Why Universal/EMI reminds us that the future model of the entire music industry must change: an open letter from the Featured Artists Coalition, released via Music Week...
In the last 50 years we have seen the rise of a recorded music industry based on copyright trading. Artists have signed to record labels or music publishers and sold their copyrights in return for finance and expertise.
The new rights owners took a risk whether the new copyrights generated income or not and were rewarded accordingly. Their reward was also that they owned the copyrights outright.
All copyrights could therefore be traded as though they were a financial instrument like a mortgage, albeit generating variable income. When creators were still under contract relationships had to be maintained and the view of the artist might be taken into account. When relationships did not continue creators assets were sold on without reference to them.
Key decisions in the courts changed the music publishing landscape decades ago but record labels have persisted with this model. The last ten years have seen a gradual change in label models to include more income streams such as live and merchandising. These new models are often touted as partnerships but copyrights are still being assigned (sold) rather than licensed.
Musical intellectual property is a cultural asset that lives and breathes both for those that created the works and those that enjoy them. To trade them like any other asset loses this subtlety and society become the poorer for it. Copyrights should be owned by creators rather than corporations.
As all of us come to terms with the excesses of the capitalist system and the constant pursuit of financial gain, perhaps music can set an example for how corporate transactions should be governed.
Selling to the highest bidder without input from the creators of the works and with little thought as to the impact on a post-acquisition landscape is a poor route to choose. The FAC is pursuing a vision shared by EC Digital Commissioner Neelie Kroes of an artist-centred music business.
When constructing these we need to be aware of sustainability. We need to think long-term about building businesses that will last. We cannot get this wrong. Mistakes made now will have echoes for years to come. We need to remember Napster and what might have been. We need to build businesses with artists at the centre in control of their own careers.
What we don’t need when building the new artist-centric music business is to continue the old practices. Moving copyrights around from one entity to another to satisfy competition concerns or just for financial gain does little for the future – it just perpetuates the old structures and leads to a complete disconnect between, initially, artist and rights holders and eventually between artist and fan.
Artists become totally frustrated when their creations are traded and the umbilical cord between them and their creation is broken. They are then faced with dealing with a new owner of their progeny who may not have their best interests at heart. Copyrights should be offered to artists as first option not as an afterthought.
The FAC (left to right): Ed O'Brien, Nick Mason, Sandie Shaw and (inset) Mark Kelly
In addition, for ease of operation, and to avoid minority blocking rights, copyrights need to be unified so that one decision can clear a rights usage for the world. Territorially fractured copyrights are a step backwards into a world where complication inhibits commerce and the re-growth of the music business.
One of the biggest problems that the music business has failed to get to grips with over the past decade is the basic fact that we live in the ecosystem that is the worldwide web. We have seen this in the reluctance to embrace new models of marketing and the holding on to the release windows policy which encourages piracy.
Piracy doesn’t respect national boundaries so why does the music business when licensing? Nick Gatfield admitted recently that One Direction had been broken worldwide by 14 year old girls interacting on the web not through the traditional territorial medium of radio. We need to embrace that not deny it.
The Digital Copyright Exchange proposal should also be supported and pushed forward; a place where creators’ moral rights can also be asserted – or withheld. There doesn’t have to be a limit on the size of a transaction – it is up to the rights owner. As long as transactions are transparent and clear, consumers and rights holders worldwide should be able to commercialise music.
The future of the music business is a collection of thousands of artist businesses where copyrights are owned by creators as the centrepiece of their own enterprises. This will not mean the destruction of the existing structures but an adaptation where those structures will service artists and be rewarded for their skills and investment. Innovation rather than legislation is the future.
Let’s remove the barriers between artists and fans. Music is in safer hands when the fan and the artist are closer together.
Mark Kelly (CEO)
Nick Mason (co-Chair)
Ed O’Brien (co-chair)
Sandie Shaw (co-Chair)
The Featured Artists Coalition