on the directive in trilogue early next week to send the right message to European citizens: the EU delivers for its people and its values!”.

Yesterday though, trade bodies for the major and indie record labels and music publishers put out an open letter to EU policy makers saying something very different. Criticising how the most recent discussions within EU Council had amended the proposed copyright reforms, they stated: “We would rather have no directive at all than a bad directive. We therefore call on negotiators to not proceed on the basis of the latest proposals from the Council”.

The wider music industry has been unusually united over the last few years in its call for safe harbour reform and a strong unambiguous final version of article thirteen. As YouTube ramped up its lobbying efforts against the directive last year, trade groups for labels, publishers, collecting societies, artists, songwriters and managers all pro-actively supported various campaigns to push back against the tech lobby and keep article thirteen on track.

The music industry has also sought to win the support of other copyright industries for article thirteen, because copyright reform is often more achievable when organisations representing the movie industry, the TV business, newspaper and book publishers, and the sports sector are also on board. Although safe harbour reform wasn’t a priority for all those other copyright industries from the off, most have, at various points, spoken out in favour of it.

That said, late last year, as last minute lobbying from YouTube and the tech sector took safe harbour reform off in new directions, some of the other copyright owners started to express concerns that the final draft of article thirteen could actually leave them worse off than they are now. Some even started to suggest that article thirteen should be deleted or at least tweaked so that it only applied to music.

Still, the music community itself seemed to remain united. Until yesterday. Now record industry trade groups IFPI and IMPALA, and music publishers organisation ICMP, reckon the directive should be abandoned. Meanwhile, as noted, GESAC, speaking up for collecting societies and their songwriter members, want law-makers to plough ahead.

This morning UK organisations for artists, songwriters and managers also urged EU decision makers to continue working on the directive. The Council Of Music Makers – that brings together BASCA, FAC, MMF, MPG and the MU – called on negotiators “to proceed with the copyright directive”, adding that “we speak with one voice with all the creator-led organisations across Europe and around the world in supporting the copyright directive”.

So why is the united front collapsing? It’s important to remember that, while article thirteen has got all the press, there are other elements of the copyright directive relevant to music. Articles fourteen through sixteen seek to provide artists and songwriters with more transparency, a contract adjustment mechanism and a dispute resolution system.

Meanwhile, additional elements were added by the Parliament last year that further aim to benefit artists and songwriters. One extra element talks about ensuring “fair and proportionate remuneration” for artists and writers whenever their works are exploited. Another suggested some kind of reversion right where artists and writers have assigned their works to a third party which then doesn’t properly exploit them or report on that exploitation.

Article thirteen unites the music community and seeks to strengthen their combined rights against tech giants. However, articles fourteen to sixteen mainly seek to strengthen the combined rights of artists and songwriters against their corporate partners. Or, as you might call them, record companies and music publishers.

So for the corporate side of the music industry there have been two objectives throughout all the directive shenanigans. First, that article thirteen is sufficiently strongly worded to increase the music industry’s negotiating power against YouTube et al (and that it doesn’t somehow actually make things worse). Secondly, that the labels and publishers manage to sufficiently increase YouTube’s liabilities with article thirteen, without too greatly increasing their own liabilities via articles fourteen, fifteen and sixteen.

IFPI, IMPALA and ICMP have not gone into the specifics as to why they would now rather that the copyright directive be abandoned. But it is almost certainly because – with the proposals likely to be passed by the EU Council today and then pushed during any trilogue talks next week – those two objectives can no longer both be achieved.

For their part, the CMM said this morning: “It is sad to see labels and publishers turn on their creators and artists in this way. They are trying to halt the directive not only because of the latest wording of article thirteen but because they want to avoid the improvements to transparency and fairness that articles fourteen to sixteen bring. We are saddened that the short-term commercial interests of these companies can be put before modernisation of copyright legislation that will benefit the whole industry”.

The collecting societies allied to GESAC have both songwriters and publishers as members, though the societies themselves will be less affected by the other articles in the directive. Not least because the one that could have been relevant to them – the transparency-focused article fourteen – specifically does not apply to collecting societies, on the basis that they are already subject to transparency obligations stemming from the EU’s 2014 Collective Rights Management Directive.

It remains to be seen how law-makers in the EU now respond to the conflicting demands of different strands of the music industry. But the music community’s united front that has been a key feature of the directive negotiations is seemingly at an end. Which will be music to the ears of YouTube. And that’ll be user-uploaded music protected by safe harbour, obviously.

Here is the open letter signed by IFPI, IMPALA, ICMP and various trade groups representing media and sports companies…

We are writing as a group of rightsholders representing the music, audio-visual, broadcasting and sports industries, regarding the direction of travel for the directive on copyright in the digital single market.

The key aims of the original draft directive were to create a level playing field in the online digital single market and strengthen the ability of European rightsholders to create and invest in new and diverse content across Europe.

Despite our constant commitment in the last two years to finding a viable solution, and having proposed many positive alternatives, the text – as currently drafted and on the table – no longer meets these objectives, not only in respect of any one article, but as a whole. As rightsholders we are not able to support it or the impact it will have on the European creative sector.

We appreciate the efforts made by several parties to attempt to achieve a good compromise in the long negotiations of recent months. Nevertheless, the outcome of these negotiations in several of the Council discussions has been to produce a text which contains elements which fundamentally go against copyright principles enshrined in EU and international copyright law.

Far from levelling the playing field, the proposed approach would cause serious harm by not only failing to meet its objectives, but actually risking leaving European producers, distributors and creators worse off.

Regrettably, under these conditions we would rather have no directive at all than a bad directive. We therefore call on negotiators to not proceed on the basis of the latest proposals from the Council.

And here is the open letter from GESAC…

As the negotiations on the copyright directive enter their final and very critical stage, GESAC, which represents more than one million creators from all sectors through its 32 members from across the EU and EEA, would like to express its strong support for this directive which is essential for the future of creators.

The directive as a whole – and in particular the provisions in article thirteen – creates the long sought after level playing field for creative content in the online market.

It also addresses the major unfairness caused by the enormous ‘transfer of value’ that favours free-riding tech giants, while it also incentivises European creation, innovation, and investment. The current text is a compromise that goes into the right direction, although further improvements still need to be achieved. You will find enclosed GESAC’s priorities and suggestions on the text in this respect.

Without this directive, creators will be entirely deprived of any means to get a fair remuneration in the online environment: the market will be entirely driven by the commercial interests of free-riding tech giants. This would be a fundamental failure for European policy-making and the functioning of our democracy, as it can only be interpreted as an endorsement of the unfair and manipulative practices of tech giants that refuse any rules or oversight.

It is now time to adopt a mandate at [the EU Council meeting] on February 8th and an agreement on the directive in trilogue early next week to send the right message to European citizens: the EU delivers for its people and its values!

We trust your thorough political judgment and sense of fairness will prevail to finalise the last step of this process and remain at your disposal for any complementary clarifications.

And here is the open letter from CMM…

The UK Council Of Music Makers – comprising BASCA, FAC, MMF, MPG and the MU – call on negotiators to proceed with the copyright directive.

We are the voice of UK songwriters, music producers, performing artists, musicians and music managers. We speak on behalf of thousands of makers of the music this ‘industry’ represents. We speak with one voice with all the creator-led organisations across Europe and around the world in supporting the copyright directive.

While the current text could be improved and still includes some problematic provisions, it is a compromise. At every step of this process the creative community has sought compromise and been open to dialogue.

Most creators and artists in the UK struggle to make a living from music. Without this directive, creators will be entirely deprived of any means to get a fair remuneration in the online environment: the market will be entirely driven by the commercial interests of free-riding tech giants. This would be a fundamental failure for European policy-making and the functioning of our democracy, as it can only be interpreted as an endorsement of the unfair and manipulative practices of some tech giants that refuse any responsibility.

We make the music that people want to listen to and buy. It is our intellectual property and our rights and we need the copyright directive to put in place reasonable and fair safeguards.

It is hugely disappointing to see the music labels and publishers disregard the interests of their creators and artists in this way. They are trying to overturn years of collaborative work at the eleventh hour by killing the copyright directive. Like YouTube, they have lobbied negotiators hard without consulting or informing the creative community. Heavy-handed tactics of heavyweight businesses.

It is sad to see labels and publishers turn on their creators and artists in this way. They are trying to halt the directive not only because of the latest wording of article thirteen but because they want to avoid the improvements to transparency and fairness that articles fourteen to sixteen bring. We are saddened that the short-term commercial interests of these companies can be put before modernisation of copyright legislation that will benefit the whole industry.

The labels and publishers have shown an unsettling disrespect for the talent that they have the privilege of representing, raising serious questions about their suitability to be the custodians of copyright. We have worked in tandem with UK Music and colleagues across the industry to find compromise and solutions that enable legislation to pass. This directive will affect future generations of creators and performers whose interests need protecting beyond the interests of current models.

We have been engaged and willing to negotiate, and we remain engaged and progressing in good faith, with both tech and industry. We have not given up on this important legislation.

We call on UK government and UK Music to support the adoption of the copyright directive.