23.03.2012: UK Music has responded to the Government’s Consultation on Copyright. The full document can be downloaded a the bottom of this page, but please see below for points from the executive summary:

In Government’s own words: “UK business invests more in intangible assets than physical ones, and nearly half of that intangible investment – £65 billion in 2008 – was in intellectual property (IP). IP’s contribution to the UK’s economy is therefore both substantial and vital.”

Government argues that the overriding rationale for changing UK copyright law is economic, to stimulate growth. Accepting the ten recommendations made by Professor Ian Hargreaves’ independent review of intellectual property, the Department of Business, Innovation & Skills stated that “sweeping reforms” of the IP framework would “add billions to the UK economy.”

While some reform may be welcome, UK Music suggests that Government will not achieve the scale of economic growth it seeks from the measures proposed in this consultation. Certain proposals could even have the unintended consequence of reversing growth and starving investment in new creative works. The assumptions which underpin the Government’s growth projections are unreliable at best and plain wrong at worst.

Forgetting the economics briefly, we do concede that, if worded with great care, some of the Government’s proposals could yield cultural benefits and strengthen the overall integrity of the copyright system. For example, we wholeheartedly agree that the law should be changed so that libraries are in a position to make multiple copies as required for preservation purposes or can digitise orphan works. Also, consumers should not be in a position whereby they inadvertently infringe copyright law when copying the contents of their legitimately-purchased CDs to the MP3 devices they own.

UK Music emphasises that we want to work constructively with Government to ensure that any change to copyright will bring such benefits whilst complying with mandatory European legislation.

Other proposals under consideration might cause direct harm to the UK’s creative industries and undermine their potential to contribute to the UK’s economic performance. This harm would not be ‘balanced out’ by benefits to other parts of the UK economy. Nor could they be justified on cultural grounds or for the greater social good.

Badly-drafted or ideologically-driven change that leads to a net economic loss to the UK economy is a risk not worth taking. The three areas where the potential harm is greatest relate to exceptions for private copying, parody, and educational use.

Private copying:

The most potentially damaging proposal is that of a broad private copying exception, without fair compensation, that extends to ‘cloud’ services. An open-ended exception would directly interfere in a rapidly developing market, and cut across and possibly halt current licensing negotiations between copyright owners and technology companies. Technology companies require a licence for their activities when it involves building a new customer-based business from the use and lure of rights owned content. The primary beneficiaries of a badly worded exception on private copying would be global technology companies based in the United States or otherwise resident for tax purposes outside the UK, whose dominance already act as a significant barrier to UK-based technology start-up companies. The costs would be borne by UK copyright owners, and ultimately, UK plc. The music industry will strenuously resist such a damaging market intervention.

Parody and pastiche:

As with music, comedy flourishes in the UK. And particularly so online. This is a phantom “problem”. Consequently, we are puzzled by how the Government thinks introducing a fair dealing exception for parody, caricature and pastiche will contribute significantly to the economic growth of the UK – never mind the £600m pa envisaged by the Hargreaves’ review. A legal exception for parody, caricature and pastiche will open a loophole to abuse by those who would exploit an exception as a means to escape paying copyright owners for the use of their work for commercial gain. In addition to the financial impact of such an exception, it puts into danger the moral rights of the creator.

Education:

UK Music rejects options 2, 4, 5, and 6 which are based on the incorrect assumptions that, without exceptions, educational establishments are limited in the type of creative material they can offer. The licensing system already provides flexible solutions, restricting costs and bureaucracy for right holders as well as educational users. The proposed exceptions for educational use would deprive rights owners of millions of pounds of legitimate income. This measure represents a straightforward transfer of value from the rights holding industries to the public sector. It would destroy an exceptionally efficient rights clearing system already in place in schools via the existing ERA and CLA licences. It would disrupt efforts by rights holders to develop new and innovative licensing solutions such as the MPA reprographic license, scheduled for launch in autumn 2012. We accept option 3 on a qualified basis for the reprographic license but we reject it for sound recordings.

Other exceptions:

The costs to copyright owners from the “other exceptions allowed by the Copyright Directive” as clustered in the Consultation Document will deprive copyright owners of further sources of revenue and introduce new costs, thereby harming their legitimate economic interests.

SUMMARY:

We urge Government to rethink proposals which will deprive copyright owners of legitimate licensing revenue. The musician or creator depends on an income generated from licensing their creative works. The investor relies on the income from licensing these works to run their business and invest in new products.

We are happy to work with Government on reasonable measures such as a private copying exception which complies with EU law and gives the British creator parity with their European neighbours. We are also happy to work on measures to free up the use of orphan works and develop exceptions for use where the public and social good is obvious.

To view the submissions from UK Music, please click the link below.

UK Music Submission – Consultation on Copyright March 2012.pdf