Archive for April, 2011

UPDATE - SAVING MUSIC

New Media Law is delighted to report that it will, together with Peter Jenner (General Secretary of the IMMF), be meeting with Lord Clement-Jones - the Liberal Democrat peer that is currently promoting the “Live Music” bill - at the House of Lords on April 26th, to present the concept of the “music charge” to the UK Government.  

Watch this space!

See: http://www.musictank.co.uk/resources/speaker-biographies/peter-jenner

See: http://bedfordlibdems.org/en/article/2011/456672/live-music-bill-will-benefit-hundreds-of-small-venue-owners-clement-jones

SAVING MUSIC?

SAVING MUSIC?

New Media Law is leading a campaign for a new way of ensuring that musicians get paid for their music.

At present, it is increasingly accepted that the recorded music industry is “over”, as it becomes apparent that most people see no wrong in downloading free music, despite the fact that to do so usually infringes the copyright of the owner of the sound recording, as well as that of the songwriter. In the words of the UK music trade body, the BPI:
“The creative industries employ two million people in the UK and are the fastest growing sector of
the economy.  Urgent action is needed to protect those jobs and allow Britain to achieve its potential in the global digital market.  2011 must be the year that the Government acts decisively to ensure the internet supports creativity and respects the basic rules of fair play we embrace as a nation.”

“In September 2010 BPI commissioned Harris Interactive to conduct an in-depth online survey into the awareness, usage and attitudes towards both legal and illegal acquisition of digital music. Respondents were aged between 16 and 54 and of the 5,393 surveyed, 29% were engaged in some form of unauthorised music downloading.”  [See: http://www.bpi.co.uk/press-area/news-amp3b-press-release/article/new-bpi-report-shows-illegal-downloading-remains-serious-threat-to-britains-digital-music-future.aspx ]

According to the ISP Review (writing about the demise of the CD):  Sadly trade income from physical formats declined 6.1% during 2009, with total revenues down from £787.8m to £739.9m continuing the downward trend for the sixth year in a row. As usual, and despite the digital growth, the BPI appears keen to blame any reduction on only one reason - unlawful downloading by customers of broadband ISPs.”  [See: http://www.ispreview.co.uk/story/2010/04/28/uk-music-sales-buoyed-by-significant-internet-download-growth.html ]

SO WHAT CAN BE DONE?

In New Media Law’s view, nothing can be done to stop people accessing content for free.

The deadly combination of (relatively) new technologies such as the digitisation of sound recordings (which started with the CD), compression technology (making the digital file small enough to distribute easily) and the internet (providing the perfect distribution network) – means that the genie has well and truly left the bottle. 

In fact, in the case of music at least, millions of genies have left millions of bottles!

The major labels may not yet be prepared to accept that they have lost control of the distribution of recordings, but anyone under the age of 30 knows that they have. In 2010, there were 19.2 million households in the UK that had an internet connection and 30.1 million adults in the UK (60 per cent) accessed the Internet every day or almost every day.  This is nearly double the estimate in 2006 of 16.5 million [See: http://www.statistics.gov.uk/cci/nugget.asp?id=8]

Are these connections being used to download illegal music?  You bet.

In Harris’s view:  “Harris Interactive calculate that the total number of people in the UK illegally downloading music on a regular basis is 7.7m.  It is likely to be even larger given other methods by which music can be illegally obtained, such as e-mail, instant messaging and newsgroups.”http://www.bpi.co.uk/press-area/news-amp3b-press-release/article/new-bpi-report-shows-illegal-downloading-remains-serious-threat-to-britains-digital-music-future.aspx ] So, given that there are millions of internet connections, and millions of people downloading music for free, surely that is the end of the recorded music industry?

Maybe not.  In New Media Law’s view, there is an answer.

In the same way that the PRS and PPL collect money from radio stations and television broadcasters for the use of music, and then distribute that money to the copyright holders (by a system that is often referred to as “blanket licensing”), New Media Law believes that a similar system can be applied to internet downloads.

But, and this is important, it would not be a “blanket licence”.  Rather, it would be akin to the TV licence, which gives you the right to watch your television - but you still have to pay for football or movies on Sky.

Why?  Because there are many companies that operate perfectly legally on the internet, by offering music for download and/or streaming, after obtaining the necessary licenses from the copyright holders.  Obvious examples include iTunes, Amazon, Spotify and (eventually) Qtrax.  They already pay (some would say overpay) for legitimate licences, so they should not be made to “pay again”.  They wont be.

SO WHAT DO WE SUGGEST:  A “MUSIC CHARGE”

New Media Law’s proposal is for a “music charge” to be applied to every internet connection.  It would give the right to receive music on that connection - and people that don’t want to, can “opt out”.  It could be a sum as little as £1 per connection per month (more for larger commercial broadband users).  The charge can be collected by the PRS or PPL (or some new collective body with the relevant technical expertise), and then distributed amongst the copyright owners, based on a statistical assessment of what music is being streamed or downloaded via the internet.

Sadly, the “music charge” will need to be imposed by central government – as (in our humble opinion) there is NO chance of the ISPs adopting it without a gun to their heads.  Many in the music industry can confirm this after years of trying to get the ISPs to accept that literally billions of illegal downloads have been enabled by ISP connections – to no avail.

But it is a “tax”, we hear you say, and there is no way that the government will impose a new tax on hard pressed consumers in the current climate. No.  It is not a tax.

Why not?  Because people can “opt out” if they don’t wish to receive streams or downloads of music via their internet connection.  And for anyone who doubts the logic of this, when is the last time that HMR&C sent you a tax demand, starting with the words “you can of course opt out of making this payment if you wish to”.

WHEN SHOULD IT START?

Now.  New Media Law estimates that the new charge would raise at least £50m per month in the UK alone (plus of course a further £10m per month in VAT for the government’s trouble).

This money needs to be collected and distributed to those who make and own the recordings (and of course the songwriters who create the works in the first place), so that the vast pool of creative musical talent in the UK is sustained for present and future music lovers to enjoy.

IAN PENMAN
Partner

© New Media Law LLP 2011
London

1st April 2011 (and no, this is not an April Fool!)
J 
For further information please contact: ian.penman@newmedialaw.biz or rick.riccobono@newmedialaw.biz

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