A new Government-commissioned report has investigated the music industry’s licensing issues. It’s complicated, but pay attention – it has huge implications for the future of copyright in the UK and beyond. Here’s what you need to know...
Imagine: a simple website which allowed everyone in Europe to license a piece of music at the touch of a button.
No frustrating blocks in the process for emerging technologies; no irritating confusion over who is owed what. Just an Amazon-like online Eden: search, choose, purchase.
Both publishing/composing rights (‘musical works’) and recorded rights (‘sound recordings’) would be covered – so there’d be no confusion amongst those from outside the music industry that they’d paid ‘twice’ for a song.
A pipe dream? Richard Hooper doesn’t think so.
Hooper, a former deputy chair of OFCOM, was appointed by the Government last November to find a solution to a troublesome query: is it possible to create a true online Digital Copyright Exchange (DCE)?
The question was put forward by Professor Ian Hargreaves in his root and branch review of copyright – and Hooper reckons he’s highlighted the foundations of a solution.
For the past eight months, Hooper and his team have investigated the music industry alongside other markets reliant on copyright. In addition to a Digital Copyright Exchange, Hooper’s final report has called for an easier blanket licensing model – where companies apply to PPL or PRS to be able to play a vast catalogue of licensed music with just one payment.
It also calls for better data ‘building blocks’ (to ensure that when someone is looking to license, the information they receive is comprehensive and correct) and, importantly, the creation of a Copyright Licensing Steering Group. This group would drive home implementation of the Digital Copyright Exchange.
Here we highlight some of the key findings and recommendations from Hooper’s research in more detail – and some of the questions they throw up…
1) There is a perception that music is hard to license. It’s wrong.
Hooper’s report continually requests that the process of music licensing is made less complicated – and involves fewer companies, particularly across Europe. However, Hooper himself reports: “There is a widespread perception that copyright licensing in the music industry is not as easy to use or accessible as it should be. The reality is that the music industry has made significant strides to streamline copyright licensing, especially over the eight months of the review period.”
Hooper says his team invited individuals or organisations who had experienced difficulty with music copyright licensing to come forward – so that he could arrange meetings with leading industry figures. “In four months,” he concludes, “we have heard from no-one.”
However, Hooper notes that the incorrect perception needs addressing by the industry – and that it “damages the [music] industry when it makes any ask of Government regarding stronger enforcement against copyright infringement.”
2) The music industry could teach other copyright types a thing or two.
Hooper shines a light on efforts by both PRS and PPL to create global repertoire databases in their respective fields of musical works and sound recordings. These represent a singular hub full of accurate information on the rights associated with certain songs – and could even form the basis for Hooper’s feted DCE. The PPL’s Global Recording Database, Hooper reveals, has already seen 8,500 record company members deliver data for over 5.6 million recordings. The goal is to now start folding in worldwide data. Hooper’s so impressed, he says: “The two GRDs will be exemplars for others to learn from and follow.”
3) Getting a copyright exchange right may assist with anti-piracy legislation.
Hooper’s call for a fully independent industry body to direct the creation of a copyright exchange wobbles at one point – when the author questions whether some Government interference might not be a bad thing… and could even benefit the music business’s fight against piracy.
“Industry and the Government could look at whether there is any productive and cost-effective overlap between reporting on and monitoring all the work described in this final report and Ofcom’s reporting requirements under the Digital Economy Act,” he says.
“This approach has the advantage of an independent voice but the disadvantage of perhaps moving away from the industry-led and industry-funded philosophy underpinning all of this work. Given Ofcom’s new role [under the DEA] in relation to copyright enforcement this may be an important idea for industry to consider given their concerns about copyright enforcement not being forceful enough.”
4) A digital copyright exchange? Great! Who’s paying for it?
Short answer, you are. Hooper doesn’t elaborate too much on the idea of the DCE being ‘industry-funded’, other than to say: “The creative industries have agreed in principle to fund and provide an offer to continue this work for one year in the first instance, subject to more detailed discussions with Government.”
However, he does concede that the Government could offer some ‘pump priming’ and even Brussels could step in – so long as “the usual reporting and monitoring for use of public monies would be required”. To this end, UK Music CEO Jo Dipple has already committed to producing an annual report for the Secretary Of State detailing how progress is being made towards Hooper’s goals.
Said Dipple: “The front-footedness of the British music industry has been rightly recognised in Richard's report. But there is work to be done and UK Music has tasked itself to give the Secretary of State an annual update on the proposals.
“It is very important that we work together to maintain the momentum this process has created. We look forward to hearing Government's response to specific proposals.”
Hooper recommends that the Hub's steering committee should be managed by the report's head of secretariat Dr. Ros Lynch for its first year, and further comprised of senior execs from the creative industries.
Hooper told Music Week: “We would look for the vast majority of [the DCE plans] to be industry-funded. The [music] industry can't have it both ways. These are either problems that if solved will increase their revenue, and so they should fund it - or if it's not a problem for them, if it doesn't solve their issues and doesn't increase their revenues, then why are we doing it?"
5) This isn’t just about the UK.
A UK Digital Copyright Exchange is a great prospect for industry – but pushing that out into Europe is a dream. Could it come true? Hooper certainly senses a willingness within the music industry. He quotes Albert Pastore from Nokia on his attempts to licence music across the EU.
“For digital music services… licensing must move to true multi-territorial, repertoire-specific licensing, enabling service providers the ability to commercially negotiate royalties covering the full scope of the service being offered and to make available their service across multiple EU states, potentially to the EU’s 500 million consumers.” Hooper agrees that potential licensees should expect to speak to a “reasonable number” of licensing entities – somewhere between six and ten.
“Currently the EU region has 30+ licensors… and this can discourage service providers,” adds Pastore. Hooper applauds the recent draft European Directive on collective management of copyright. But he warns: “It may not go far enough in overriding individual country regulations and this could inhibit the development of pan-European services.”
6) PPL and PRS must come together… and they already are.
Hooper is very hot on the need to “reduce complexity and expense” involved in music licensing – and a big part of that revolves around PPL and PRS For Music teaming up when possible. This initiative is set to spawn a joint licensing solution for small workplaces, administered by PRS, and one for amateur sports clubs, administered by PPL. In addition, PPL boss Peter Leathem and his PRS compatriot, Robert Ashcroft, have committed to a joint advertising campaign in various Chamber Of Commerce titles – expected to launch in September – and joint attendance at key trade events. Hooper has applauded the moves.
Said Ashcroft: “We both welcome and support Richard Hooper's findings and will work with our partners in the industry to meet the challenges he identifies, providing a better licensing environment for all. Looking ahead, we believe that the Copyright Hub recommended by Hooper could place Britain at the very centre of the global, online market for the creative industries. Coupled with industry efforts for a Global Repertoire Database (GRD), it will prove to be a critical building block in what must inevitably be an international project.”
Added Leathem: “In their very sensible report Richard Hooper and Dr. Ros Lynch have understood the importance of robust data to support licensing in the digital age and the efforts that PPL, and its record company and performer members, have made on this front. Even though there is more to be done they have helpfully suggested building on such work to make both direct and collective licensing solutions even more compelling to businesses. PPL has also committed to continue to develop its licensing services and will collaborate with the wider music industry to achieve this.”