Memorandum submitted by the Association
of Independent Music
ABOUT AIM AND
THE UK INDEPENDENT
RECORD SECTOR
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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