Gowers Slams Out Of Touch UK Cultural Secretary Over Copyright Extension Plan

from the learn-some-economics dept

Last week, UK Cultural Secretary Andy Burnham laid out a highly questionable argument in favor of copyright extension on performance rights in the UK. The logic he used made little sense, and seemed to be based on a odd belief that musicians had some sort of moral claim on money more than 50 years after they recorded songs — ignoring plenty of evidence that any extension wouldn’t actually benefit most musicians, but would enrich the major record labels.

Now, SteveD points out that Andrew Gowers has responded to Burnham’s suggestion and trashed the idea impressively. Gowers, you may recall, is the former Financial Times editor who was asked to explore issues having to do with copyright by the UK government. After spending quite some time researching the issue, he produced the so-called Gowers Report, that explained why copyright extension was a bad idea. Later, Gowers admitted that all of the evidence suggests copyright should actually be much shorter, not longer.

Gowers response to Burnham is worth reading in its entirety, as it skewers pretty much every point that Burnham put forth. Here are just a few tidbits:

As political speeches go, this is pretty silly. A moral case? You might just as well say sportspeople have a moral case to a pension at 30.

Copyright is an economic instrument, not a moral one, and if you consider the economic arguments — as I did two years ago at the request of Gordon Brown — you will find that they do not stack up. All the respectable research shows that copyright extension has high costs to the public and negligible benefits for the creative community.

Consumers find themselves paying more for old works or unable to access “orphan works” where copyright ownership is unclear. Small businesses that play recorded music such as hairdressing salons and local radio stations face a hidden extra “tax” in the form of higher music-licence fees. Do they really need this at this time?

Mr Burnham will no doubt find such arguments uncool. But even on his terms, the case for extension does not work. Twenty years’ extra earning power in 50 years’ time does nothing to put more money in the pockets of struggling performers now: two thirds of lifetime income from an average compact disc comes in the first six years after release.

And it will not alter the incentives for creation one jot. As Dave Rowntree, Blur’s drummer, told my review: “I have never heard of a single band deciding not to record a song because it will fall out of copyright in only 50 years. The idea is laughable.”

The rest of it is worth reading as well, and near the end he puts in a key point, addressed to the music labels: “Please focus on innovation, not on trying to eke more rent from the successes of yesteryear.” Indeed.

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Comments on “Gowers Slams Out Of Touch UK Cultural Secretary Over Copyright Extension Plan”

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SteveD says:

The real issues

Its clear from Gowers arguments that he believes the real motivation behind the extension to be about corporate profit rather then artistic welfare; the Open Rights Group previously estimated that for 80% of artists the change would only deliver an extra 30 euros a year (and this was before the pound dropped against the eruo).

But Guy Hands, the head of the private equity group Terra Firma, hinted at the real money at stake when he explained why they’d purchased EMI label in a rare interview last week.

He justified the 4 billion pound purchase of a collapsing business by dividing up the companies assets and giving valuations for each; the publishing arm was worth about 2.4 billion, the ‘new music’ arm worth about 1.2 billion, and the back-catalogue worth about 1.4 billion; a combined worth of 5 billion.

But if major acts recorded in the 60’s start to fall out of copyright then the value of that asset is going to fall (the Beatles catalogue belong to EMI, and their first album is due to loose copyright in 2013).

This is compounded by the fact that the ‘new music’ sector of the business is doing badly (read: contemporary artists). 88% of them didn’t break even last year, and EMI is currently slashing its rosters. But by reducing the number of new artists it’s recording its also passing less value to its back catalogue and not compensating for the loss in music dropping out of copyright. The only way to maintain the value of the asset in the current business climate is to extend copyright.

This shows that if anything the change would actually encourage less business investment in new music, not more, as labels would increasingly try to leverage their back catalogues rather then attempting to create profitable business models.

PaulT (profile) says:

Re: The real issues

So? All that shows is that EMI failed to take advantage of the product they had for the last 50 years. Why should everyone have to pay extra (and lost access to orphaned works, etc.) because of their short-sightedness?

Also, if the new artists are doing badly, what does that prove? Maybe they have a bad A&R division. Maybe they have a bad marketing department. Maybe their competitors are poaching all the commercially-viable artists. Maybe it’s only the crappy artists who are signing EMI contracts instead of going independent.

Why, exactly, should they be entitled to make more money from work recorded half a decade ago because their current projects aren’t going so well? My father doesn’t get paid for the work he did in the 60s, what makes a guy who played a guitar instead of other work have the right to get paid?

Here’s a quick anecdotal: I used to buy a lot of music and didn’t care about the label. In recent years, I’ve deliberately boycotted the major labels, largely because of the RIAA’s actions (though DRM also had a large part in it). I buy at least 40 Euros worth of music every month, but I’ve only bought 1 EMI-released CD this year (a copy of Radiohead’s OK Computer for 5 Euros).

Now, that means I’ve spent at least 500 Euros on music (not including gigs & merchandise), yet only 1% of that was on EMI’s product, mainly due to the quality of the offered product and a deliberate political statement. Would a copyright extension on The Beatles really make that much difference? No, of course not. It only provides an undeserved pension to artists and an illicit income for the labels while doing nothing to either encourage (see Blur’s comments) or protect the production of new music. Unless you really believe that a major label like EMI is necessary for music production, in which case you’re already clueless.

Lonnie E. Holder says:

Re: Re: The real issues

I think the real issue is the quality of the product. Current pop rock sounds bland to me. Experimental groups still exist, but they are rarely played and receive much more word of mouth than formal publicity. If current pop music became as good as music was in the 60’s and 70’s (and even the 80’s), I suspect people would be a lot more interested in it.

PaulT (profile) says:

Re: Re: Re: The real issues

Current pop music is fantastic, it’s just that the major labels (4 corporations who aren’t interested in making anything new, just what fits into narrow pre-defined boxes, but who own most radio and other outlets) aren’t interested in the good stuff.

My suggestion: if you’re in the US go to pandora.com and let that suggest some music to you. Elsewhere, try last.fm or iLike.com. Sign up accounts at eMusic (free trial, huge amount of great music, independent labels but a lot of big names among the less famous (but no less great) artists), AmieStreet (big selection, interesting business model with a lot of free stuff) and Jamendo (free music but no big names).

Give those a try for a couple of week, and I’m sure you’ll find a lot of great music.

PaulT (profile) says:

Re: Re: Re:3 The real issues

Fair enough, though I’d say my points still stand. If you don’t like what’s being played on the radio, don’t support it by listening to it (unless you’re a captive audience, say at work, in which case I feel sorry for you). Find a way of listening to music you like, and use that to discover new stuff you can enjoy…

SteveD says:

Re: Re: The real issues

Sorry Paul, I didn’t mean to suggest I supported the extension…far from it. I was just trying to explain the corporate forces at work behind the scenes. Should probably leave the blogging to Mike in future.

Those figures came from a BBC radio profile on EMI, and is well worth a listen (they don’t blame piracy for once and do admit the A&R dept. works by ‘throwing acts at a wall and seeing what sticks..the more you have the greater the chance of a hit’.

But its iPlayer, so probably region locked; http://www.bbc.co.uk/programmes/b00ftp0d

PaulT (profile) says:

Re: Re: Re: The real issues

OK Steve, it did sound like you were supporting EMI’s position. I might have a listen to the BBC show when I get chance – region locked content is no hurdle to me, thankfully (another reason why this stuff annoys me – I’m not prevented from listening, only from being allowed to pay for content or support it in other ways).

Anyway, yeah the corporate view is actually the problem. EMI’s woes are not going to be solved by copyright extension, just as the RIAA as a whole is not being helped by lawsuits and DRM. I’m glad they manage to recognise the A&R problems, but to my mind that just makes the copyright extension idea even more ludicrous – they’re expecting The Beatles to bail them out so they can work out how to run their own business? At least they’re not getting a cash bailout from the government, I suppose…

To my mind, some of these businesses need to fail. The quality of mainstream music has stagnated while these corporations have been in charge, and that’s made a lot of people lose interest in music as a whole (as evidenced in this thread).

I say let them fail, strip these monstrosities down and let them run as real businesses again. For example, according to Wikipedia, EMI has over 80 sub-labels either fully owned or operating as stand-alone businesses. Sell some of those off, maybe allow some to become independent, and concentrate on a core business. Some of those label would fail, others would flourish and bring more competition into the marketplace. Of course, competition is what they’re afraid of…

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