Jake Beaumont-Nesbitt: In the copyright and DSM debates creators are weak

09.29.15

Jake Beaumont-Nesbitt, policy advisor for The International Music Managers Forum, comments on the topic of a European Digital Single Market and finds that the creative industries failed to grasp the opportunity of the Reda report and went on the defensive.

What should the commission prioritise?

Digital has transformed how consumers access copyrighted works, a greater choice of content is available at easier price points, through easier distribution channels. Following massive changes we have a new situation in which more culture is available for more citizens, and that can not be described as bad news. There are still issues to overcome, but even if it were possible to reverse the tide of innovations, collectively Europeans would not want that reversal. The challenge for the commission is therefore not to reverse progress, but to secure it; and to ensure that the costs of this digital revolution are taken in such a way that the value of culture is maintained.

How do we define the value? Just as commissioners would be well advised not to propose legislation that defined a former valuation mechanism as the enduring mechanism for valuation (i.e a law that music files should only be distributed by CD, and only at a price point that generates the same profit to music rights holders as the rights holders were once accustomed to in 1995), the commission can not make a list of good (valuable) and bad (worthless music). The choices the commission and MEP’s have available to them are to some extent constrained. They can not look to design a music industry, or to heavily intervene on pricing, to regulate consumer behaviour, or select the Eurovision song contest winner, (although a bias for Estonian music could be positive). Therefore the most normal political necessities emerge as parameters: support positive developments, ease the burden on the weakest.

Function of copyright in the DSM

Copyright is a commercial law that covers emotional constructs. The “products” that come from the rights that copyright concerns are woven from the imagination of individuals. When these products are shared the audience make their own interpretations of these “imaginings”. In protecting the value of culture, the commission need only focus on the two ends of the “value” chain, the creator, and the consumer, and ensure the exchanges of imagination between them are possible and sustainable.

No longer fit for purpose.

The music industry is a bit like a statute book. Think of layers of medieval laws being supplemented by renaissance ideas, layers of industrial revolution needs, and so on. Some of the most antiquated laws survive, and only the ones most relevant to any legislatiors current concerns are ever reviewed. Some of the ways the music industry works are relevant to 2015, and some are based on what was happening in 1851, and some are based on changes driven by sales of gramophone players in 1951. It must be really, really difficult for the commission to know which pieces of standard music industry practice are based on sustaining a business interest, and which are essential to the needs of creators and consumers.

Geo-blocking

I believe that currently the music consumer is doing OK. Price may move about a bit, but there is healthy competition in delivering music services so consumers should not be too concerned over price. Supply is excellent, and there are still new alternatives emerging. The go to issue in Brussels for consumers is geo-blocking “I’m watching a film in Belgium, my train crosses without border controls into Luxembourg my access is blocked”. Geo-blocking is used as proof that the Digital Single Market is not working. It is irrefutable. The Music Managers Forum and many within the film industry, and others in the content industry have largely accepted that if we can maintain a windowing period (windowing by format, by territory, by release date) in the early period (0-18 months) of a copyrighted works release, that will help to fund localised strategies, which in turn support a return on investment, and help an artist to physically get around Europe to promote the digital release in each territory in person (media appearances, live shows etc).Having said that geo-blocking in the long term does not work. As Vice President Ansip has made clear, details of release strategies and windowing can be discussed without having to take a stance against the principles (i.e portability of content on licensed services) that are fundamental to a digital single market.

The weakest

Let’s not forget to ensure consumers are doing OK, but let’s drill further into the problems of the most vulnerable in the copyright wars, the individuals whom copyright was intended to help, the creators. Musical Artists would really like to see the topic of transparency replacing geo-blocking as the headline issue for discussions on the integrity and viability of the Digital Single Market. Geo-blocking is an easy topic to illustrate: a train, a border, the disappointment of an unfinished story; equally transparency is an easy word to appropriate, and a hard word to put into practice.

Transparency

As artists representatives we have long been calling for the transparent flow of information to the artist. Information regarding what happens to the rights that artists create, and how the rights are monetised. A function of copyright is to support creativity, therefore creators need to know how copyright is being used to support them, otherwise copyright is simply appropriated to support others business interests. The word “transparency” is now being thrown about as a formality of introduction by anyone and everyone: “Good afternoon commissioner, we stand for transparency, I hope you are well, did you see the football scores, we are here today because…”. If I were a commissioner I would find it really hard to find anyone who stood against transparency.

Impact assessment

Estonia is a world leader in digital access, digital government, and digital citizenship, so Europe is fortunate to have an experienced member of the Estonian system steering the Digital Single Market. Just as the success of policy delivery is not only measured in terms of what citizens want i.e. lower taxes and higher standards of public health care; policy success is measured by the choices made, i.e by the sustainability of funding hospitals. The success of the DSM, in terms of music, can only be ensured if the sustainability of creators is part of the impact assessment. The debate should not only be about what consumers want, but also about how sustainable delivery of new music is ensured.

Transparency is the key to a level-playing field, and to analysing the market, so transparency is also the key to the sustainable delivery of new music. The key to delivering a DSM for music is to give weight to creators data, alongside consumer data and feedback. If intermediaries (collective management organsiations, record labels, publishers, digital service providers) are claiming to speak for creators, or if they are suggesting that transparency is important to them, they need to be able to demonstrate that. The simple use of phrases like “we want transparency”, or “we support creators” , should not annoint any business as the indispensable heart of the music industry. The creators are the indispensable bit.

DSM’s impact on creators

Only by mapping the data the creator receives can the commission have a sound basis for impact assessments of the DSM on creativity. Then the commission can propose solutions to reform copyright in such a way as to deliver for both ends: creators and consumers. Creators are currently weak, MEP Reda recognised this when publishing her report, by describing transparently who had lobbied her, and that she would like to hear from more creators. Showing the numbers is one part of transparency, showing where there was a gap, an absence, (i.e not many creators speaking up) is as important, because it highlights that in the copyright and DSM debates creators are weak.

Creators can often find it incredibly hard to discover from record labels, publishers, and collective management organisations exactly how the copyrights they entrusted to these intermediaries have been exploited.  The changes that have been made to the consumers experience of the music value chain have not been mirrored at the creators end. If one ignores for a moment the euro value flowing through the system, and just looks at how the data flows the old pre-digital back office is still in place. Consumers have connected modern devices, creators have the old back office. Some changes to the user interface of the music industry back office (a royalty statement arriving in a web browser as opposed to via pigeon post) are used to imply the digital revolution has occurred at the creators end of the value chain, but that is superficial.

A level playing field? For all European creators?

There may come a day when the global income of the recording industry creeps back up towards the old levels, and the DSM can contribute to that. If at such a point the old business model is still in place then few of the efficiencies and opportunities of digital will have been shared with creators. When the commission considers “value” for music creators in the DSM, it needs to consider creators data, not intermediaries profits. A functioning DSM should level the playing field for creators.

There are some clues that the playing field has not been leveled which in turn suggests creators are not seeing the width of benefits that the consumers have seen. One clue is that there has not been a growth in pan-European success for artists from more countries. Digital tools mean artists are able to give access to audiences across the continent. We know creativity is not a skill only some nations possess, so we should be seeing a more even geographical surfacing of creators who have success with a pan-European audience. We are not, and beneath that we are also not seeing investment in artists on a relatively even pan-European basis. It appears that investment in copyright is still focusing on geographical hubs. We need equal opportunities for all. Could the old system be gathering the money around the traditional intermediaries instead of using it to incentivise creators based on talent, regardless of geography? If there is a sort of geo-blocking on talent, investment, and promotion, transparency will show that.

Assessing the impact of the DSM on creators is not the same as assessing the needs of rightsholders businesses. In taking a look at how creative content can be valued in the DSM the creators data needs to be surfaced and analysed. Artists and their managers can not always get transparent answers and data regarding the usage of the artists creations; so the commission faces a challenge in getting past the arcane languages and rules of music industry statutes and traditions, and of arming itself with robust impact assessments.

DSM for small players?

Copyright is only of value to society if creators can use copyright exploitation to fund creativity. Creators have had a digital shock, income streams from specific areas of activity have collapsed. The way forward is not to rebuild the old income streams, it is to use the data to efficiently incentivise creators from new income streams.

Without access to the data generated around digital exploitations, creators can not describe new business models, or raise new finance, and the commission can not make impact assessments.

The new digital single market will not create a better business environment for small players including artists signed and unsigned, if the impact assessment is not sufficiently representative of data from small players. The commission has to pursue direct access to creators and their representatives (accountants, managers, lawyers).

Reda Report

The Reda report has broadly been a step forward, creators rely on copyright, but also often support exceptions (provisions for visually impaired, archives etc), and creators embrace the opportunities of cross-border access that badly implemented copyright can sometimes restrict, reaching wider audiences is generally what an artist wants. The diversity of national rules in copyright are still too complicated and that supports the complexity of accounting to artists. A pan-European system needs pan-European rules, and  further reform of the system, would help artists who are operating across borders to understand what happens to their music, where the money is, and to reduce the cost of considering accounting rules case-by-case, country-by-country.

Creative industries are often imagining a copyright rubicon that if crossed will lead to total collapse. This has seen specialist copyright issues (panorama, visually impaired, data mining) become battlegrounds. The effort given to defending old paradigms may be a less useful approach than creating a dialogue on what copyright could do in the digital age to incentivise creators. The vexatious issue of copyright term seemed never to be a strong target for Reda in her report, but the industry gathered itself around that issue (how much are my rights worth in a future year), as opposed to reaching out on how respect for creators rights in each and every year could be channeled into rewarding creativity. The creative industries perhaps failed to grasp the opportunity of the Reda report and went on the defensive. The commission has made some positive noises about seeking a wide dialogue, so I am hopeful that we will get another chance, and this time be progressive and support the commission in creating a functioning DSM.

MORE ON THE TOPIC:

P027889001102-752910Vice President for the Digital Single Market on the European Commission Andrus Ansip: Intellectual property law has to boost creativity and attract investments

 

Tapio-KorjusTapio Korjus (IMPALA): Geoblocking is not such a big issue for music industry