Before commencing our first debate, may I remind hon. Members that reference to people in the Public Gallery, no matter how distinguished they may be, is out of order and should not be done during the debate?
I beg to move,
That this House has considered artistic remuneration for online content.
It is a pleasure to serve under your chairmanship this morning, Mr Gray. I thank my hon. Friends the Members for Somerton and Frome (David Warburton) and for Folkestone and Hythe (Damian Collins) for helping me to secure this important debate.
Everyone is aware that the creative industries are one of this country’s greatest assets. The Government’s own analysis shows that the gross value added of the creative industries in 2014 was in excess of £84 billion, which accounts for around 5.2% of the UK economy. Essentially, they have been a source of growth in recent years, increasing by 6% since 1997, compared with 4.6% for the UK economy as a whole. However, we would be doing the industry a disservice to consider its value in purely economic terms, because its impact is far wider.
Our creative industries are our voice to the world. Very little, if anything, contributes more to the UK brand around the world than our artists, writers and directors.
Just a few weeks ago, the trade body, UK Music, published a report on the value of music tourism to the UK, which showed that direct and indirect spending in 2014 from music tourism was £3.7 billion. Some 38% of live music audiences are music tourists: music lovers from outside the UK. They come because they love our world-class artists and our fantastic venues and festivals. It might be easy to take our creative industries for granted and to assume that the country that gave the world Shakespeare, the Beatles, Harry Potter and Banksy will also be at the forefront of the global culture landscape, but that would be a massive mistake. Indeed, we in this House have a duty to ensure that our cultural sector has the tools to grow, including a copyright regime that is fit for purpose in a digital online market.
Members may have read about the recent public disagreement between songwriters and artists and YouTube over royalties paid by the service. In the last few weeks, 186 major artists in the US and over 1,000 in the UK and Europe have signed public statements of dissatisfaction addressed to the US Congress and to Jean-Claude Juncker. Signatories range from Sir Paul McCartney and ABBA to Ne-Yo, Idina Menzel and deadmau5, and even includes the former French first lady, Carla Bruni, who is also a recording artist—although I do not have too many of her tracks on my iPhone.
Last month, I met members of PRS for Music and songwriters and composers whose music and songs are enjoyed around the world. I heard from them the dissatisfaction that millions of streams can result in just a few hundred pounds in royalties or, in some cases, no royalties at all. Most dramatically, I spoke to one songwriter who was entitled to 25% of the revenue from a song he wrote, but who had seen a mere £5.39 from almost 3.2 million plays of that song on YouTube by listeners who actively sought out that track. Meanwhile, the same songwriter saw several times that amount—a princely £87.79—from the 180 occasions on which the song was played in stadiums in the UK, despite those listeners being passive and hearing what others chose to play for them. That seems to be a pretty upside-down arrangement.
To show how far behind the law the balance is, Geoff Taylor of the British Phonographic Industry recently said that British artists saw more revenue in 2015 from the 2.1 million vinyl LP sales than from the 27 billion music video streams on YouTube and similar platforms. It is not difficult to understand the despair of a writer or artist who sees their life’s work online with little hope of any financial reward now or in the future. This is particularly a problem for less high-profile producers, writers and creative people, who are less likely to have additional income streams from endorsements or touring.
High-profile artists are often very concerned about this problem and its impact on other members of the creative community and their teams. A big artist will often get little sympathy and, as we have seen recently, there may even be a backlash from the media and consumers for speaking out about the problem if they are perceived to be well off. Fair or unfair, this reaction just makes it harder to expose the problem and to support fair remuneration for those in the industry who are less famous.
The basis of the music industry’s concerns is the so called “safe harbour” laws, which in the US, EU and UK give user upload streaming services the same protection from copyright as host providers, such as personal cloud locker services. This is despite the fact that they operate entirely differently and, more importantly, impact the market in different ways. Take, for example, a comparison between Spotify and the user upload site Dailymotion. Both sites allow users to search for and listen to Adele’s track “Hello”, one of the fastest-selling tracks of all time. Spotify is licensed to stream that track and thus pays the artist, songwriter, producers, musicians, publishers and labels that are so crucial to creation of the content, but Dailymotion does not. Due to ambiguity in the safe harbour framework, user upload services can claim to be mere hosts of their user’s content and, as such, are not required to share with the creators the wealth they generate for themselves. That does not seem fair.
When a business model is based on making available to consumers creative content created by others, surely we as lawmakers must ask whether this is right. In fact, the very premise of copyright is to ensure that creators are paid when their work is exploited by others.
It may be easy to argue that the current framework is good for consumers. How can it not be, when music can be enjoyed more easily than ever before? However, I would add a note of caution to such assumptions and suggest that the user experience may not be as positive as it might first seem. When faced with piracy, it was universally agreed that creative content has an intrinsic value that must be protected if the future generation of creators are to be nourished for society’s economic and cultural benefit. These principles remain true today and we must not replace one market failure with another.
Equally, there are impacts on the licensed streaming services to which many users pay a monthly subscription. These services are forced to compete on an unequal playing field with user-upload services that pay little or nothing to creators. They are forced to offer their own ad-funded services, which are often run at a loss or subsidised by income from the subscription service. The net result is less competition in the market for subscription pricing and ultimately consumers could lose out.
In March, the all-party parliamentary group on music, which I chair, hosted a dinner to discuss the growing music streaming market. The dinner was well attended by services such as Apple Music and Spotify, as well as representatives of the music industry. It was clear from the dinner that streaming presents many opportunities for the industry and that it is embracing them. However, there are challenges in ensuring the music industry captures this value, such as whether advertising revenue and ad-funded models are sustainable and the growth of ad-blocking and stream-ripping technologies that can have an impact on the amount of remuneration the industry receives in return. The legal position of safe harbours and how they interact with the market perhaps presents an even more fundamental problem, and this will continue unless action is taken.
The Creative Industries Council launched its strategy this week, with many recommendations to the Government and industry alike. The council is seeking legal clarity concerning the liability of platforms that actively host and market content. Specifically, it argues that to maintain an intellectual property framework fit for the digital age, such platforms should not benefit from safe harbours. The Government have indicated that they would support a clarification too. I would be grateful if my hon. Friend the Minister said what plans the Government have to respond formally to that recommendation and what further steps they are taking to achieve that.
I declare an interest, in that I earned £10.60 in royalties from PRS last year for my songwriting—and paid 40% tax on it. Will the hon. Gentleman address the role of search engines in all of this? I recall that a few years ago we did a search during a debate and found that most of the results that came up were from illegal sites. Is that an issue that he thinks the Government should also be doing more to address?
It is absolutely an issue that needs to be addressed. I have myself searched online and found that the results I get are from piracy sites. Something has to be done. There is a responsibility in this respect not just for Government, but for the search engines themselves. Perhaps afterwards I can help the hon. Gentleman spend his £5.60 as we discuss what should come out of this debate.
We are in a unique place to address these issues and ensure that we are world leaders in striking the right balance between the promotion of technology and creative innovation. With the recent vote to leave the EU, the UK Government will have full control over policies related to digital streaming and artist remuneration. Will the Minister undertake to investigate whether provisions can be put in place so that once we eventually leave the EU, our UK industries can fully achieve the value in their rights?
That is encouraging. Will the Minister investigate, for example, the possibility of introducing a sunrise clause into the Digital Economy Bill? That could ensure that active hosts of content do not benefit from safe harbour when legal systems have been transferred and the European Communities Act 1972 is repealed.
It will not surprise hon. Members to hear me say that the music industry has undergone tremendous change and readjustment in its business models over the past couple of decades. The latest Intellectual Property Office and Kantar Media online copyright infringement tracker, published yesterday, concludes that the top three sources of music are YouTube, with 52%, Spotify, with 30%, and the iTunes App Store, with 20%. Use of Spotify has increased by 5% since last year’s tracker, while iTunes has fallen by 6%. The consumer trend is clearly moving away from music ownership. Copyright still reflects ownership for the creators of content and the infrastructure that supports it. We must ensure that those ownership rights are respected.
It is, as ever, a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on securing the debate and on all the work that he has been doing with the all-party parliamentary group on music.
This issue is of real and growing concern to musicians and has been for some time. As an MP for Bristol, which a fairly recent survey showed had more musicians than anywhere else in the country, I thought it was important to speak in this debate, and I am pleased that my constituency neighbour and hon. Friend the Member for Bristol West (Thangam Debbonaire) is also here to speak. She will be joining me in supporting Bristol’s bid to be capital of culture in a few years’ time, and obviously the musical contribution that Bristol can make is a very important part of that.
I associate myself with the views expressed by the hon. Member for Selby and Ainsty on the need for further action to address piracy, and especially on how search engines facilitate piracy and the need to clarify the legal ambiguity of safe harbour provisions, which are allowing the development of parasitic digital platforms that leech value from this country’s creative industries. I will be interested to hear what the Minister has to say and whether he plans to introduce clauses into the Digital Economy Bill to address that loophole, but today I want to speak on behalf of artists and about the need for a more equitable distribution of digital royalties between them and their record companies.
For many years, artists have spoken out about the considerable difficulties that they face in trying to make a living from the royalties that they receive from streaming. Taylor Swift pulled her last album from Spotify to make that point. Clearly, Taylor Swift will not be short of money whether or not she sells material through Spotify, but it was important that she took a stand on behalf of the many musicians who rely on royalties to make a living. If they do not get sufficient revenues from digital streaming, they literally cannot afford to be professional musicians.
Does the hon. Lady agree that although an artist of the standing of Taylor Swift has considerable financial and musical clout across the globe, that is not shared by the hundreds and perhaps thousands of musicians who have not yet broken through and perhaps will never reach anything like the standing that she has? What we are trying to do today is represent those artists, as opposed to one who has made a breakthrough and can take a stand. We are representing the many who cannot do that.
I totally agree. A few years ago I went into BPI’s offices and the staff there showed me the impact of illegal downloading on record sales, using Adele as an example. It was quite startling to see, by the second, how many hundreds if not thousands of illegal downloads there were. I said to them, “Yes, that does make a certain point, but I want to see what impact it has on the income of a struggling indie band that is on the verge of breaking through.” It would be easy for people to say, “Well, Adele is selling millions.” Yes, she is clearly very wealthy and perhaps can afford for people to access her content for free, but it is the principle, is it not? That principle should apply across the board. I have always said that it is up to artists whether they want to make their content free. If they see that making their content free online is a good move for their career, that is their choice, but it is equally their choice to be paid if they want to be paid, and people should not download illegally.
Going back to the legal streaming services, if we are to secure the future sustainability of the sector and encourage vibrant new acts to come forward, it is vital that artists can earn a decent living in the digital environment. The problem will only become more acute in the years ahead, as digital music revenues will continue to outstrip those from physical formats such as CDs and vinyl. There is a bit of a vinyl revival, but that will always be a niche area. It is illustrative that when I was talking to my teenage and early twenties nephews and nieces the other day, I found that they had never bought a CD. I think it is on the verge of becoming a redundant format.
There is an issue about how Spotify calculates payments to rights owners. It is too complex to go into detail about here, but it means that the money that we as individual consumers pay for streaming does not directly go to the bands and artists we are listening to the most, and it penalises bands with strong fan bases.
The primary cause of the problem that artists face with streaming royalties, though, lies in the contract that they have with their record label. Those contracts continue to pay artists royalties for streaming as though the stream were a physical sale of a product. They are continuing with a royalty rate from the pre-digital era, so things such as the manufacture, storage and distribution of a physical product such as a CD or vinyl album are factored into the contract. That simply cannot be justified when there is no physical product on the market.
Is not the case that the artists now have to accept that they need to be part of the digital streaming process whether they like it or not, and perhaps be dragged screaming and shouting into a new age where they do not want to be? That is the information that I am getting back.
It is always the choice of an artist how they want to market their product. Some artists are quite happy to do it on a part-time basis and just put their stuff on SoundCloud or whatever, or are happy just to be on the live circuit. It is clear that online content and streaming services are the future of the industry, but my point is that at the moment the musicians get only about 10% to 15% of what the label receives from the streaming service, because the physical cost of a product is built in. There are some contracts that are far more favourable to musicians, but by and large they are not, which the Musicians’ Union has been campaigning on.
In almost all cases, an artist will never see any of the online royalties at all, as their contract sweeps up the rights they have to royalties from the sale of recordings until they have paid back the advance they received from the label and any expenses incurred recording and promoting the artist. I argue that a fairer split of 50:50 would seem entirely reasonable, especially as this already exists for public performance and broadcasting income thanks to the equitable remuneration right. The Musicians’ Union has argued that when performers transfer their assailable rights, 50% should be a non-assignable equitable remuneration right, with the other 50% being an exclusive right assignable to the record company, to ensure that performers receive income from digital sales and streaming whether or not they still have an outstanding balance with their record label. For their part, record labels would be able to recoup their investment from royalties assigned to them under the exclusive right.
The Fair Internet for Performers campaign is taking this issue forward Europe-wide by campaigning for an amendment to EU copyright legislation. The hon. Member for Selby and Ainsty has already mentioned what the impact of Brexit would be and whether in a few years’ time we would be free to set our own rules. I would be grateful if the Minister clarified where we are in the limbo years, as we might call them. Will we adopt the EU copyright legislation as national legislation? Does he regard the EU legislation as a practical way of adequately rewarding artists in the UK for the streaming of their recorded performances?
It is vital to ensure that income streams actually reach creators, to ensure not only that performers can make a living from their art, but that corporations continue to have that talent to exploit, and for the future of new music and art, which I think all of us in this room would agree is incredibly important.
It is a pleasure to serve under your chairmanship once again, Mr Gray. I too congratulate my hon. Friend the Member for Selby and Ainsty (Nigel Adams) on securing the debate.
When Thomas Edison shouted “Mary had a little lamb” into his phonograph in 1877, he precipitated a musical earthquake, to use modern parliamentary language. By the time I was a teenager in 1977, buying albums and singles was not only the only way to get hold of the music we all wanted, but the primary way in which many of us defined ourselves. Artists then enjoyed an incredible boom. Someone might record an album on to cassette now and again, but that would usually result in a trip on the bus to Our Price Records—where I worked for five years—to get hold of the real thing: the 12-inch record, with all its magnificent gatefold glory, in all its splendour. When we got our hands on this object of desire, the artists would in turn get their hands on all the rewards for the joy that they had uncorked, but that is not so today. Now, the songwriting artist can uncork just the same degree of joy and deliver it to the world, which can receive it with the same degree of rapture but without paying a bean. We can click on YouTube and watch or listen to pretty much anything we like anytime and anywhere—unless we are in Somerset, where there is no internet or mobile signal—and do so for nothing.
Is it not the case that people have always been able to listen to music for nothing? We could listen to music on Radio 1 for nothing when we were teenagers in the ’70s. In a sense, streaming is the equivalent of that, in that it does not involve ownership. The issue is the lack of reward for the artist under this new way of listening to music for nothing.
Absolutely. The hon. Gentleman hits the nail with all of his head. He makes a perfect point, which I am just about to come on to; he is reading my mind.
When we click and listen, not only does the artist’s music become more ephemeral, more fleeting, less substantial, less physical, less tangible, but it also becomes commoditised, losing its uniqueness, brand and differentiation. In the way of the digital world, the user feels it is only right that the content should be provided free of charge. So now we have artists who attract huge audiences and whose content is played and shared millions of times, but who receive just chickenfeed—nothing more than a trace of recompense, having entertained people across the globe.
This began perhaps 15 or more years ago with download sites such as Napster and Kazaa—for which, incidentally, my company in a previous life provided all the mobile content globally. The music industry was slow to pick up on this revolution, but having got to grips with the download model, and with sensible paying business models finally emerging through iTunes and so on, it is now facing a new assault from the online streamers.
If the streaming services become over-regulated, which is what this debate is very much about, it could well be the case that, as the Financial Times has said:
“It is just as likely that consumers would sate their appetites for free content by returning to piracy instead.”
Does the hon. Gentleman share that concern that the Financial Times, and many of us in this Chamber, have?
I not only share that concern but think there is a concern that the streaming sites where the content is available for free are, in effect, pirate sites; they are providing the service that pirate sites would otherwise provide. Just because users might be pushed to other pirate sites, that does not mean we should not address sites that seem legitimate and are also providing the service for nothing.
Since YouTube is protected and shielded by safe harbour, other streaming sites find it harder to encourage users to cough up and pay for a subscription. Why would anybody pay if the content is available for free? Fundamentally, there is a clear transfer of value taking place from the content creator to the online provider. If there is an obvious transfer of value, it must be made clear that the online provider has a duty to compensate the creator accordingly. This is not much like the last time the industry faced the digital world. That time the industry closed its eyes, covered its ears and pretended it was not happening, but this time there is little doubt that streaming music is likely to be the key destination for consuming the products of much of the music industry.
The emerging business model is, of course, the subscription service, because it is the ultimate business model—it has clear, definable revenues, near certain cash flows and transparent growth. But as the streaming services see subscription revenues surging and advertising revenues bulging, the artists—the fundamental source of all that—become pretty much forgotten. That is patently wrong, and we must address it.
Government have their part to play. If the concept of active and passive content hosting is included in the Digital Economy Bill—I am sure we all look forward to hearing the Minister’s views on that later—that could well prove to be the answer, preventing active hosts from hiding behind safe harbour. Government must now work with the industry and the platform providers—the streaming services, the hosts and the content providers—to build a consensus and a model that is sustainable for all parties and that, crucially, allows those who uncork and create the joy, upon whose efforts the whole edifice is built and whose sound and fury draws us all in, to be properly rewarded and have proper control over all that they create for the rest of us.
Thank you for allowing me to speak, Mr Gray. I also give grateful thanks to the hon. Member for Selby and Ainsty (Nigel Adams) for securing this important debate, which is both necessary and timely. It is all the more timely for us to be discussing this issue now, when the country has voted to leave the European Union, as so much of the regulatory framework is currently set by the EU. I would be interested to know the Minister’s thoughts about that.
First, I declare my interest as a former member of the Musicians’ Union, which donated £6,000 to my campaign during the general election. I also recently visited part of YouTube’s UK operation, and part of Google’s massive UK operation, as part of a parliamentary visit last week to the creative industries that was organised by the Industry and Parliament Trust and the Advertising Association. I can report that Google does a good sandwich lunch and presented me with a very nice notebook. I can also report that it was from a YouTube channel “The Oma Way” that I learnt to do continental knitting from a German grandmother. As a former musician myself, I am very pleased that so many music lovers enjoy the ability to listen to music from the internet. I am also married to a musician and am close friends with a composer and other musicians.
Most importantly, Bristol West and Bristol generally is a very creative city, as my hon. Friend the Member for Bristol East (Kerry McCarthy) said. Many people work in my constituency in the creative industries. Musicians, composers and music lovers in Bristol West deserve and want a fair system for online remuneration—one in which musicians have much more control. So do I: that is why I am here, and I will be reviewing a couple of technical aspects of this knotty problem.
The situation with artists’ remuneration online is very far from straightforward, although there are those who would like it to be seen as so. There are many stakeholders in the process, each of whom would like to be seen as innocent angels, because it is not only Google who aims not to be evil. However, there needs to be a balance of rights and responsibilities that is proportionate to the power held by each stakeholder. Google, as the world’s No. 1 search engine, and YouTube, the dominant player in online video, both have far more power in this process than the consumer or the musician. The recording industry also has more power than the newest indie band or individual composer.
Within that process, there are search engines, file downloading sites, the recording industry, musicians, technical professions and, of course, the music lover. We owe it to everyone in that process to have a system that is not only transparent and fair, but relevant for our times.
Right now it is vital that the entire sector and Parliament are aware of what the results of the UK exit from the European Union will mean for the industry. The copyright directive, for example, which harmonises—to use an appropriately musical term—copyright law across Europe, including the application of copyright and control techniques on the internet, restricts the range of defences to copyright infringement. We do not yet know whether that area of UK law, directly derived from the EU directive, will be one of the pieces of so-called “red tape” that those who have campaigned for us to leave the EU will want to sweep away. Before I move away from Brexit, I would add that that would be a disaster for the UK’s music industry. I would like to know what the Minister, who I know is a music lover, is going to do to protect the industry during the Brexit process.
It is not sufficient for the more powerful players to say, “We are just providing the platform,” or, “We are only running our algorithm to give search results to consumers.” If the less powerful players, such as the musicians or trade unions or the recording industry, can easily find examples of unlicensed products on a streaming platform or in the results of an online search, so too can the search engines and the companies owning the streaming platform. They are the ones who are most in control of how the music is consumed and the options for performers and the recording industry to receive their fair share of advertising or subscription income, and they must be required to play fairly.
YouTube, for example, reports proudly that
“the rights holder has total control over what happens to their content on YouTube”.
That is simply not how performers experience it. As YouTube hosts user-generated content, it is the users generating the content and, jointly, the platform itself that have the most control. If an artist or recording company wishes to get their content blocked or monetised, they first have to know that it is there and then they have to contact YouTube to ask for it to be taken down or monetised. They can, and do, do regular searches of their name on YouTube or other streaming platforms, but if they can, so can YouTube.
YouTube has indeed invested $60 million to build a fingerprinting technology called Content ID to allow rights holders to identify when their works are used in the user-generated content. That technology has helped to compare millions of media files and hours of video, but it is insufficient for the job and is still leaving the responsibility with the performer and the recording industry to take action once they discover that there is unlicensed product on the platform.
YouTube now represents such a large proportion of total music consumption. That is great, but as a consumer of YouTube, I want to know that every single piece of music consumption is providing proper remuneration for the artists who create it and for the recording industry that provides the means to record it. I do not have that certainty, despite being involved in and modestly knowledgeable about the music industry and being modestly well briefed. Despite the phenomenal growth in online streaming of music content, YouTube contributes only about 4% of total music revenues—less than that contributed by vinyl, as my hon. Friend said.
YouTube makes use of a safe harbour provision in copyright law, as has been said, which allows it immunity from copyright liability providing it responds to takedown notices. However, that still places the responsibility away from the company itself and is therefore insufficient. I would like to see host companies such as YouTube and others take full responsibility without being able to hide behind the safe harbour provision, which was created 15 or so years ago, without any idea of how widespread music content uploading would become. I would also like them to move from a system of “notice to take down” to one of “notice to take and stay down”. Otherwise, the music industry continually has to play whack-a-mole, as new user-generated music content is uploaded.
Google is the world’s most used search engine. That presents another challenge: for Google to take responsibility for the results of its search engine, which routinely directs consumers to links to unlicensed sites. The British Phonographic Industry has sent more than 200 million notices to Google requesting it to remove illegal links to their members’ music. Again, that still places responsibility on the industry. Rights holders can supply machine- readable lists of sites that have been licensed to offer their content, so search engines could use those as a factor in their algorithms to improve the search visibility of sources of legal content. So far they do not. As my hon. Friend mentioned, the BPI can show how routinely search inquiries are returning links to illegal sites, on the first page, at the top. This matters: it is simply helping people—nay, positively directing them—to sites where performers’ music is stolen from them without proper payment.
Google employs very smart people, as I saw last week on my visit. I simply do not believe they are incapable of reforming their search engine algorithm. We would not tolerate a billboard that directed people to buy music from a shop that was using only stolen CDs, nor would we tolerate a radio station or TV company advertising such a shop. The time has come to require search engines to act responsibly, and I would be grateful if the Minister responded to that request.
As has been mentioned, the Musicians’ Union and the BPI both acknowledge that the development of online streaming has been a phenomenal success. For music lovers, it gives them access to an enormous catalogue of music. That is fantastic, but it is arguable that online streaming is equivalent to listening to the radio. Consumers do not possess that music and they know it. They cannot listen to it offline and the experience is more like a broadcast with curated playlists than iTunes or any of the download services. That suggests that the system of royalties for internet streaming should be closer to that for radio. I therefore support what my hon. Friend said about an equitable split of income—I think she may have said a 50:50 split—between musicians and the recording industry for online streaming, as well as an adequate “take and stay down” notice system for the online industry.
The equitable remuneration right was introduced in 1996 and ensures that performers enjoy royalty payments from the very first radio airplay of their recordings. Such a system also needs to exist for streaming. I believe it is both vital and possible to create a system whereby nobody in the process, from consumer to website owner, can hide behind the defence of “I did not know”, “I don’t believe the illegal sites are treating artists unfairly”, or “It’s not my problem: the way the artists are remunerated is up to the recording industry and nothing to do with us, the online industry”.
To sum up, I would like to know whether the Minister supports any or all of the following or whether he will consider them: a move from “notice and take down” to “notice and stay down” for notifying streaming services about unlicensed content; a shift in responsibility from the music industry to spot and notify search/streaming services to the services themselves, so that they take responsibility for what user-generated content is uploaded; a requirement for internet search engines to amend their algorithms to direct consumers to legal sites, not illegal sites, and also to co-operate fully with the music industry on this; and moving the licensing system to remunerate artists and composers fairly with the recording industry for online streaming, given that it is akin to radio in the user experience.
Reforming the licensing laws in any case for offline and online use and consumption may be a good idea, given that they are often seen as not simple to navigate and not transparent. I would be interested to hear the Minister’s thoughts on that point. Finally, we need to see that the music industry is protected throughout the process of leaving the European Union. The music industry deserves better than the situation we have at the moment for artists’ remuneration. Musicians deserve better; composers deserve better; above all, music lovers deserve better.
I just want to make a small contribution to the debate. I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on presenting the case here in Westminster Hall and I am sorry I was not here at the beginning of the debate; I had another engagement at 9 o’clock and it went on a wee bit longer than I thought it was going to. However, I am adding this small contribution to support what he and other hon. Members have said.
According to the chief executive officer of Sony, streaming services such as Spotify are the “final destination” for the music industry, if it is to survive. Some artists are vehemently against Spotify and the like, but the reality is that, if they do not move with the times—this is the point that I tried to make in my intervention—they will be left behind. There are some concerns about that. I am not saying that we must accept the inevitability of everything in this world, swallow hard and move on, but sometimes the hard facts are in front of us and we have to look at them.
Global music sales slipped by some 0.4% in 2014 to £15 billion. The industry body, the International Federation of the Phonographic Industry, reports that download sales, largely through Apple’s iTunes, slumped by 8%, which shows that there have been changes in the industry and to how music is delivered. Total digital revenues rose by some 6.9% to £6.9 billion, with streaming services such as Spotify and Deezer increasing by 39% and delivering £1.6 billion of revenues.
Artists who are unhappy with the development of digital streaming services will have to accept the reality sooner or later. They must—and I say this with great respect—get into the tent and influence their relationship with streaming services, rather than having no input from a position of protest. If the emerging streaming services become over-regulated, as the Financial Times said,
“It is just as likely that consumers would sate their appetites for free content by returning to piracy instead”.
The purpose of this debate—as it often is in Westminster Hall—is to get a balance and to see whether we can find a way forward. It is about solutions and not about negativity. Government statistics show that 26% of users have accessed content illegally. Those are the facts. It must be unbelievably easy to do so and it suggests that the Financial Times’ prophecy would be fulfilled should those in the music industry, and in the new media and streaming services, fail to strike the right balance and find the right way forward.
It is only right that all people are compensated for their labour. Even the richest of artists deserve to have intellectual property and copyright rights respected under the law. It is important to strike the balance, for there is much to lose for either side if they fail to do so.
I had not intended to make a speech, but the debate has been so stimulating that I have awoken and got to my feet. I just want to make a few general points because I have not prepared any remarks.
Like my hon. Friend the Member for Bristol West (Thangam Debbonaire), I have been doing some activities with the Industry and Parliament Trust, which is an excellent body that allows parliamentarians to get a more in-depth knowledge of business. In my case, that has been in relation to the music industry. Over the past 18 months or so, I have been visiting all sorts of different businesses and aspects of the music industry from collection societies right through to record companies and small, independent songwriters and producers. I have had the opportunity to see all the different aspects of the music industry, as many different industries are involved in the production of music, which is a fascinating eco-structure.
Having observed lots of different aspects of the music industry over the past couple of years, it is pretty clear to me that there is a trend towards streaming; it is the main way in which consumers listen to music now and it will be into the future. That has implications for the way in which artists are remunerated.
Despite what hon. Members have said about CDs disappearing and so on, a surprising trend in the music industry has been the growth of the compilation CD, which has gone against the trend of declining CD sales in recent years as people want somebody to curate the vast amount of music that is placed in front of them on their behalf. People purchase compilation CDs because that curation is done for them. Those consumers are, generally, of a certain age but, nevertheless, that has been a surprising area of growth reported by some record companies.
There will always be a demand for physical formats of music. The growth of vinyl sales in recent years is an indication that people are hankering after something real, physical and tangible—with a gatefold sleeve and a wonderfully high-quality vinyl record—that they can tuck under their arm and carry down the road before going through the wonderful ritual of putting it on to their turntable and playing at home.
The growth in vinyl sales is not just among people like me who are rebuying all the albums that they gave away when they thought vinyl was disappearing 20 or 30 years ago, rebuilding their record collections and buying new music. It is also among young people. When I go into real, independent record stores such as Spillers Records in Cardiff—the world’s oldest record store and one of the finest establishments in the country—young people are at the head of the queue to buy vinyl. That physical format will remain because there will always be people for whom music is their ultimate passion and is much more than the wallpaper of their life. Music is actually tied into their identity as human beings in a powerful way.
Will my hon. Friend give way?
I will in a moment but I am just getting worked up.
There will always be a minority of consumers who fall into that category, but there are millions of other people for whom music forms less of an obsession but is, nevertheless, an essential part of their life, even if they are not as obsessed as some of us.
I agree very strongly about CDs and vinyl. Does my hon. Friend agree that, as CDs are a physical form of music, sleeve notes, artwork and all sorts of other things add to the enjoyment of that music? It is not just about the sound through a set of headphones.
Yes, I agree, but the point that I was about to make is that there are many millions of consumers for whom that is less important than it might be for my hon. Friend and I, who pore over such things. I am sure that he can remember, as I can, who played bass or slide guitar on which track, the exact length of each track, and who wrote the lyrics and the music—all the details that we store up.
The consumer model that is emerging is that the consumption of music will become part of most people’s general consumption of creative content, which will include film, music, television programmes and so on. We are moving into a world where people can consume creative content of whatever variety any time, any place, anywhere. That will work as a general subscription model in which most general consumers will pay for their internet, television and music all wrapped up into one family package. People already do that with their broadband, television services and telephone services. It is sometimes a bit of a stretch for consumers to go from nought to £10 but it is less of a stretch—although times are tough—for some illogical human reason, to go from £60 to £70 when they are paying into a subscription service. The Government, in their policy development, need to think through the implications of that trend.
We need the right copyright structure, legal structure and penalties, where they are required, to ensure that the people who make creative content are appropriately rewarded, whether it is from physical sales—which will continue to be an important part of revenue to the industry—or when their work is part of a more general subscription service. We must deal with the illegal content and the legal loopholes such as safe harbour that allow content to be consumed online without creators getting the appropriate reward. The Minister is a thoughtful person and I hope that he has something to say about how the Government see a way forward.
It is a real pleasure to serve under your chairmanship, Mr Gray, so long as you promise never to do those Scottish accents. I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on securing this important, though short, debate. I commend him for his diligence in chairing the all-party parliamentary group on music. I have an interest as a former recording artist, and I refer to my entry in the Register of Members’ Financial Interests.
In my 15 years as a Member of Parliament, I have had the great pleasure of speaking in most debates on issues related to the creative industries and the remuneration of artists. I have a sneaking suspicion that, in the future, I will be standing here once again to discuss the same issues and challenges that we have heard so eloquently described by Members on both sides of the Chamber this morning. At the heart of the matter is how we ensure that our artists and creators, and those who are prepared to invest in their talent and creativity, are properly rewarded for the fantastic works they produce. Rights holders and investors should be properly rewarded for all their commitment.
The hon. Gentleman mentioned the success of our industry—we have always been world leaders in music. Our incredible success over the past few years is testament to the array of talent across the United Kingdom not only in music but in all our world-leading creative and cultural sectors. As legislators, it is our job to continue to create the best political environment to allow that talent and creativity to grow, thrive and develop. We cannot be the artists, although the hon. Member for Cardiff West (Kevin Brennan) and I attempt it on occasion with the world-renowned MP4. Our main job is to ensure that we do nothing that disrupts the wonderful creation of talent. More than that, we must see what we can do to create the best possible environment and conditions for talent to develop, grow and prosper. We must also ensure that this country remains one of the top exporters of music worldwide, as we have done pretty successfully over the past few years and decades.
I remember securing one of the House’s first debates on the music industry, and at that point it was all about piracy and digitisation. Music was just about the first discipline to get involved in the tensions and difficulties of the move towards digitisation. We were the first creative sector to do so, and we blazed a trail for others. We challenged some of the things that were happening. In the early days of digitisation and the move online, a culture started to emerge that suggested that, because the internet was out there, everything should therefore be free and accessible. Political parties were created to foster that belief. Pirate politicians were elected in several European nations to serve and fulfil that strong political culture. All that was happening, and the music industry tried to find a way through and had to meet many difficulties and challenges as the first creative industry in that environment.
Over the years, music has been relatively successful in meeting some of the online challenges. Piracy is not the major issue, although it is still a big issue—I welcome some of the measures in the Digital Economy Bill, which will treat theft online in the same way as theft of physical products from a shop or supermarket. We have fired a shot across the bow of the good ship pirate over the past few years, and we are making steady progress. I congratulate successive Governments on their vigorous attention, and the availability of streaming services and safe harbours is a real attempt to address some of the illegal activity.
Even with that progress, artists, creators and rights holders still struggle to secure a just reward for their efforts. The hon. Member for Strangford (Jim Shannon) and others have mentioned that streaming has been a massive success. I am a massive user of Spotify, and I like the way that I am able to access music, as do millions of people across the country who buy into the service, which allows us to listen to music in the way we want. There are all sorts of playlists, and the service is designed to be attractive to users. Such services have been successful, but we must secure a properly functioning digital market that enables creators and rights holders in the music industry to secure the true value of their works online. One of the most important things that we have to do is to address what can only be described as the value gap between rising music consumption and decreasing revenues, which both undermines the rights and revenues of those who create and invest in their own music and distorts the marketplace.
Someone is growing rich off the fat of the creative endeavours of our musicians and artists, and I assure the House that it is not the artists. Somebody is massively profiting from the proliferation of music, and we owe it to ourselves to examine what is happening. I suggest that those who seem to be making the tidiest of profits are the platforms and hosts. Such companies add next to nothing to this country’s creative activity but somehow, because of their design, their algorithms, their marketing and their ability to provide access to this content, they seem to be making the largest profits.
Whenever I highlight the extent to which musicians rely on the income from their work, someone always answers, “Well, they can make money from touring and merchandise.” The big artists can do that, because the people who go to their concerts are prepared to pay vast amounts of money—such artists attract people who have the income to buy the T-shirts—but most bands cannot survive on touring and merchandise alone.
The hon. Lady is right. Making records and producing albums seems to be a loss leader for all the other activity that musicians are now expected and ordered to do to try to ensure that they are able to make a living from music. She has seen the figures from the Musicians’ Union that suggest just how depressed is the average musician’s income. I cannot remember the figure, but I am sure she knows better than I do that it is significantly low. That is a real issue for so many struggling artists. I am an unrecouped artist. I sold about 1 million records, but I have never received a penny for any of the records I sold when I was signed to a major record label. There was an expectation that we would make money from all this other activity. I concede that we did relatively well, but we did not do well from record sales. There is something incredibly wrong with the marketplace.
Streaming might be an opportunity for us to consider how we properly reward musicians for the works they produce. I am attracted to the 50:50 concept of the Musicians’ Union. Let us work towards recouping the investment that rights holders and record companies make in the artists, but let the artists start to earn a little from streaming services. Artists earn an absolute pittance from streaming services, and we should at least allow them to make that pittance a little more substantial.
The hon. Gentleman is making some excellent points. Does he agree that the online industry’s domination of the income—it is keeping so much of the income and allowing the artists so very little—is equivalent to the person driving the van full of CDs having most of the income and the artists having very little? The online platforms are the vehicle. They are the last bit of the process between creation and consumption. Does he agree that it would be better if we tipped the balance back towards the creators, without whom the industry as a whole would be nothing? We need creative people and the creative industries that support them in getting their output recorded.
There is very little on which I would disagree with the hon. Lady. We must restructure that relationship, but I caution her and others. The music industry in this country has a successful business model, and we are world leaders. We produce the artists and ensure that they are supported. I have nothing against record labels and the music industry investing in that talent and bringing it on in the usual paternalistic way. That is what happened when I was a recording artist, and the model is still successful. Rights holders should be properly rewarded for their investment in artists.
That brings me to my next point, which is probably the most substantial point in all this. Several Members today have raised the issue of safe harbour, which we have to tackle; of all the things that the Minister takes away from today’s debate, I hope that it will be that one. Safe harbour is a useful innovation, because it has encouraged a number of people who were tempted by piracy and illegal sites to come across to a legal framework where they are able to access some of the content.
The music industry’s suggestion of distinguishing between active and passive safe harbours is a useful one. We all know what a passive safe harbour looks like: that is where people find a store of music, access it and do all the usual things. But when it comes to the manipulation of that music and to designing things in a particular way to try to create some sort of income for it, we get into the realm of an active safe harbour. At that point, royalties should be paid, to ensure that something comes back to rights holders and artists. I very much support copyright being extended to what could be considered as active safe harbours.
I am also attracted to the idea that streaming sites should be treated pretty much as a radio player—we heard about that from the hon. Members for Bristol East (Kerry McCarthy) and for Bristol West (Thangam Debbonaire), and it is a feature that we should be looking at. When I access Spotify, for example, I mainly use the radio services. I still do not see a distinction between listening to the radio in the morning and listening to the radio service on Spotify—I think they should be treated the same.
I am conscious of time and am obviously very keen to hear from the Minister, but I have a couple of things to say about where we find ourselves after the decision we made a couple of weeks ago about the European Union. The fact that we will not have access to the European Union is an absolute and unmitigated disaster for the musicians of this country. We will now be excluded from most of the debates about the digital single market, which is one of the biggest innovations in the placing of content online that we have ever seen in any part of the world. We have now taken ourselves out of that conversation about the structuring of the digital single market. That is a disaster for musicians in this country. I am not going to mince my words about this.
Another issue related to remuneration for artists that we will have to consider carefully is free movement of people in the music sector. One of the great innovations in the music industry in London is that we can draw in so many creative people who have so much to offer our industry—
Order. I am reluctant to interrupt the hon. Gentleman, especially using my English rather than Scottish tones, but he really must restrict his remarks to the topic under discussion today, which is remuneration for musicians for online services, rather than the wider issue of the effects of Brexit on the music industry.
I am grateful for your comments, Mr Gray. I will restrain myself, but we have to acknowledge that at the heart of this there are significant issues and challenges for the remuneration of musicians because of the decision taken. The hon. Member for Bristol East mentioned the right to equitable remuneration. A huge conversation is going on in the European Union to ensure that that is progressed and, again, we are now denied access to that conversation. There are massive issues when it comes to online remuneration of artists. The massive challenge incumbent on the Minister is to see how we design things so that our musicians do not lose out in the online environment, given that we are now in a very difficult set of circumstances for the way our musicians operate.
I finish by reiterating that this issue is really important. Our job—our main function—is to ensure that we set the best parameters in an environment for our musicians to develop and thrive. We have a fantastic product and resource in this country: some of the finest musicians in the world. We have enriched the souls of populations throughout the world with the wonderful works our artists produce and we have to ensure that we do nothing to further disrupt their ability to make that wonderful music. I appeal to the Minister to look at where we are, to ensure we make the right decisions on behalf of our artists and to consider the strong points made by hon. Members today.
I call Kelvin Hopkins.
It is a great pleasure to serve under your chairmanship, Mr Gray—it is a great pleasure to serve opposite the Minister as well.
I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on securing this important debate and on his eloquent and well argued speech. I also congratulate all the other Members who have spoken on their eloquence and their erudition, which is rather more impressive than my own in this matter.
This area is clearly one in which further Government action is required to ensure that musicians, singers, songwriters, composers and producers receive their just financial reward—payment commensurate with their talents, creativity, hard work, popularity and need to make a decent living and receive appropriate rewards. As a former part-time jazz musician and a member of the Musicians’ Union in my youth, I have some acquaintance with the music industry, although I never had to depend on playing music for a living—unlike at least two hon. Members present, who have been professional musicians and to whom I greatly defer. For 15 years I was a board member of the National Youth Jazz Orchestra and I am now an honorary member of that organisation, so I have a background in and current contact with music, although I have to say that popular music is not one of my areas of expertise.
As it happens, in my first Adjournment debate in this Chamber some 18 years ago, I called for better financial support for jazz from the Arts Council and the state sector in general. Many jazz musicians have always struggled to make a living from their music, despite their brilliance and their passionate and dedicated supporters and listeners. The audience for jazz is similar in size to that for opera, but the support it gets is a tiny fraction of that for opera—although I am an opera lover as well and do not want to see opera deprived of funding in any way. Famously, the great Ronnie Scott subsidised his jazz earnings by playing tenor saxophone on the hit recordings of Tommy Steele in the 1950s and ’60s. Many other jazz musicians were also session musicians to sustain their primary artistic concerns.
Downloading and streaming were unimaginable in my youth. The music world is now infinitely more complex, with sophisticated techniques necessary to ensure that artists are properly paid and not simply exploited by the online industries. That is a particular problem for Britain and British artists, because of the sheer volume of brilliant music and musicians of all kinds that this country produces. In classical music we are one of the greatest of musical nations; in jazz we are second only to its original birthplace, the US; and in popular music we have had a dominant position in the world since at least the 1960s. It is therefore right that we take the problems raised by the hon. Member for Selby and Ainsty and other speakers in this debate with the utmost seriousness.
As we have heard, the BPI, the Musicians’ Union and others, as well as some of our greatest artists, have made a number of proposals for the Government to include in the Digital Economy Bill. The sums of money made by Spotify, YouTube and others are huge, and far too little of that goes to the artists in the music industry. New legislation is absolutely vital to ensure that that happens. Securing proper payment has always been a problem for musicians and those in the music industry. Much music and many musicians through the ages have depended on subsidy and sponsorship from the rich, from rulers, from the Church and more recently from the state. We now have a sector that is commercially viable—modern popular music—but it, too, needs state protection to ensure that the industry’s musicians, singers, writers and producers receive their just rewards. The Government must act to make that happen.
It is a great pleasure to serve under your chairmanship, Mr Gray; it feels like normal service has been resumed. I thank the hon. Member for Selby and Ainsty (Nigel Adams) for securing this important debate. I saw him briefly on the television as the Tory leadership campaign got under way, and he looked a bit like a special branch officer as he held open the door for one of the candidates getting into their armoured vehicle. But he has now returned to normal service, campaigning for the rights of artists as he has done since he became a Member.
The quality of the debate has been second to none, with fantastic contributions from the hon. Member for Bristol East (Kerry McCarthy), my hon. Friend the Member for Somerton and Frome (David Warburton), the hon. Members for Bristol West (Thangam Debbonaire), for Strangford (Jim Shannon), for Cardiff West (Kevin Brennan) and for Perth and North Perthshire (Pete Wishart), and of course the hon. Member for Luton North (Kelvin Hopkins), whom I have to formally welcome as the official Labour party spokesman on cultural matters. I gave my maiden speech just after he had spoken, so there will be a wonderful symmetry if I give my final remarks as a Minister with him sitting opposite me, before I get fired by the new Prime Minister in the coming fortnight. That would be a lovely bookend to my comet-like parliamentary career.
The Minister is being modest. He stands to be promoted, rather than sacked.
It is invidious of me to single out individual contributions, but I particularly welcome the contribution of the hon. Member for Bristol West. I did not get the chance to have debates with her while she was briefly the Opposition culture spokesman, but I thank her for her kind remarks about me in one of her speeches when she held that role. In that speech she showed what a huge contribution she would have made to debates on culture as a Front-Bench spokesman, and definitely will make as a Member of this House.
I do not want to be snarky, but I noticed that the spokesman for the official Opposition spoke for around four minutes, whereas the Scottish National party spokesman spoke for 15 minutes. Perhaps we are seeing the shifting sands in the SNP campaign to become the official Opposition, although sometimes brevity is the soul of wit. Before I am ruled out of order, Mr Gray—
You are close.
Let me get on to the subject in hand.
This is an important debate about a very successful industry. It is important for us to recall just how successful the British music industry is. For example, in 2015, one in six albums purchased around the globe were by British artists. We are the second-largest source of repertoire in the US and one of the biggest music markets in the world, alongside the US, Japan and Germany. Last year, Adele once again released the world’s best-selling album. Interestingly, that was the eighth time in 11 years that the global bestseller has come from the UK. Indeed, five of the world’s top 10 best-selling albums in 2015 were by British artists.
As hon. Members noted during the debate—particularly my hon. Friend the Member for Somerton and Frome, who took us right back to the beginning of music streaming—the digital technology revolution in consumer behaviour, which is disrupting almost everything at varying speeds, has of course disrupted the traditional model for distributing music. In the decade or so that I have covered this brief, both as an Opposition spokesman and as a Minister, I have seen that change take place. Indeed, when I first became a Minister, we inherited the last Labour Government’s proposals to tackle piracy, which involved sending notices to individuals who were breaching copyright. At the time, I was sceptical about how effective that would be.
I do not want to prejudge matters, but I think the strategy we adopted has, to a certain extent, been successful. There has to be a combination of carrot and stick. We were successful—this is actually thanks to the music industry—in using existing fraud legislation in the courts to ensure that the most egregious pirate sites were blocked. Interestingly, because that was existing legislation, it did not provoke the kind of controversy that surrounds almost any attempt to “regulate the internet”. When such a measure was proposed in the United States, it resulted in a lively campaign, with people claiming that it would mean censoring the internet. Why anyone would accuse people who want to take down illegal content of censoring the internet is beyond me, but people somehow feel it is a legitimate point to make.
Alongside using legislation to block websites, the carrot, as it were, has been the rise of legal music services. I was particularly pleased to see the report issued yesterday by the Intellectual Property Office, which showed that the establishment of well-known music streaming services such as Spotify has helped to shift more people towards using legal sites. It is clear from reading the IPO report that we are not nearly out of the woods yet in terms of illegal downloading and listening, with some 7 million people in the UK apparently still accessing illegal content, but it is good that music streaming services have become more mainstream, even to the extent that I now use such a service. Some progress has been made.
Before Baroness Lucy Neville-Rolfe took over the intellectual property portfolio with such enthusiasm, I regularly held round-tables with Google and many others in the industry to discuss how they would help reduce access to illegal sites, with particular attention paid to searches that threw up such sites. I am pleased to say that the Minister in the other House has continued those round-tables. I have a huge degree of sympathy with those who say that Google could and should do more. Indeed, when it came to images of child sexual abuse, we were able to work with Google to ensure that something like 130,000 different search terms would result in a blank search return, so it is clear that Google can do work on its algorithm.
The Google argument is twofold. First, an image of child sexual abuse is clearly illegal and criminal, so Google feels it can act without the intervention of the courts. Secondly, Google likes to say that for material that infringes copyright there can sometimes be a grey area. Nevertheless, there is no doubt that it can do more. It has claimed that it has changed its algorithm, but any of us who go on Google every so often and type in the name of an artist to see what emerges will still see a list of illegal content websites coming up in the results. Google does work with some of the trade associations to ensure that links to illegal sites are taken down. As the hon. Member for Bristol West pointed out, the debate is shifting and Google is starting to take a more proactive attitude on such issues, in partnership with the music industry and artists.
We have also worked with the advertising industry. People put up websites with illegal content not as an act of altruism—if one can call it that when they are stealing somebody else’s property and giving it away—but to make money. We should not forget that. One way the people who run such sites make money is by having advertising on their websites, so we have worked closely with the UK advertising industry to ensure that legitimate advertisers do not see their advertising put on such websites. We lead the world in taking such action.
Before I address some of the substantial issues that have been raised, I should mention the Digital Economy Bill, which recognises the importance of tackling online infringement. We have extended the penalties for online infringement to match the penalties for physical infringement, as the hon. Member for Perth and North Perthshire mentioned, and the Bill will give us a chance to debate many of these issues again. I look forward to some of the brilliant contributions we have heard today being echoed in that debate. In congratulating hon. Members on their contributions earlier, I should have said how impressed I am by how many active musicians there currently are in the House.
On the issue of platforms, when we talk about safe harbour we are referring to the situation that has traditionally existed for the past 15 years. Intermediaries such as YouTube claim that they are passive recipients of content and that it is not necessarily their responsibility to police that content, although they claim that they do so voluntarily but do not have the resources to ensure that such content is not online. They claim simply to be a platform on which people can put their content.
As the hon. Member for Cardiff West said, the safe harbour legislation was introduced to encourage innovation. In many respects, it has been successful. When we debate these issues and look at the negatives, we should also remember the positives. A lot of platforms, and indeed the internet as a whole, have given an extraordinary opportunity to many artists who would potentially have remained undiscovered without them. Before the existence of the internet such artists had only one door to a successful career in the music industry, which was through the record labels. The internet has widened opportunities for artists as well as causing them considerable problems.
Obviously, what sits behind the idea of safe harbour is the e-commerce directive, but that is now quite legitimately a subject for debate, and it is perfectly appropriate for rights holders to argue that the hosting defence is being abused to allow copyright-infringing content to be hosted indiscriminately without their being remunerated. That is why the hosting defence creates a value gap, as it benefits intermediaries without compensating rights holders. The hosting defence also leads to a mismatch in negotiations, giving the whip hand to intermediaries rather than to artists themselves. There are also concerns about the different types of streaming business models, and about whether they provide the correct levels of remuneration to rights holders.
As a Government, we believe that businesses must act in a socially responsible manner. That applies to platforms, which should co-operate in the removal of copyright-infringing material without harming freedom of expression. However, as I said earlier, we must also recognise the role that platforms play in driving innovation.
Too often we have heard Ministers just exhorting people to behave well. Is the reality not that we need strict, firm, strong regulation to make sure that things happen, so that we do not just have to rely yet again on warm words to help musicians when what they really need is legislation to protect them?
The hon. Gentleman makes a fair point. Many hon. Members have asked what the position on the copyright framework will be going forward, given that as a member of the European Union we have sat within the EU copyright framework. They will know that the situation is currently being considered to ensure that the right balance is struck between providing the right incentives and having the right protections.
The European Commission is considering reform in this area as part of the digital single market package. Clearly, circumstances have changed in the last fortnight. The UK was a leading voice in the debate on the future of the digital single market, and the Government and individual Ministers have built strong relationships with the Commission and with leading nations such as France and Germany, which obviously also have strong voices in this debate.
It is my personal view that we will continue to have some influence on how things develop, because this is a very public debate and the UK, along with a number of other countries, submitted a letter a few weeks ago to make the point about platform regulation. We argued first that not all platforms are the same, so we cannot simply have one-size-fits-all regulation, and secondly that we must ensure that we do not throw out innovation. I have said consistently to the commissioners that the UK Government welcome a debate on platform regulation. We are not saying that the Commission should not examine the issue; at this stage, we are simply raising some of the concerns that exist.
People have suggested that we may be trying to use France and Germany as a proxy for our influence, to achieve our requirements in the digital single market. Is there any truth in that suggestion? If there is, is that not evidence of how we are being further reduced and diminished in our relationship with Europe, such that we expect others to do our bidding on our behalf?
I call the Minister to speak with reference to the subject under debate.
I am sorry if I gave that impression; that was not the point I was trying to make at all. The point I was trying to make was that countries such as France and Germany clearly have very strong views on the issue, and their voices are heard. The situation pre-Brexit was that the UK, France and Germany had slightly different positions on some of these issues but were all influential voices, and I was engaging quite closely with both the French Government and the German Government about their attitude, as well as with the Commission.
It is my intention, particularly as we remain a member of the European Union for the foreseeable future, that the British voice—the voice of British artists and the voice of the British music industry—is heard in future negotiations. At the moment, however, we are at a relatively early stage when it comes to formulating principles and identifying issues.
I appreciate what the Minister is saying, but Britain’s interests in this area are far greater than those of the other nations he mentioned. We need to have national legislation that is at least as strong, if not much stronger, than what the EU proposes. Does he have any idea of the sheer volume of our interest in popular music compared with that of France and Germany? I would guess that the popular music industries in those countries are much, much smaller than ours.
I accept that the British music industry is probably bigger than the music industries in France and Germany given the profile of British artists. However, a company such as the French firm Vivendi, which owns Universal, is a pretty big music company. I do not know what impact Brexit will have, but at the moment the projections are that we will overtake Germany in the overall value of our entertainment market. Nevertheless, the German market is currently bigger than the British one, and no one needs any lessons about how seriously the French take their own cultural offer and the work they will do to ensure that it is protected.
What I am really saying to the hon. Member for Perth and North Perthshire is that I see a partnership developing between France, Germany and the UK, in which we look for areas of agreement. However, I hope that at the heart of that partnership there will be an emphasis on protecting remuneration for artists and achieving a fair balance between the innovation that platforms have brought to the distribution of music, for example, and some of the issues that have been thrown up by trade bodies in particular. For example, it has been pointed out that the number of music videos on YouTube has doubled, yet the revenue for artists and labels has flatlined.
It is also important to remember that there are different emphases within the music industry itself. Clearly, the BPI does a fantastic job in representing the music industry and talking about issues such as safe harbour and copyright infringement, but of course the Featured Artists Coalition, the artists’ organisation that is so ably led by people such as the brilliant musician Sandie Shaw, has its own proposals that we need to consider properly and seriously, for example about transparency in the value chain.
I want to talk briefly about the relationship between creators, their producers and the publishers, because that relationship is absolutely vital in helping creators bring their product to market. Nevertheless, as we have already heard from some hon. Members, there is a fear that authors and performers are missing out as a result of restrictive, imbalanced or opaque terms and practices. We take such issues seriously. We want to understand how we can make progress and what the impact of certain reforms might be in different sectors and scenarios. We want to ensure that there is a balance; we want creators and performers to receive fair remuneration, but we also want investment in innovation and resources.
Any proposals that would result in restrictions on freedom of contract would need to be subject to rigorous examination. Transparency is an important feature of well functioning markets, and I know that creators would welcome moves to make it easier for them to understand the value that their works have generated. Again, there is an opportunity for partnership in that regard. For example, I welcome the BPI’s introduction of a portal that allows an artist to measure the remuneration they are receiving from streaming services.
I have covered a lot of ground, and this has been a great debate, but we should have the opportunity to hear again from my hon. Friend the Member for Selby and Ainsty about what progress he thinks has been made in the past hour and a half.
I thank the Minister for his remarks, and I also thank all colleagues who have contributed to this debate; it is great to see such cross-party agreement on this important subject.
As hon. Members can imagine, I have been contacted by quite a few people from within the industry about this debate, many of whom are artists. I will wrap up the debate by quoting a couple of people who have been in touch with me. First, I will quote a gentleman called Brian Message, who works in artist management. He says:
“The advent of the digital era introduced an opportunity for those involved in the music business to pull together for the economic benefit of all stakeholders. To our collective detriment, this did not come to pass.”
A songwriter, Rupert Hine, wrote to me to say:
“Put the world’s most ubiquitous search engine together with the world’s most ubiquitous noticeboard and you have created the one place on Planet Earth where you can view all the world’s Art and Culture for absolutely nothing. Great for the ‘Users’—but unsustainable for the ‘Creators’.
Artists are all but giving up. All the digital arts…are given away for free via Google’s YouTube. The world is not awash with Adeles and Coldplays or any fleeting product of broadcast talent shows. The world is full of artists trying to express themselves in a…way that moves us and makes us feel differently about the world and our place in it. For them, the meagre breadcrumbs collected from advertising revenue via YouTube is insulting—and more importantly unsustainable.”
Motion lapsed (Standing Order No. 10(6)).