Examination of Witnesses (Questions 59
- 79)
TUESDAY 16 MAY 2006
MR CHRISTIAN
AHLERT, MS
JILL JOHNSTONE,
MR DAVID
STOPPS AND
MS EMMA
PIKE
Chairman: Good morning, everybody. This
is the second session of our inquiry into new media and the creative
industries. I suspect that in both our sessions this morning we
will be concentrating on copyright issues, although not exclusively.
Can I welcome to the first part, Christian Ahlert of the Creative
Commons, Jill Johnstone of the National Consumer Council, David
Stopps of the Music Managers Forum and Emma Pike of the British
Music Rights. I am going to ask Philip Davies to commence proceedings.
Q59 Philip Davies: Copyright laws
were founded on two principles: one being the need for private
rights allowing creators and investors to earn a proper return;
and the other being the need for material to go into the public
domain once that return had been earned. Jill, I think the National
Consumer Council suggested that that regime was designed for the
analogue world and it was unfit for the challenges for the digital
world. I wonder if you could perhaps explain why you think that
and whether everyone else agrees with you or not?
Ms Johnstone: I think the principles
behind copyright legislation, ensuring a fair return to make sure
society benefits from creative inventions, is as important today
as it was at the beginning of copyright law. I think where the
lack of balance has come in is that the private rights part of
the public/private bargain has been extended and extended over
time to the extent now that we have an over-protection of rights
to the detriment of consumers and the public interest.
Q60 Philip Davies: Christian, would
you agree?
Mr Ahlert: Yes, I agree with Jill's
point but I would like to add something which I think you as a
committee should consider, because you make that basic equation
in between that creativity depends in some sense on copyright.
I have been an academic in this field for quite a while at Oxford
and have looked at many different studies, but there is not a
good study that shows that there is a clear link in between the
amount of creativity you have in a society and copyright per se.
What I think is interesting, and I also think what is not researched
very well at the moment, is the clear economic question of the
way the current copyright machine works.
Mr Stopps: Obviously copyright
is immensely important to the people we represent. We represent
performers and creators, the featured artists, you hear on the
radio and see on the television who are responsible for 95% of
the income in the music industry. We need to encourage creators
and performers. Britain has a fantastic history of producing amazing
talent, writers, actors, musicians, creators and performers. We
have a fantastic heritage. We should be encouraging that tradition.
We should be encouraging creators and performers and rewarding
them properly for their endeavours. They are an enormous asset
to our society. I am very much in favour of extending the term
of protection of sound recordings. I think it is far too short
at 50 years. When that came in, in the 1911 Copyright Act, the
life expectancy at that time was 50 years and now, life expectancy
is 78 years. It really does need extending to protect performers
and record companies for that matter.
Ms Pike: On the whole question
of whether copyright is fit for the purpose of the digital environment,
for me the purpose of copyright is to incentivise creativity,
but not in the sense that Christian was saying that there is not
much of a link between how creative a country is and what the
copyright laws are. Philip Pullman put it very well in a speech
not so long ago when he said that copyright does not necessarily
incentivise creativity. Creative people are going to be creative
whether there are copyright laws or not. All that copyright law
really does is provide a means by which people can actually earn
a living from their creativity. By earning a living they actually
have the time, the space and the freedom to go on creating. If
you do not have those copyright laws in place then what you have
is a country of very creative people but who are creative in a
very amateurish way because they are having to do their creative
work in their spare time as well as doing a day job. For me, that
is what copyright is all about; a digital world does not change
that one iota. There are areas where I think copyright law needs
to adapt to respond to the challenges of the digital environment,
but I do not think that we should be undermining it as a concept
per se.
Q61 Philip Davies: I think you said
you felt that the restrictions were in place to the detriment
of the consumer. Do you have any examples of anything in mind?
Ms Johnstone: What we would like
to see is, in a sense, an outbreak of evidence-based policymaking.
What has happened over the years is that the term of copyright
has increased and increased and increased, and in some cases the
scope of what is covered by copyright has increased so that the
balance is no longer there between the public interest and getting
works into the public domain as quickly as possible and has suffered,
and the monopoly rights of rights holders' have increased. We
would like to see a much better evidence base for deciding what
the term of copyright should be. The disbenefits to society and
consumers are in terms of price and choice of goods available.
Works may not be exploited so they never come into the public
domain at all at any price; and prices will be higher than they
otherwise would be without monopoly rights. That is the cost to
consumers and society of overextending copyright. Going back to
the digital world and the issue you raised about digital, the
technology has, in a sense, made things possible which were not
possible before; so exploring the technology has left consumers
in a bit of a legal vacuum. Things that were previously tacitly
accepted as fair use are now things which they are either finding
restrained through Digital Rights Management tools, or they are
facing prosecutions for doing things which might have been accepted
before. What we want to see are some fair rules for the game and
some much clearer consumer rights set out in the copyright legislation
than we currently have.
Mr Ahlert: I want to add something
which I think is very interesting in this context. There is legislation
being discussed in the French parliament at the moment, which
is also a Member State, so it might be of interest. In France
they are discussing whether or not Digital Rights Management actually
restricts consumer choice, and in some regards it does. In a digital
and a converging digital world you cannot look at copyright as
completely separate from Digital Rights Management. I think they
have reached a point in the whole discussion where you can see
basically (through a software code, through implementation in
the hardware of MP3 players, laptops and DVDs) there are restrictions
placed on what consumers can do with the content they purchase
which go far beyond what copyright law always allowed consumers
to do. For example, in a non-digital environment you could always
make a copy of a record you had purchased. That can effectively
be reversed or you are locked into one particular device—and
this is where Apple has heavily complained in France. I think
that is a hugely important issue to look at—how Digital
Rights Management actually over-protects certain industries and
limits consumer choice.
Q62 Philip Davies: I was just wondering
what your view was of where the balance was between the consumer
and the creative regime?
Ms Pike: Actually copyright law
does serve the interests of consumers, by promoting and incentivising
the production of creative goods in the first place. Obviously
there is a balance to be struck between the interests of the creative
community and consumers, and that is why copyright does come to
an end after a certain period of time. What that period of time
should actually be is a question for Government. I agree with
Jill's call for evidence-based policymaking, and that is precisely
what is happening at the moment with the Treasury having commissioned
a consultation and, I believe, also a study to look at whether
an extension of the term of copyright on sound recordings would
benefit or not benefit the interests of Britain's creative economy.
Mr Stopps: Basically, if you are
talking about the public domain, if you take sound recordings,
for example, if they come out of copyright and into the public
domain after 50 years what happens? The record company keeps selling
the album, usually for the same price; the record company own
the artwork, because the artwork has a life of copyright of 70
years after the death of the designer. It is a much longer period
of copyright. So the public do not benefit; the public keeps paying
the same price for their Edith Piaf CD, or whatever it is that
has gone out of copyright. The only group that miss out are the
performers, because we stop getting paid after 50 years. The record
companies actually get more because now they are not paying the
performers and they are making a larger profit on the CD. They
own the artwork and nobody else can put that out with that artwork
because it is controlled for a much longer period of time. It
is really an issue, as always, of creators and performers losing
out. We always get the short straw and we would like Government
to listen more to us and to have a better balance of rights based
on the performer and creator. The imbalance at the moment for
us is between the exploitive community and us. We are often very
much in line with consumers. At one end of the process you have
the creators and the performers and at the other end you have
consumers, and it is what happens in the middle that is the problem
as far as we are concerned. We often see very much eye-to-eye
with consumers—not on everything—and copyright protection
is one of the contentious issues, but as explained, it is not
necessarily in the consumers' interests that term is not extended.
Q63 Janet Anderson: If I could just
press you, David, on the 50-year issue. What does Government have
to do to get that extended, because I think there is a European
angle to this? Do you think there would be any cost to the Exchequer
in not extending it beyond 50 years?
Mr Stopps: if you could extend it beyond
50 years you would get more income from taxes and the State would
benefit. Poor musicians, performers and creators would not cease
to have an income so you would not have to provide State aid to
support them and you would also be able to tax rich artists, and
record companies, after the 50-year period. From the State's point
of view there are clear advantages in extending. True you have
to go to the European Union now and campaign on our behalf there
(please), but hopefully you can persuade the whole of the Commission
to come onboard with us.
Q64 Janet Anderson: Has anybody made
an estimate of the cost to the Exchequer of not extending it beyond
50 years?
Mr Stopps: I am not aware of that.
There may be but I do not know.
Q65 Chairman: Jill Johnstone, you
are completely opposed to this, are you not?
Ms Johnstone: Yes, we are. I am
very sympathetic with many of the arguments about artists' rights,
and it is an issue we raised with the Commission when we were
making our submission on their review of copyrights in 2004, about
whether copyright could be used to try and improve artists' rights.
I do not think the way to do this is to extend the term. One needs
to look at other ways of protecting artists from unfair contract
terms. Our view is that the terms of life plus 70 years of many
copyrighted works are way over what is needed. It is very hard
to see how you can relate them at all to the need to incentivise
investment in creative works. The way to deal with this is to
reduce copyright terms and look at other ways of improving artists'
rights.
Q66 Chairman: That is not what happens
in other countries though. We are relatively short in terms of
the length of term of copyright in this country, compared with
America and Australia?
Ms Johnstone: America yes, but
not necessarily other parts of the world. I would start looking
very critically at these extraordinary long lengths of copyright
term—and I cannot see any argument for justifying them in
terms of the incentive to create and invest in creation—and
to look at bringing those terms down. We would like to see a presumption
against the extension of copyright terms; and, going back to the
evidence-based point, a serious independent look at the costs
and benefits to society as a whole of these very long monopolies.
In other areas of the economy we have the competition law which
we strenuously enforce; and here we have turned it on its head.
While it is legitimate to recoup returns on investment, it is
not legitimate to have monopoly rights to extend to the descendants
of the original creators.
Q67 Chairman: We are not talking
about descendants; we are talking about living artists whose creative
work is suddenly no longer to be theirs to control?
Ms Johnstone: In the case of sound
recordings which are 50 years, for other ones, we are talking
about life plus 70. I do not see that there is an economic case
for extending the current term. In fact I think there is a good
economic case for moving back in the other direction.
Chairman: We may return to this in our
next session. Can I bring in Adam Price.
Q68 Adam Price: My question is to
Christian Ahlert. To what extent do you think that the nature
of creativity is changing in the digital age? The false dichotomy
between the professional artists and the passive consumer seems
to be blurring with the copying. Copying is part of creativity,
is it not, whether it is sampling in music or the use of collage
going back a hundred years in art? Is the nature of creativity
changing and should we be enabling that by actually bringing down
some of these copyright barriers?
Mr Ahlert: It is not necessarily
changing. Something which comes naturally to all of us is when
you first go to school you learn by copying. When you learn how
to write you basically are being taught by a teacher and you are
meant to copy; that is your basic way of doing things. Over time
your creativity and originality increases because you are assembling
the world and you are aggregating it. That was always part of
the way we as humans basically live and learn. What is different
now is the economic transaction costs are different. If you actually
speak about a digital environment you are not producing a copy
of something; it is exactly the same and that makes the whole
economics of the game very different because now we can easily
distribute a song to thousands of people and it has the same quality.
I think what is happening is, if I look at my younger cousins
for example, the way they use the Internet, they go to Google,
they look for images and then they copy and paste them into a
document. It is a very rational way to work in this environment
and this is where Creative Commons provides, because we actually
work within existing copyright law. We are not aiming at changing
copyright law. We are trying to provide an environment with a
licence which says you can do certain things and you can produce
derivative works. There are apparently many people out there who
think that is a good idea. We have just done a small study for
the Arts Council looking at how many people in the UK are using
Creative Commons' licences. The licence has just been available
for a year now and you can see there are more than a hundred thousand
websites using it now, which is an indication of this. There are
many artists who think it is practical to copy parts and then
reassemble them. There is also the question about what the law
should do if you effectively break it. Let us face it, it is the
reality out there. My friends all have lots of music on their
iPods and laptops which is not bought in a record store. Do you
want to treat this as basically a criminal offence or the way
the French are going right now, and looking at it and making it
more like a traffic offence; that is effectively what is happening.
Q69 Mr Sanders: I like David's idea
that if we do not extend the rights there will be all these impoverished
artists. It conjurers up a vision of Mick Jagger having to claim
pension credit! I think you might over-egg the pudding on that
one. I think there is a real issue here of what is the nationality
of the creative talent? Because we have this issue, do we not,
of content that originates in one country not being freely accessible
in other countries. For example, DVDs that originate in America
are available in a content that cannot be accessed in other parts
of the world. What vision do you come down on? Is it that the
creative content should be available to everybody wherever; or
that we should hide behind different national systems, perhaps
the way the French are going, perhaps the way we should go, where
we try and protect (or maybe not protect) our domestic consumers
from having access to that content? What side of the fence are
you on?
Mr Stopps: Firstly, I would like
to say, whilst we do represent Robbie Williams and Pink Floyd
and those sort of people, but we also represent a host of performers
who are having to work at Tescos on the checkout to get by.
Q70 Mr Sanders: That is only because
their music is not as popular as David Gilmour and Roger Waters?
Mr Stopps: Maybe they have had
a mild amount of success and some compensation should come back
to them in later years.
Q71 Mr Sanders: One-hit wonders.
Mr Stopps: Not necessarily, no.
There are a lot of people out there who go round clubs performing
and never really get into the charts but they are a very important
part of our culture; they are a very important part of society
and they need that protection. It is not so much an issue for
the Robbie Williams's but very successful artists at that level
are very few in number.
Q72 Mr Sanders: I am being provocative.
Mr Stopps: I want to make that
clear. Most of the people we represent are struggling performers—featured
performers admittedly but struggling and trying to make a living—and
we are trying to get them out of the Tesco checkout counter so
they can make a permanent living as a professional and get properly
compensated so they can afford to live; create much better works;
much better recordings and tour more etc. That is the name of
the game as far as we are concerned. As far as the DVDs and the
territorial restrictions are concerned, I totally agree with you—I
would like to see restrictions removed. It is outrageous that
you buy a DVD in the USA and you cannot play it in the UK. I do
not see any justification for it. Creators and performers want
their music to be heard and seen by as many people as possible;
that is the bottom line. They want as many people as possible
to enjoy their creations. We would say we certainly want maximum
access and anything that restricts access is undesirable. However,
if you do have access creators and performers should be compensated.
Q73 Mr Sanders: Can you do that on
a country-by-country basis, or do you actually need some international
standard?
Mr Stopps: The international standard
of course originally come from WIPO in Geneva. If there are international
treaties they then come through to the EC; they then make a directive,
and it then comes down to national law in the UK. You would have
to start in Geneva with WIPO, Certainly the British Government
is represented there, as you know. I think it should be as international
as possible. There should not be any barriers. We want maximum
access to the works that our creators and performers provide.
Q74 Rosemary McKenna: Before I go
into the questions I want to ask, I want to say something about
the dilemma that you all face because I think that is a problem
we have. Behind every Robbie Williams and every K T Tunstall,
there are loads and loads of people who have been working away
there for years and years trying to get their music played and
trying to get their arts performed. It is about strengthening
the balance between the consumer getting good quality affordable
access, and about looking after those people who are not going
to make it. I think we should be talking more about how we use
the digital new media to do that, to try and make it accessible.
I read recently about the young girl who set up a club in her
own basement and put it out on the Internet and she is hugely
successful. That is the kind of thing. We get a wee bit bogged
down in worrying too much about rights and not enough about saying,
"Let's use the new media to try and improve access"
and thereby improve everyone's accessibility and protect the performers.
Would you like to comment on that?
Mr Stopps: Certainly the DIY possibilities
that the Internet has created are fantastic. As I have said, at
one end you have the creators and the performers, and at the other
you have the consumer. What some artists are doing is completely
missing out what is in the middle and are going straight to the
consumer with their own websites and selling their own CDs on
their websites announcing tours on their websites; and selling
CDs at shows. So they are completely missing all that out. The
thing they are going to lack is investment. The record companies
can provide serious marketing investment which can take artists
right through to another level. Occasionally one gets through,
and this is where the Arctic Monkeys are a great example, but
they really are the exception. You do need that marketing investment
from the record companies. However, the DIY model is very good;
but even with the DIY model you are going to depend on collection
societies. Collection societies are going to become very important
to you. If nothing else that this Committee does, if you can create
regulations for the democratic governance, of collection societies,
I think that would be an amazing achievement.
Q75 Rosemary McKenna: The young people
who are downloading and accessing through the Internet, do they
understand that?
Mr Stopps: Yes, they do. They
have to be members of the PRS.
Q76 Rosemary McKenna: No, I mean
the people who are accessing it. Not the performers but the youngsters
who are actually accessing the music, do they understand all of
that?
Ms Pike: I think possibly in many
cases not actually. Going back to your original question, about
how the industry really should be taking advantage of the opportunities
of the new digital technologies—I think that is absolutely
right. I do think the DIY band phenomenon that David is talking
about is extremely exciting. Obviously the Internet does create
access to markets for individual bands, also small labels, small
music publishers and so on. That is actually a fantastic leveller,
which is really very, very exciting. I think in terms of what
we can actually do to try to monetise new technologies and really
take advantage of them, we need to find ways, for example, of
legitimising peer-to-peer technology. Peer-to-peer is simply a
technology. It has good uses and it has abusive uses. The industry
is really trying very hard to license it wherever possible. There
is one emerging business called PlayLouder which is basically
an Internet service provider and if you subscribe to that Internet
service provider you are able to share music with all of the other
people who are also subscribers in a secured walled garden-type
of arrangement. There are very exciting emerging legitimate uses
for peer-to-peer technology. Where we struggle at the moment is
in trying to licence peer-to-peer operators who have got no interest
at all in respecting copyright. We are talking about services
like Limewire, Mininova, Grokster, Roxter, all of these, where
basically their business model is blatantly selling advertising
on the back of illegitimate music. At the moment they are protected
by certain safe harbours in the law, which means that it is very
difficult for us to actually either license them or litigate against
them to close them down. The upshot of this of course is that
the consumers end up being sued because they are the only people
who are actually committing any kind of infringement. If we could
in some way alter the norm so that rights holders were able to
go to these peer-to-peer operators and license them, then obviously
that would possibly alleviate some of the frustrations of consumers
in getting sued, because the target would then become the peer-to-peer
operators. We would then have more legitimate peer-to-peer services;
happier consumers; and remunerated artists.
Q77 Chairman: Do you want, therefore,
a new copyright law to take account of all these new technologies?
Ms Pike: It is a question of how
you go about doing it. In other territories, such as Australia,
Australia has actually introduced some new legal provisions which
clarify the liability of peer-to-peer service providers. In the
US it is being done gradually more via case law with the very
important decision against Grokster which was last year. It is
a question of how we go about doing it in the UK. There are various
organisations which are currently trying to look at possible solutions.
Q78 Chairman: Last week we heard
from BSAC who are an umbrella body. Their view was that we should
not have a new copyright law but we should make do with the existing
provisions in law, even though these do not necessarily take account
of modern technology?
Ms Pike: I think it could be just
a question of tweaking and clarifying the existing provision.
I do not think you need a whole overhaul of the legislation but
some clarification is probably required.
Q79 Rosemary McKenna: Do you want
to comment on this area?
Ms Johnstone: I think a number
of issues have been raised which I want to comment on. One was
a point raised by Adam Price on creativity. More and more people
have access to tools of creativity now, and so journalists find
themselves surrounded by bloggers and computer games are designed
to be added to, and I think we do need to look more broadly at
creativity and where it happens in the economy. I think perhaps
our innovation policy is rather old-fashioned in that respect.
Another issue that was raised was the partitioning of markets
through technical means. Clearly David is against regional coding
on DVDs, and obviously we are very concerned about intellectual
property rights being inappropriately used as anti-competitive
tools. I am not sure one needs to involve WIPO in thinking about
how one deals with those kinds of issues. There are things the
UK Government can do as well as the Commission to look at how
one stops that kind of market partitioning. I agree with Emma,
the technology has produced fantastic opportunities for people
and we do need to find ways in which consumers can use it with
certainty. I think the current uncertain environment for consumers
is not helpful, and it certainly puts consumers and the industry
at loggerheads with each other. Finding new ways in which people
can make use of the technology is very important.
Mr Stopps: I would like to say
something on your point about whether we need a new copyright
law. I would agree with Emma that we just need a few changes to
the existing copyright law. It has taken us a very long time to
get to where we are with the amended 1988 Act. There have been
a lot of good things happening and, I would say, some bad things.
If I can just give you a few very brief examples of areas where
we think there is a huge imbalance. I mentioned the collection
societies. They are going to become more and more important as
we go into the digital era. The democratic governance of collection
societies is absolutely essential. There is only one that is right
at the moment, and that is the PRS. They have six publishers and
six writers on the board. The other monopolistic societies need
to follow that example. If you are going to be a monopolistic
collection society you must have democratic governance. I cannot
say how important this is. If you take PPL, for example, over
90% of their income is due to featured artists, the people we
represent. Nobody plays a record on the radio because of a session
player or because of a record label—there might be a few
jazz genres where that might happen—but let us say 90% of
the radio play comes from featured artists because DJs want to
play featured artists. We only have one representative on the
PPL board out of 16 board members and that is a big problem for
us.
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