UK streaming inquiry report requires ‘proper to recapture’ copyrights after 20 years

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Yesterday MBW released news that an upcoming report on an investigation into the economics of music streaming in the UK had two key recommendations for the UK government that needed to shake up major music companies.

Our sources have usually been spot on: the report released today (July 15th) by the UK Parliament’s Committee on Digital, Culture, Media and Sport (DCMS) suggested exactly what we said.

The Members of Parliament (MPs) who orchestrated the investigation recommend that the UK government introduce a right for artists to earn licenses through “fair compensation” from music streaming platforms.

The report also recommends that the government refer a case to the UK’s Competition and Markets Authority (CMA) “for a comprehensive market study of the economic impact of the majors’ dominance”.

Buried further in the report, however, one recommendation is that could prove to be the most significant of them all.

The DCMS Committee recommends that the UK government “extend copyrights” after a 20-year period by introducing a “right of withdrawal” – a period that the report says is “longer than the periods when many labels are bad Write off claims but “appear in an artist’s career” briefly enough.

The introduction of this right, the report said, “would create a more dynamic market for rights and allow successful artists to enter the market to negotiate better terms for their rights”.

Here is the entire relevant passage: “We recommend that the government simultaneously expand copyrights by introducing a right to recover works and a right to adjust contracts when an artist’s royalties are disproportionately low compared to the success of their music, in Copyright, Designs and Patents Act 1988. These rights already exist elsewhere, for example in the United States, Germany and the Netherlands, and would give authors more leverage in negotiating contracts with music companies. We propose that the right to recovery should take place after a period of twenty years, which is longer than the period many labels write off bad debts but short enough to last within an artist career. This would create a more dynamic market for rights and allow successful artists to enter the market to negotiate better terms for their rights. The right to amend the contract should also be implemented as soon as possible to ensure that the rights of British authors do not fall behind those of European authors. “

Unfortunately, the choice of terminology used in the report risks confusing readers a little.

A reference to regaining rights for “works”, as is primarily the case, would suggest that the report is referring to songs or music publishing rights.

However, adding that such a change would “allow successful artists to enter the marketplace to negotiate better terms for their rights” seems more of an allusion to the rights to music recordings that are transferred to record labels.

The United States already has a “right of recapture,” where songwriters have the right to reclaim the rights to their work after 35 years if those works were published after 1978, under a provision in the 1976 Copyright Act.

The proposal to put a “right to retake” into law after 20 years in the UK comes as song catalog ratings continue to escalate.

Acquiring UK-listed company Hipgnosis Songs Fund, for example, owns a catalog independently valued at $ 2.21 billion after acquiring 84 catalogs for $ 1.06 billion in the 12 months ended March 2021 .

The value of master recording rights, which are much rarer than song rights, is also skyrocketing, as reflected in the recent purchase of David Guetta’s recording catalog by Warner Music Group for more than $ 100 million.

Should a “right to recapture” ever be enacted in the UK that would allow more artists / writers to sell their rights / work to interested parties more frequently – we could potentially see more M&A activity in the rights market in the years to come.

According to the streaming research report, implementing such a right in the UK would “prevent the most valuable rights from accumulating with the most capitalized labels and create a market for reclaimed rights where companies would compete for royalties and upward repayment terms “. .

Elsewhere in the report, MPs explained in more detail how to rebalance the value of songs – and the rewards of songwriters, composers and independent publishers.

According to the report, “While they are an important part of the music creation and streaming process, song rights holders are not effectively rewarded for their work.”

MEPs therefore “urge” the UK government “to consider how to ensure that the song is rated on an equal footing with the recording”. Where appropriate, in addition to introducing fair remuneration for performers, the UK government should propose legislation “to ensure that all authors benefit from these reforms”.

The government should also “urge the CMA to examine how the majors’ position, both in recording and publishing, has affected the relative value of song and recording rights, the report added.

“Our parliamentarians have found out in a short time why songwriters and artists are not properly paid, and we welcome and support their efforts.”

Merck Mercuriadis, Hipgnosis

Merck Mercuriadis, CEO of the Hipgnosis Songs Fund, welcomed this section of the report.

“This is an impressive report from the DCMS committee,” he said in a statement today.

“Our parliamentarians have quickly found out why songwriters and artists are not properly paid, and we welcome and support their efforts.

“We are particularly focused on their recommendations that the law should completely reset streaming so that songwriters and artists receive a fair share of the revenue, and that the government also refer the case to the competition and market regulators for a full market study the economic impact of the dominance of large musical groups.

“This is important to ensure that the unhealthy control that the major record companies have over streaming negotiations is addressed and to expose the fundamental shortcomings in the music industry.

He added, “We want songwriters to be paid fairly and fairly, in a way that recognizes that without the song we would not have a music industry.

“If we want to make streaming really fair for songwriters and artists, it is ultimately crucial that they have a direct seat at the negotiating table, have exclusive rights, not just a right to compensation, and are paid according to the share they have taken Record companies. “Music business worldwide

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