Select Committee on Culture, Media and Sport Written Evidence

Memorandum submitted by the Association of Independent Music


  AIM is the non-profit trade body established in 1998 by UK independent record labels to represent the independent record sector. This sector accounts for some 20% of the UK market with 2004 sales worth nearly £0.5 billion from mainstream retail alone. Overall this sector is worth around £650 million and its significance is underlined by comparison with the entire (subsidised) British film industry, which on a like-for-like basis that has a value of about £673 million.[11]

  AIM is recognised as the legitimate voice of the British independent music industry, representing 900 members from the smallest start-ups to substantial companies with turnovers in £millions, including the largest and most respected independents in the world. AIM promotes this exciting and diverse sector globally, leveraging the sector's collective power as a "fifth major" alongside the four record business multinationals: the work of this organisation enables its members to grow, grasp new opportunities and break into new markets.

  Independent sector artists have claimed the Mercury Music Prize for three years running and earned two-thirds of nominations in 2005, as well as scoring highly with 2005 Brit Award nominations and coming second only to the giant Universal Music Group as regards awards won—including the Best British Group accolade for Franz Ferdinand. This sector accounted for 30% of all silver, gold and platinum UK artist albums 2004, and for nine of the world's 20 most critically acclaimed albums in the same year.

  Among the thousands of UK independent-signed artists are Bjork, The Killers, Bloc Party, Stereophonics, The White Stripes, The Strokes, Basement Jaxx, The Prodigy, Paul Weller, Badly Drawn Boy, Pixies, Mylo, Antony & The Johnsons, Robert Plant, Nitin Sawnhey, Elbow, The Zutons, Babyshambles, Arctic Monkeys, Arcade Fire, Royksopp, Roots Manuva, Coldcut and M.I.A.

  As SMEs as well as creative entities AIM's member companies are interested in opening up revenue pathways offered by new media and the new digital distribution channels, and this organisation certainly supports the Government's commitment to modernise copyright and intellectual property so that they are appropriate to the digital age.

  Taking up some of the points specifically mentioned in the CMS Committee's call for evidence:

1.  The impact upon creative industries of recent and future developments in digital convergence and media technology

  Independent music companies have always been willing to welcome, to use and to maximise the opportunities which these developments offer. There is ample and continually-growing evidence of this in the ways that they individually use new media to creatively and to bring their artists and products to market. Several of AIM's members are online record labels, producing no manufactured product at all.

  Aligned with its members attitudes and aspirations, AIM has through its new media arm AIM Digital, agreed collective licensing deals with MSPs (online music service providers) Sony Connect, Yahoo, Musicnet, eMusic, Karma Download, Tunetribe and others, and remains the only organisation to have concluded deals with both old and new versions of Napster.

  So this music industry sector is actively seeking to ensure that the impact of new media and digital dissemination is a benefit wherever possible. However, AIM strongly contends that the commercial applications of digital convergence and media technology developments must be part of a properly licensed and regulated business environment, under Copyright legislation. The representatives of the British music small business economy want to see new media exercise supply chain responsibility online just as it must be exercised by operators in the offline business world.

  This means that commercial enterprises which make money from the dissemination of content online—the ISPs (internet service providers) which are an established and substantial link in that commercial process—must a proper source of revenue for the owners and creators of the recorded music copyrights which are shared and copied by the consumers of their services, thus creating revenue for the ISPs. It is not sensible that one link in any supply chain is absolved from paying a fair recompense or licence fee to those higher in that chain while earning profit from those lower in the chain for the use of intellectual property.

2.  The effects upon the various creative industries of unauthorised reproduction and dissemination of creative content, particularly using new technology; and what steps can or should be taken—using new technology, statutory protection or other means—to protect creators; and

3.  The extent to which a regulatory environment should be applied to creative content accessed using non-traditional media platforms

  AIM and its members take the view that in this context it is time for a fresh and innovative approach to "unauthorised reproduction and dissemination of creative content". Where this involves commercial activity of any kind, copyright protection must be strong and enforceable, within an efficient licensed environment—as indicated in the response to point 1.

  But it is time to look afresh at this issue where the consumer as a private individual is involved.

  AIM acknowledges the fact that the means of recorded music consumption in the digital age will force a change away from the traditional business model of asset ownership and retail sale initiated by the rights owner ("top down" model), and towards a user-led and consumption-based ("bottom up") business model. In that new transaction the music user should ideally pay for the use of copyright as part of the act of consumption.

  This points clearly to the need for creators and owners of copyright recorded music to step forward, from an age in which they have as a right controlled and/or denied access to their copyright content to an age in which they have right to remuneration in exchange for to liberalise the process for the consumer.

  AIM's member companies are primarily artist-orientated and want to give their artists every possible opportunity to reach national and international markets: using rather than refusing new technologies; encouraging broad and niche consumer access to new music; avoiding a punitive approach to copyright enforcement and realising that loss of some measure of copyright control is a factor in reaching new and enthusiastic music markets around the world—and believing that there can be a fresh approach to all these factors.

4.  Where should the balance lie between the rights of creators and the expectations of consumers in the context of the BBC's Creative Archive and other developments?

  While acknowledging the importance of this question, and the fact that strong opinions on it are held by some music business sectors, AIM for the moment will respond only very briefly and generally. The independents at present take the view that the Creative Archive is just one of many current approaches to giving the public access to music in the digital age. These are early days in the development of radical change to business models, public attitudes to copyright and reshaping of markets, as technology becomes increasingly sophisticated and accessible. AIM is considering these issues from all possible angles and will make its position known when that position is fully formed and agreed.

  In conclusion: From the perspective of the independent music sector the developments of new media and digital dissemination of content are new techologies which work, and in themselves are essentially neutral: the impact on copyright creators and owners and their businesses relates directly to how these technologies are used and regulated and how they integrate with the need for fair remuneration along the entire supply chain from creator to consumer.

  AIM stresses that the independent sector survives and thrives on creativity, innovation and ingenuity in developing artists and on applying the same approach to running very small businesses (although a few of these have over the years successfully become very large). Independents are primarily artist-orientated and want to give their artists every possible opportunity to reach national and international markets—using rather than refusing new technologies; encouraging broad and niche consumer access to new music; avoiding a punitive approach to copyright enforcement; knowing that Digital Rights Management Systems (DRM) cannot and will not offer a complete answer; realising that loss of some measure of copyright control is a factor in reaching new and enthusiastic music markets around the world—and believing that there can be a fresh approach to all these factors.

  AIM has commissioned research and presentation of considerably more detailed proposals on the principles and practicalities of these issues, within a full range of AIM proposals for an approach to copyright reform, and will shortly publish a full paper on this subject. This paper will be made available to the Chairman of this Select Committee.

11 April 2006

11   The value given here for the British film industry is based on information from the British Film Council relating to UK share of total box office ernings in 2004 and UK share of total volume of DVD and VHS retail sales and rentals (most up-to-date figures available being those for 2003). Back

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