Newsletter Editorial #123 - Truth & Reconciliation: Recalibrating Creators' Share From Digital

16 Dec 2015

Credits: FirmBee@pixabay

It was never going to be a straightforward debate.

Our recent session on creators’ digital rights occupies an important yet complicated space in a rights debate fraught with complexity.

Centre stage is the determination that a stream not be considered the same as a broadcast (even when streaming platforms offer their own ‘radio’ channels as part of their service), meaning creators’ royalties are paid on the same basis as a sale of their work, rather than a straight equitable 50:50 split as is the case with broadcast works.

Understanding how we got to this impasse is enlightening.  As David Stopps eloquently described, the WIPO Treaties that were borne out of recognition of the need to accommodate the impact of emerging, disruptive new technologies including the Internet were at the time quite visionary, bearing in mind the process began in 1992 – then occupying a world of dial-up Internet that was by some distance pre-iTunes (2002), and by a long way, pre-streaming (2008 – 16 years later…).

The irony however, is that the very legal instruments created in good faith to protect creators’ digital rights have so comprehensively failed to evolve during the rapid development of digital and online distribution.  Depressingly, to re-visit and amend WIPO Treaties is a herculean task involving 217 countries and a timeline that would see most of those currently grappling with these issues well into their dotage.

Thus, 2015 has played out against a backdrop of discontent from the artist and performer community which, in light of recent Q4 and year-end financial results, is only set to become louder; Warners and Universal have both announced that streaming has overtaken download revenues (Q4), with ‘digital’ now accounting for almost half of all revenue.

Whilst this is great news for the platforms and the wider industry, it’s not such great news for content creators on which the music and tech industries depend, the vast majority of whom are clamoring to secure a fairer share out of streaming.

That label business could survive on a 50:50 split of net profits from streaming is as unviable as the notion that creators can continue to sustain themselves on the current meager payout which for all but a rarified few just tips over into low double figures.

There have been notable examples of label support for both streaming platforms and artists.  In true Independent spirit, Beggars was the first off the block to publicly declare its position and share streaming royalties truly equitably with its artists, noting that it had to row back from that position a year or so later – a 50:50 split being economically unsustainable in the long-term.

There’s clearly a desperate need for some middle ground in a debate that is certainly polarised, and that once and for all also needs to address the wider issues of artist deductions for digital music as part of an agreed way forward.

The industry is desperately in need of a pragmatic response to determining what that split should be.

In the short term there is no incentive for labels to necessarily reduce their share of the pie to favor creators, however, it’s absolutely in the long-term health of the industry – not to mention the economy – to reach a pragmatic, sustainable solution for all.

The French have taken a bold step in establishing an ethical code of conduct between artists, labels and digital services – albeit a voluntary one – called Agreement For A Fair Development Of Online Music.  Essentially it’s a call for true transparency of digital deals; an attempt at establishing a fair and level playing field in the digital music ecosystem, and was drafted at the behest of the French Government.

Whether or not there might be an appetite in the UK for a similar code is a moot point in an industry loathe to be further regulated.  No doubt, how the French code progresses will be closely observed.

The MU’s Horace Trubridge warns of a very bleak future in the absence of an agreed way forward.  From the perspective of a sector that has united so well in its fight on matters such as copyright reform and anti-piracy, yet is so divided in reforming digital deals founded on analogue constructs, his call for “a truth and reconciliation process between labels and performers” couldn’t come at a more important time.

Editorial by Jonathan Robinson

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