Even though conservative members of the German grand coalition government have been asserting that they would support pro-copyright legislation that would help strengthening the position of rights owners it increasingly looks like the current administration will not be shaken by the entertainment industry’s push for a “three strikes” rule. Germany’s federal minister of justice (U.S. = attorney general), Brigitte Zypries, a member of the more liberal leaning Social Democrats, recently made it clear she does not want to persue that route.
Zypries had called for a meeting with the six largest internet service providers in the country to discuss how a graduated response model like the one discussed in France could be implemented in Germany. Disconnecting filesharers from the internet seems to be a hot issue in law-making circles. However, Zypries does not see this happening anytime soon. According to her position, the three strikes concept is incompatible with German privacy and telecommunications laws.
“I don’t think that is a fitting model for Germany or even Europe”, Zypries has been quoted. Labels shouldn’t delude themselves. The German government’s opinion sounds determined: “Preventing someone from accessing the Internet seems like a completely unreasonable punishment to me. It would be highly problematic due to both constitutional and political aspects. I’m sure that once the first disconnects are going to happen in France, we will be hearing the outcry all the way to Berlin.”
The always interesting Helienne Lindvall has a smart post on her blog over at the Guardian about the question of musicians’ rights in today’s label landscape. She makes the the case for acts who refuse to sign with a record company that tries to obtain too many rights. The article highlights the push by the recently established Featured Artists’ Coalition (FAC). A good read.
The issue of ownership is a hot topic among artists and managers at the moment. Traditionally, when an artist signs a record deal (particularly with a major label), they assign the copyright of their recordings to the label. This means they no longer own them and only have a right to royalties. In fact, the only way artists might get them back would be if the label went bust.
One of the main problems with labels owning recordings is that once artists are no longer under contract, the label isn’t obliged to do anything with them. The label may have been bought by another, the people who cared about your music may have been sacked, or maybe the label is too busy focusing on “the next big thing”. This is known as your music being in “the lock-up”.
For years the recording industry in Europe and especially in Great Britain has been pushing for an extension of copyright protection for performing artists. Last year these plans arrived on the EU stage with Charlie McCreevy, the EU Commissioner for Internal Market and Services, introducing a term extension directive that will be voted on sometime this year, possibly as early as February.
Most music industry trade organisations have welcomed McCreevy’s plans that tries to be balanced in extending the protection term from 50 to 95 years while including a “lose it or use it” provision that would pass copyrights back to the musicians if the labels don’t publish their work, and a fund for session musicians. But not all interested parties are seeing the balance in the EU’s plans. While McCreevy claims that under his directive session musicians would benefit considerably the Open Rights Group says that some 80 percent of recording artists would only receive between €0.50 and €26 each year if the proposal becomes law.
McCreevy, however, is positive that the new proposal would allow performing artists to make a claim for remuneration based on sales, giving them an average yearly payment of €2,000. “Opponents to the extension argue that an additional annual income of around €2,000 per year for session players is not significant enough to allow performers to participate fairly in the millions that the proposal would provide for record companies,” McCreevy recently said. “Well, to that criticism I can say that the average annual pay-out might not appear significant to academic critics but €2,000 extra per year is significant for an average session player.”
But most study groups and economic experts have concluded that a term extension would give little benefit to artists and a lot to major media and record companies who could continue to market their catalogs. Most prominently, Andrew Gowers, the man who held a far-reaching investigation into copyright reform for the British government, called the proposals “out of touch with reality” and Prof. Bernt Hugenholtz at the University of Amsterdam, who advises the EU on copyright matters, called McCreevy’s directive a “deliberate attempt to mislead Europe’s Parliament”.
Add to that Martin Kretschmer, a professor at the University of Bournemouth, who said that the market penetration of the four largest music labels is so vast “there are almost no significant recordings reaching back more than 50 years which are controlled by other companies.” More than 70 percent of the revenues resulting from a copyright extension would go to the record labels, he added. As lengthening their exclusivity over pieces of music would enable them to charge higher retail prices, they could reap extra profits of between €44 million and €843 million per year. Notably, the only study supporting an extension came from UK label body BPI.
The Open Rights Group doesn’t want to let this proposal pass by the Commission and the European Parliament. That’s why they produced a little clip to inform MEPs on the background:
Becky Hogge, director of the Open Rights Group, accuses McCreevy of concocting a “fairy tale” with the story of the “poor performer who has played on a track in the 1960s and has collected royalties for 50 years. We are told that [without extension] he will lose the main source of income at the very time he needs it most. This looks simple enough for MEPs to give it a happy ending.” However, Hogge adds, “all the evidence shows that the term extension directive will do very little and almost nothing to help the poor performer and everything to line the pockets of the world’s record labels.”
The directive will be discussed at a meeting of the EU Parliament’s legal affairs committee, scheduled for February 11 & 12.
What do you think? Should Europe introduce a term extension? Who would benefit from it most? And why would that be a good/bad thing? Drop me a line in the comments.
This music industry claim saying that 95% of all downloads are illegal and unpaid for is causing British legislators to act. Since record labels and ISPs won’t come to terms on how to limit filesharing (even though both parties had agreed to a “Memorandum of Understanding” half a year ago), the situation isn’t really changing. No voluntary agreement has so far deterred anybody from getting their music for free online. This failure to come up with a workable solution has now startled UK politicians.
According to information obtained by the Financial Times, UK “ministers intend to pass regulations on internet piracy requiring service providers to tell customers they suspect of illegally downloading films and music that they are breaking the law.” This provision will be part of the upcoming report Digital Britain, prepared by Lord Stephen Carter who in the current UK administration is in charge of technology and communications.
The proposed new law would also make ISPs collect data on serious and repeated infringers of copyright law, which would then be made available to music companies or other rights-holders who can produce a court order for them to be handed over, the FT reports. Who would take care of that? A new monitoring body called Rights Agency which would be overseen by Ofcom, Britain’s broadcasting regulator (think FCC).
The costs for this Rights Agency are to be shared by both ISPs and rights-holders, says the draft. What consequences repeat offenders would have to fear remains to be seen. The FT report provides no details to that question. I’m sure ISPs and labels in France and Germany are watching this closely.
International music trade body IFPI on January 16 released their Digital Music Report 2009 – right in time for the industry gatherings MidemNet and Midem in Cannes. According to these latest figures, the digital music business grew for the sixth consecutive year. In 2008, the increase in global sales was approximately 25% to a trade value of $3.7 billion.
This is of course against the backdrop of an overall global decline in recorded music sales of around 7% last year. The Digital Music Report ‘09 goes on to specify that by now digital platforms account for 20% of all recorded music revenues – up from 15% last year. Sales of single track downloads, which still are the key driver in the digital business, grew 24% to 1.4 billion units with Lil Wayne’s “Lollipop” ending up being the international topseller of the year at 9.1 million units. Digital albums experienced a growth of 36% in copies sold.
The most important global territories for digital sales are basically the same as in the physical world with the United States leading the way ahead of Japan, UK, Germany and France.
In these markets digital growth happened at very different speeds. During the first half of 2008, digital accounted for 39% of recorded music sales in the U.S. That percentage was more than four times that of Germany (9%) in the same period. This corresponds with the differences in consumer spending for digital music. While American broadband users on average spent $12.50 on digital music last year, music consumers in the UK only spent $7.80 for downloads in 2008. It’s even less in other European territories.
Even though IFPI sees great improvements in the market, the digital business is still hampered by piracy. Chairman & CEO John Kennedy explained that record companies are transforming their business models “in an environment where 95% of music downloads are illegal and unpaid for”. According to IFPI estimates, more than 40 billion tracks were fileshared in 2008.
Kennedy still plans to battle this issue by trying to come to agreements with ISPs on models of graduated response. Last year had seen a “tipping point” in that quest, he said. Meanwhile France, UK, Germany and the U.S. appear to be on the same track for this approach.
Bertelsmann’s new music unit, BMG Rights Management, says its first three months of operation have been quite a success. The newly formed company headed by Managing Director Hartig Masuch opened offices in Paris, London, Milan, Amsterdam and Madrid during the start-up period. Response from the creative community throughout Europe had been overwhelming, Masuch says.
The former head of BMG Music Publishing Germany claims BMG RM has been making rapid progress since its inception in October. He and his team managed to snap up 2raumwohnung from Sony BMG and Peter Fox (aka Pierre Baigorry of Berlin-based dancehall group Seeed) from Warner Music. Another new artist represented by BMG RM in Europe is songwriter Toby Gad who in the past had worked with Beyoncé, Natasha Bedingfield and Fergie.
BMG RM signed several more artists, including German singer/actress Yvonne Catterfeld, Austrian pop sensation Christina Stürmer, Laith Al-Deen, vocal group Die Prinzen and Techno veteran Westbam (that one I don’t understand). Masuch didn’t specify which rights BMG RM will administer with each of these signings. The company had previously said it would “offer custom-tailored services for songwriters and performers who want competent support in the creation, marketing and licensing, collection and accounting as well as advance financing of their music repertoire.”
In addition to these new signings, BMG RM can access a pool of some 200 artists the company inherited during the de-merger of Sony BMG. From a local perspective, the most notable act on that list is probably German pop/NDW queen Nena who was discovered by Masuch in the 80s (even Americans remember her hit “99 Luftballons”/”99 Red Balloons”). BMG RM represents the singer’s full catalog of master rights plus rights to her future work.
Masuch will be in Cannes at Midem in the coming days to promote the company.
“Comes With Music”, Nokia’s plan to sell new cell phones by bundling the gadgets with almost free access to a vast catalog of digital music, seems to be a tough sell. At least in the UK where exclusive retailer Carphone Warehouse is not reporting that CWM units are flying off the shelves. In fact, CPW had to cut the price on its CWM offer by one third.
Instead of £127 ($185) the Nokia phone 5310 now only costs £82 ($120) which means users can download “for free” and have a phone for less than 33 cents a day. While it seems like CWM is – as of yet – no runaway success, Nokia is preparing a German launch for the service. The new cell phone Nokia 5800 XpressMusic which comes with a touchscreen and 8GB of storage will hit stores there on January 16.
No details yet, on when CWM will be ready for lift off in Germany. Company spokespeople say Nokia is still negotiating with distribution partners and providers about a broad release. In the UK Nokia wasn’t able to place CWM with any of the big four providers. Pricing hasn’t been released either. Nokia recommends a retail price of €395 for the 5800 XpressMusic (that’s without a contract and without CWM).
The French have been working on this for months now, so have the British. Even the content industries in the United States are leaning this way now. No wonder then, that the consensus-driven worlds of business and politics in Germany are getting on the bandwagon, too. I am talking, of course, about what has become known as the “3 strikes rule” or the “Reposte Gradueé”. The German trade org BVMI has been pushing this since last year.
Handelsblatt recently reported that Brigitte Zypries, federal minister of justice (U.S. = attorney general) has called for a meeting with the six largest internet service providers in Germany to discuss what a graduated response model could look like. The ISP summit is said to be scheduled for January.
Seperately, MusikWoche reports that Zypries is already planning a follow-up meeting with representatives from the music industry. Behind closed doors, the labels and the ISPs are apparently already talking about this sticky issue. However, the official position of the providers remains hostile. Being a deputy aiding the music industry’s goals shouldn’t be an ISP’s business, said Andreas Maurer, spokesman for 1&1 Internet – one of the six providers scheduled to meet with Zypries.
Apart form 1&1 the other ISPs lined up for the summit are Deutsche Telekom, Arcor, AOL, Freenet and Kabel Deutschland. Local studies say that 70% of all illegal filesharers could be convinced to stop their behavior with a graduated warning system.
