Hargreaves Review of Intellectual Property

Written evidence submitted by Music Managers Forum (MMF)

Executive Summary

· Government should focus on encouraging rights holders to participate in any process such as the Digital Copyright Exchange that will make licensing easier, cheaper and faster.

· Government should do more to educate consumers about copyright and computer use.

· Accurate databases are of course helpful to licensing but are part of the solution. They are not the solution in themselves.

The Featured Artists Coalition (FAC) was formed in 2009 to represent the voice of artists in every aspect of their career. Featured artists are those artists who are contracted to phonogram producers and publishers or who run their own record label, and whose name appears on recordings released to the public. A featured artist is always a musical performer but in many cases they are also musical authors.

The Music Managers Forum (MMF) represents managers of featured artists. Managers are the primary representatives of artists and earn their money by commissioning income that the featured artist actually receives. After the initial artist-management agreement has been signed the managers and the featured artist’s interests are therefore mutual.

1. We welcome the Governments response to the Hargreaves review which set out to remove the barriers to use of copyright material by new and innovative businesses that will fuel growth. The Government does not wish to compel rights holders to take part in a Digital Copyright Exchange and wishes industry to lead efforts to establish such a market place. Unfortunately all the signs over the last decade are that industry will not provide the necessary leadership to make licensing easier, faster and simpler to enable growth. Terrestrial radio is licensed by collective agreement – why shouldn’t internet radio be licensed in the same way?

2. The comparison drawn with rights holders working in an Amazon style market place is a false analogy. Rights holders in the latter are selling an individual good. Failure to agree a price will not halt the entrant into the market. However one substantial rights holder’s failure to agree a price can halt the launch of a music service. Left to its own devices a music market place will continue to fragment rights and make entrance into the market expensive, slow and difficult. It is hard to garner evidence for this situation for 2 reasons:

A) Potential rights users are often still in the market and wish to continue to operate so disclosure of information regarding the difficulty of licensing is counterproductive. We can provide evidence if it is held in confidence.

B) Potential rights users often founder at the first hurdles of complexity and cost and are never even identified. By definition the services that have failed don’t exist.

3. Databases are of course crucial to licensing and it is vital that they are accurate but in themselves they will not remove the barriers to better licensing. Licensing occurs at the moment for those that can afford it but the minutiae of behind the scenes attribution of ownership and payment of income is a job for the recorded music industry to solve; if we wait for perfect databases the licensing of music will grind to a halt. Most users want "all of the music" and as such a collective approach to licensing through a DCE will provide what is required but this also requires rights holders to inject their rights. This is a complex subject but could be achieved in small steps by a progressive injection of rights starting say with internet radio and moving through the spectrum of user requirements.

4. New entrants to the market with non traditional business models could be assessed collectively as to their viability but the price of those rights could be left to individual rights holders. The duplication of multiple negotiations could be avoided. Government should act as the catalyst for better licensing.

5. We welcome the introduction for voluntary codes for collecting societies but would like Government to ensure that the latter consult their members widely over those codes.

6. The introduction of a format shifting exception will have no effect on growth in the UK.

7. We welcome the view that restrictions removed by copyright exceptions are not re-imposed by contract.

8. We agree that it is not the role of Government to design new product offerings that consumers will pay for but if those new offerings cannot get off the ground because they cannot obtain licences easily, swiftly and cheaply (but with fair value for rights holders) then we will all be complicit in stifling new businesses and growth.

9. We welcome the Governments’ commitment to education about copyright. Whilst it is down to each creative industry to put its own case for respect of its own rights Government could to do much to educate computer owners about technological issues such as file sharing, router protection etc and should lead the moral debate about the value of creativity to this country’s economy

5 September 2011