Newsletter Editorial #117: Who Pays For The Right To Copy?

15 Apr 2015

Earlier this month, MusicTank published the second whitepaper under its Future Thinking strand of activity – Private Copying Of Music: A New Model For Artist Compensation.

This paper probes the issue of rightsholder compensation with regards to private copying – conspicuous by its absence from the UKs adoption of the EU Copyright Directive private copy provision, October 2014 – and itself an issue now destined for the High Court in a case collectively being brought by the Musicians Union, BASCA and UK Music…

The case for some sort of remuneration is a powerful one.  UK Music published a report in 2012 – The UK Music Consumer – in which it articulated the value added to devices and media that facilitated copying music from the humble cd, then said to account for 44% of the value of a basic MP3 player (then equivalent to approx. £21).  Similarly, a smart-phone’s worth in terms of its ability to copy from a cd equated to between 2.5 – 4.1% of the handset’s value (then equivalent to between £6.67 and £23.60).  And the same study concluded that the second biggest draw to consumers for cloud services was its ability to store music.

While the sale of physical product has indeed slumped compared with ten years ago, it still remains the predominant format for a majority, and given the recent news that vinyl album and single sales are once more becoming chart eligible, any speculation about the death of physical per se seems premature.

Whatever the figures, in broad terms, manufacturers’ profits from the sale of blank media devices, related hardware and software are largely what underpins the case for rightsholder remuneration, though interestingly, the music industry’s response is further nuanced – not all are necessarily gunning for some sort of levy.

There is more to this than simply whether rightsholders should be compensated for private copying.  At first glance, it’s perhaps difficult to see how the personal copying of a lawfully acquired piece of music for personal use on another device deprives rightsholders of any income, never mind understand why this copyright principle exists in the first place.

From a consumer awareness perspective, little has probably changed in terms of copying behaviour, and given a number of complications concerning what now constitutes personal copying ‘infringement’, what started out as an increasingly out-of-step copyright framework rightly protecting ever-diminishing rights in IP looks set to further confuse the consumer about what can be copied, and how, assuming the consumer is actually bothered enough to care.

The view of many within the industry is that it’s the wrong battle at the wrong time, especially when the relatively new ‘access’ model of consumption – streaming – is gaining traction, perhaps freeing many of the need to copy anything, given unfettered access from any connected device at any time.

Yet the fact remains that in adopting the EU directive, the UK remains the ‘odd man out’ in Europe by denying fair compensation to rightsholders.  From this standpoint, should the High Court rule in favour of compensation being made, the issue is how that might be done.

A snap shot of how other European states deal with this provides an array of approaches that serve to confuse the picture further.

The Danes impose a levy on memory cards but not on in-built memory devices (such as iPods and MP3 players); the French added a levy onto the sale of mp3 players.  Spain adopted a levy on blank media (CDRs/ DVDs CDRW and mp3 devices), only to abandon it in favour of settlement directly via the state and collective management organisations (collecting societies).  Most recently, Finland recently abolished its levy system altogether, replacing it with a government fund to compensate artists for the private copying of digital content.

And of course, collecting a levy is one thing, ensuring it is applied to media and devices that are used to copy music, and in a way that ensures equitable and transparent distribution that is proportionate to the music and artists copied is quite another.

We’re expecting wide interest in Sam Rudy’s take on how an appropriate levy system might work, kick-starting a debate that will air with a MusicTank think tank scheduled for June 25th – details for both below.

Meanwhile, let’s hope that any music industry campaign to support the Appeal doesn’t fall prey to the law of unintended consequences and avoids the negative pr that accompanied the lobbying for copyright term extension in sound recordings that saw wealthy rock stars bemoan an imminent end to mechanical royalties from recordings whose copyrights were set to expire…

Editorial by Jonathan Robinson

READ FULL NEWSLETTER HERE…

ADDITIONAL READING:

EU Private Copying: Situation Report

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