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Transparency amendment proposed for Digital Economy Bill

By | Published on Friday 27 January 2017

Houses Of Parliament

The previously reported Digital Economy Bill – last seen in these parts being amended in a bid to ban ticket touting bots – has now moved over to the House Of Lords, where Liberal Democrat peer Tim Clement-Jones has proposed a new amendment seeking to help artists get more transparency about the way their music is being exploited by digital platforms, via the labels or publishers which control the rights in their work.

The lack of transparency in the way streaming services are licensed by the music industry, and in particular the lack of information available to artists and songwriters about the deals done between digital platforms and the record labels, music publishers and collecting societies, has been a big talking point in the music community for some time.

It was also a key issue raised by artist managers during the roundtables that informed part two of the Music Managers Forum’s ‘Dissecting The Digital Dollar’ report, which was produced by CMU Insights.

The draft European Copyright Directive published last year also includes some provisions to force corporate music rights owners to provide more information to songwriters and artists about the digital income generated by their songs and recordings. Though many artist managers feel that as it is currently worded the proposed European legislation leaves too many get-outs and exceptions for those new transparency rules to be truly effective.

Seeking to put the issue on the agenda in Westminster too, Clement-Jones proposes a new section to the Digital Economy Bill that says: “Authors, artists and performers shall receive on a regular basis timely, adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights as well as subsequent transferees or licensees, [including] information on modes of exploitation, revenues generated and remuneration due”.

Adding that this new measure might require artists/songwriters and labels/publishers to agree a code of practice on transparency, the proposed amendment goes on: “Any such code of practice is to provide that each creator is to be entitled to a statement of income generated under such licence or transfer arrangements at regular intervals during each annual accounting period, and provide an explanation as to how the creator’s remuneration has been calculated referencing any contract terms relevant to the calculation”.

Of course, most labels and publishers will already be providing some of this information as routine to artists and songwriters on their rosters, but the management community feels that when it comes to streaming income key information about a label or publisher’s specific deal and relationship with each digital platform is unavailable to them.

This makes it hard for managers to audit whether the royalties their clients receive are correct, and to assess which streaming services are offering the best deals, and should therefore be more proactively supported by their acts.

The amendment, which is among many proposed by different Lords due to be discussed in the House from next week, has been welcomed by the Music Managers Forum. The trade body’s CEO Annabella Coldrick told CMU: “The recorded music business is fast evolving from a sales-based to a licensing-based model. This is an exciting and tectonic shift – as an entire market adapts to the complexities of streaming, of micropayments, and of NDAs”.

She goes on: “It is a difficult moment. But it also provides the opportunity to cast aside outdated accounting practices and to build trust and confidence amongst fans that when they subscribe to a streaming service those who create the music will share in its success. We are pleased to see this amendment from Lord Clement-Jones and hope that it may lead to action to address the transparency issue”.