Creator remuneration – Report Summary

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

Author: Culture, Media and Sport Committee

Related inquiry: Creator remuneration

Date Published: 10 April 2024

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Summary

Despite the importance and global success of the UK creative industries, successful professional creators are struggling to make a living. Many people in the sector experience precarious rates of pay, employment conditions and contractual terms. There are many short- and long-term factors, including falling real-terms funding, new technologies and the legacy of Covid-19 and associated public health measures. We launched our inquiry to explore issues around fair remuneration and working conditions across the creative industries and consider possible solutions.

As new means of consuming creative content have become the norm, creators across the sector have experienced persistent declines in their royalties and residuals. Royalties can provide income smoothing, financial certainty, greater career flexibility and support during retirement for those who receive them. Royalties have been depressed by digital distribution in the UK, which pays out less to creators (if at all) compared to other modes of distribution. Simultaneously, gaps in the UK copyright regime—where creators are not compensated for private copying, whereby users download, store, copy and share content on digital devices—means that payments from abroad are under threat due to a lack of reciprocity with other jurisdictions. We recommend that the Government introduce a private copying scheme to safeguard those payments from abroad and provide a new, sustainable stream of income for creators.

We consider recent policy implications regarding the impact of the development of artificial intelligence (AI) on the creative industries, which we previously discussed in our report on Connected tech: AI and creative technology. We are particularly disappointed that the Government’s working group on AI and intellectual property has failed to come to an agreement between the creative industries and AI developers on creators’ consent and compensation regarding the use of their works to train AI. We call on the Government to ensure that creators have proper mechanisms to enforce their consent and receive fair compensation when their works are used by AI systems.

Our report scrutinises the prevalence of freelancing within the creative industries. Freelancing has several theoretical advantages, such as allowing creators to choose projects they pursue. However, freelancing can also leave creators vulnerable to economic downturns, unable to access rights to annual leave, parental leave and sick pay and lacking other forms of employee support. More broadly, many creators experience poor working conditions, including inconsistent use of contracts and terms and conditions, uneven responses to bullying, harassment and discrimination and a lack of proper support, accounting, training and development. We recommend that the Government appoint a Freelancers’ Commissioner with appropriate powers and cross-departmental oversight to advocate in the interests of creative freelancers and address wider issues around contracts and working conditions.

Finally, we revisit our work on music streaming in order to review to progress on the “complete reset” we called for in our Economics of music streaming report. We explore the practical implications of the Government’s work to date, which has included the commissioning and publication of relevant research, formation of several working groups and recommendation for a market study by the Competition and Markets Authority. Reflecting on its current programme, we urge the Government to bring forward a package of reforms based on its research and revisit the membership of the recently-formed Creator Remuneration Working Group to give music makers a stronger and fairer voice in group discussions throughout the Group’s timespan. We also note that songwriters and publishing rightsholders more broadly continue to receive pitiful returns from streaming, despite their importance to the streaming economy, and recommend that the Government bring forward measures to incentivise an optimal rate for publishing rights in order to fairly remunerate music makers for their work.