A Copyright Extension for EU Recordings

On November 1, 2013, all European Union Member States were required to make legally effective the Directive 2011/77/EU. The Directive, an amendment of the 2006 version, extends the copyright term of protection for sound recordings to a term of 70 years. Although European law already required a term of life plus 70 years for composers and songwriters to protect their copyrights in musical compositions, sound recordings were only afforded a term of 50 years before the new law, leaving many musicians and performers who did not write their own music with a shorter period of protection and thus income. On its face, the new legislation appears to be a big win for artists. Many have deemed the legislation “Cliff’s Law” after Sir Cliff Richard, the law’s most high-profile proponent.¹

The Brouhaha

“It’s extremely good news,” said Roger Daltrey of The Who. “Musicians need to be paid. There are thousands of small musicians whose independence relies on the little bit of royalty, for work they did in the 1960s [which they] get by way of a pension.”² Many of the “golden age of rock and pop” singers, performers, and session musicians rely on the income generated from their percentage of royalties of sound recordings. Longtime manager of U2 and current manager of PJ Harvey and The Rapture, Paul McGuinness, echoed Daltrey’s comments, calling the ruling “a great step forward for artists.”

Jools Holland, OBE, host of the BBC’s Later Show and jazz pianist, stated: “It is fantastic news to hear that copyright term has been extended to 70 years. Artists put their hearts and souls into creating music and it is only fair that they are recompensed in line with the rest of Europe. It’s important that creators get paid for the work they do and this extra 20 years is much deserved.”³

Frances Moore, chief executive of IFPI, called Cliff’s law a victory: “With this decision, the European Union is giving artists and producers in Europe the fair treatment they deserve. The extension of the term of protection to 70 years narrows the gap between Europe and its international partners and improves the conditions for investment in new talent.”

The new law comes at a pivotal time for the financially troubled recording industry, especially in the UK. Had Cliff’s law not been enacted, many famous and popular recordings of the 1960s would have fallen into the public domain. These recordings include those of artists such as the Beatles, the Who and the Yardbirds. Record companies would lose a significant source of income without the exclusivity rights of those sound recordings. Without the extension of the term, sound recordings from this era would all have fallen into the public domain.

“This important decision comes not a moment too soon,” said Geoff Taylor, chief executive of the British Phonographic Industry, a trade group that represents Major labels in the UK. “An exceptional period of British musical genius was about to lose its protection. As a matter of principle, it is right that our musicians should benefit from their creativity during their lifetimes, and that they should not be disadvantaged compared to musicians in other countries.”

The Directive itself and all proponents of it emphasize that the real benefit of the extension is being conferred to artists and performers. In Commissioner Barnier’s official statement on the adoption of the copyright extension, he stated: “Today’s decision to increase the term of protection for musicians’ copyright from 50 to 70 years will make a real difference for performers”.⁴

Critiquing the Directive

Given such positive reviews, it seems odd to question the ruling. But a point could be made that the real beneficiaries of the extension of copyright are the record labels. Unlike United States copyright law, there is not a “termination” rights section of the Directive that allows for an artist to regain control of a copyright after any amount of time. Instead, the text of the Directive includes only an ambiguous declaration that “foresees measures” to guarantee that musicians “actually benefit from the term extension and may recuperate their rights subject to certain conditions.”⁵

The Directive does adds three accompanying measures aimed at benefiting performers and artists. They are (i) the 20% fund, which requires all labels to set aside 20% of gross revenues from sales of all releases featuring session musicians in the extended term into a fund for session musicians; (ii) the ‘use it or lose it’ clause, which allows an artist to reclaim ownership but only after 50 years and only if a recording is not commercially available; and (iii) the ‘clean slate’ provision, which requires labels to wipe out a musician’s debts prior to the extension becoming effective.

The Directive claims the main reason for implementing the change was in order to allow songwriters and performers a fair treatment and to be assured of a steady income, avoiding an income gap between the expiration of their performing rights—when they no longer receive royalties—and their death. The problem is that most record companies own all of the sound recording rights to these works. This means that artists will not significantly benefit from the minimal amount of royalties they are owed. Most artists who were young and just starting their careers were systematically forced by powerful record companies into signing deals that paid only low royalty rates and effectively forced those artists to relinquish all other rights to their music.

Not surprisingly, not all musicians are happy about the Directive. “This is extremely good news for record companies and collection agencies, but bad news for artists,” said Sandie Shaw, a British pop singer from the 1960s. “[We] have 20 more years in servitude to contracts that are no longer appropriate to a digital age.” Shaw, Nick Mason of Pink Floyd, and Ed O’Brien of Radiohead are some of the leaders of the Featured Artists Coalition, a British group that advocates for musicians’ and performers’ rights. For them, the Directive is harmful in part because musicians and performers will not be able to personally reproduce and distribute their own recordings at concerts and will still have to go through the label that owns the recording, creating continued financial obligations and barriers that stand in the way of the benefits of the law.

There is also academic literature against the new legislation.  In 2011, Professor Martin Kretschmer, of the Center for Intellectual Property Policy and Management at Bournemouth University in England, calculated that 72% of all financial benefits of the Directive will go directly to the record labels. Of the remaining 28% that will go to artists, only 4% will benefit those musicians mentioned in the report who would face an income gap.

Significantly, eight European Union Member States voted against it: Belgium, Czech Republic, the Netherlands, Luxembourg, Romania, Slovakia, Slovenia and Sweden. In its written dissent, Belgium argued: “A term extension is not an appropriate measure to improve the situation of the performing artists. It seems that the measure will mainly benefit record producers and not performing artists; it will only have a very limited effect for most of the performing artists and have a negative impact on the accessibility of cultural material” for consumers. For Sweden “extending the term of protection for sound recordings as proposed is neither fair nor balanced; it risks undermining the respect for copyright in general even further.” Its argument against the Directive is that it will hurt consumers’ pockets and not provide the right sustenance, as it should, to talent.  Instead, it will allow the recording industry to capitalize on its old investments.

The problem, naturally, is that sound recordings will only be available through record labels, which could then raise prices at will. Moreover, the implied criticism of many is that a significant portion of artists will never see income anyway because of low contractual artist royalty rates and egregious terms over their sound recordings rights. Finally, royalties will be distributed among the living and, now, dead rights-holding performers or their estates, leaving less for those who are alive, and thus creating a biased royalty distribution.

It should be noted that the recording industry in Europe, and primarily in the UK, lobbied for these changes for many years. Under Prime Minister Tony Blair, the British government commissioned an independent study on the extension of copyright term and recommended against it; the extension was dropped .The copyright directive had also been blocked in the past by a coalition of smaller European countries. Prime Minister David Cameron, on the other hand, whose beneficiaries include EMI, supported the directive.

Professor Kretschmer has explained that he is not surprised that many performers’ organizations and collecting societies have supported the Directive and heavily lobbied for it. They may not get the full revenue from the new measure, which long-term is estimated to be about €1 billion, but they will be getting something.⁶ For Kretschmer, the public will ultimately foot this bill while being denied immediate access to an important repertoire in popular culture.

By Stephanie Theofilos

Endnotes

1. http://www.theguardian.com/media/2011/sep/12/musicians-copyright-extension; See also http://www.billboard.com/biz/articles/news/publishing/1170187/eu-extends-copyright-term-to-70-years

2. http://www.independent.co.uk/arts-entertainment/music/news/cliffs-law-gives-ageing-rockers-a-pension-after-copyright-ruling-2351636.html

3. http://www.independent.co.uk/arts-entertainment/music/news/cliffs-law-gives-ageing-rockers-a-pension-after-copyright-ruling-2351636.html

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