Written evidence submitted by the Musicians’ Union

1. The Musicians’ Union (MU) welcomes the opportunity to respond to th is Select Committee inquiry. We represent over 30,000 musicians working in all genres of music. As well as negotiating on behalf of our members with all the major employers in the industry, we also offer a range of services tailored for the self-employed by providing assistance for professional and student musicians of all ages.

2. The MU responded to the initial Hargreaves Review earlier this year in order to protect our members’ rights and careers, and having considered the Government’s subsequent response we have a series of further points to make on the recommendation to introduce a private copying exception.

3. We have studied the Economic Impact of Recommendations document, but the MU still is not convinced of how the introduction of a limited private copying exception will benefit the economy in any way, since it will not apply to commercial services.

4. The MU did, however, welcome the Hargreaves recommendation to introduce a limited private copying exception which ‘corresponds to what consumers are already doing’ and we believe that it is sensible that acts of private copying should no longer be considered illicit acts. We do, however, object to the multi-national companies who have made enormous amounts of money through the selling of iPods, mp3 players and other devices that enable format shifting not paying fair compensation to the performers.

5. The MU does not agree with Professor Hargreaves that the benefit of format shifting ‘is already factored into the price that rights holders are charging’ - the principle of fair compensation for performers and creators in return for a private copying exception is enshrined in Directive 2001/29/EC of the European Parliament.

6. Hargreaves seems to suggest that any fair compensation should be factored in to the price of the CD. This is wholly impractical in view of the fact that piracy and the buying power of the supermarkets has driven the price of CDs down to a record low and the market would not be able to sustain any increase.

7. To date, 22 out of 27 EU member countries have introduced private copying exceptions and corresponding levy schemes on copying devices. French performers in particular receive respectable payments (around €200pa for a regional orchestral player) from their country’s audio and audio visual levies.

8. The MU feels strongly that UK composers and performers should be allowed access to the same income stream as their European counterparts, particularly since the European Commission has recently been putting a lot of effort into attempting to harmonise the methodology used to impose these schemes and is about to appoint a high level independent mediator whose task will ultimately be to help arrive at an acceptable pan-European stakeholder agreement .

9. The Government ’s response suggests that it opposes a levy system on the basis that ‘it is likely to have adverse impacts on growth and inconsistent with its wider policy on tax’. I n its desire to provide an environment of simplicity and speed for the clearance of Intellectual Property rights for technological innovators in this country, however, the Government should also bear in mind that, while such innovators are applauded for their ability to receive remuneration through a network of licensing systems and micro payments, it is not always appreciated that performers and composers are very much in the same boat.

10. The vast majority of Musicians’ Union members earn less than £20,000 a year from their profession. Even those at the top of the profession are now increasingly dependent on micro payments from collective licensing agreements and this is likely to increase in the future. A few hundred extra pounds generated under a fair compensation scheme for format shifting would be of real significance to an individual musician in that context.

11. It is not just in comparison to Europe that the UK risks being seen as behind the times - we are now seeing developing countries introducing fair compensation schemes. The device manufacturers are already paying for patents to software developers and the like on each device sold and yet the act of copying onto these devices the "software" the consumer is most concerned with (music) is not currently generating any income for the music industry.

Conclusion

12. The MU has no issue with private copying, as long as it doesn’t put UK artists and composers at a disadvantage to the rest of Europe. Consumers should be free to transfer CDs that they have bought onto their mp3 devices. The MU would therefore support a new exception to copyright law as long as it complies with EU legislation.

13. We would therefore like the Government to recognise the principle of fair compensation as laid out in EU Directive 2001/29. As already stated, almost all EU countries operate a form of private copy levy system.

14. If a private copying exception were to be introduced in the UK without accompanying fair compensation, it would leave UK artists and creators worse off than their counterparts in 22 other EU countries.

August 2011