Artists Are Finally Part Of The Debate: Did The Industry Just Turn The Corner?

23 Oct 2014

Credits: Jonny Goldstein

The FAC has long-lobbied for artists to be included in the debate on the structure and functioning of the music industry; especially in the context of the current seismic shifts in rights management and digital distribution models such as streaming.

Whilst many established industry power-houses are still unwilling to engage in productive dialogue with artists, it seems that there are gaps appearing in the historic armour plating which kept the artists out of the board rooms and that the green shoots of useful conversations might be starting to appear.

From the legislative perspective, the new EU Directive on Collective Rights Management that was enacted in February this year is having a remarkable and unexpected influence as it states in its definitions that ‘rightsholder’ means any person or entity, other than a collective management organisation, that holds a copyright or related right or, under an agreement for the exploitation of rights or by law, is entitled to a share of the rights revenue.”

Suddenly artists are ‘rightsholders’ again, even in cases where rights have been assigned to labels for the duration of copyright.

This willingness for legislators in Europe to engage directly with artists is trickling down with the FAC discussing with the IPO on how our own UK government should consider implementing the new regulations.

The FAC has also submitted depositions to the US Department of Justice and copyright court to present the arguments against the withdrawal of digital rights from ASCAP and BMI by the major publishers.  The Sony/ ATV case where large upfront fees were taken in exchange for lower per-stream rates from digital provider DMX serves to illustrate the danger of the corporate NDA culture and the lack of a robust duty of care to protect creators and their rights after they have been assigned.1

There is also a glimmer of light at the end of the commercial tunnel.  The FAC has recently returned from a series of artist debates on streaming with Spotify coming to the table to talk through their business model and respond to artist comments and concerns in person.

These are not necessarily easy to unpick and clearly there is disparity between the big numbers seen in the press and the small revenues so far seen in artists’ royalty statements.  Additional concerns about the use of equity stakes and advances to suppress per-stream rates need to be addressed.

The conclusion for us is clear: we need to keep drilling down on the detail of how the industry may look in the future.  By talking to tech companies, we want to make sure that what works for artists and fans is part of the architecture as opposed to trying to play by the rules of past models that are already being seen as redundant by the next generation of both artists and fans.

Admittedly Spotify are the first and so far only company to engage in this way, but the FAC is planning an event for the start next year, for which early support suggests that where Spotify have led, others will follow.

The first ‘F.A.N.’ (Future Artists Network) event will take place at the end of February, 2015. F.A.N. aims to pull together artists, creators and the companies that communicate directly with fans to discuss the future of inputs and outputs in the industry with the freedom to focus solely on that relationship.  This leaves us unshackled (for a day at least) from the complexity of the rights management machinery that sits between artist and fan and which can often distort or limit ideas that might enhance that direct connection.

At the current rate of change it seems inevitable that artists and their representatives will eventually be able to pierce through the NDAs that have given rise to so much of the recent talk of big advances and equity deals that leverage artists’ work without the need to pay them.  Unrecouped advances will have given a short-term boost to the bottom lines of some large corporations.

These corporations need to act now to acknowledge the duty of care they should be exercising to protect the future revenue streams of artists whose copyrights have been assigned to them and who rely on good governance.

Now is the time for dialogue and negotiation in good faith for a code of best practice on which we can all rely.  If not, the environment of mistrust can only undermine the opportunity for a stronger, partnership-lead industry in the future.

By Paul Pacifico, board member, FAC & The AllStars Collective

1The Music Managers Forum (www.themmf.net) have reported on this point in detail, which you can read here.

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