Policy

The Value Gap

Music publishers are constantly providing consumer access to a wide selection of music and this has hugely benefited numerous internet intermediaries such as ISPs and search engines to generate significant profits. The creation of content remains the constant factor in today’s digital environment even while mediums to access such valuable content continue to change and develop. Considering this, IMPF is active in ensuring that composers, songwriters and artists are properly remunerated for their work. At present, digital revenue shares vary greatly and are not sufficient to allow publishers to continue investing in new talent.

Many of these internet intermediaries hide behind safe harbour provisions to protect themselves while continuing to profit from the exploitation of works they have not contributed to. This limited liability regime is not fit for purpose and several internet intermediaries have acquired significant market power on foot of providing access to such creative content.

What’s more internet intermediaries act as a barrier to entry in the sense that licensed services are discouraged from entering the market for fear of not being able to compete with those benefiting from a free ride. The current unbalanced market, characterised by legal uncertainty has resulted in huge losses being sustained by creators.

The Value Gap concept aims to tackle the reluctance of some internet intermediaries to sufficiently remunerate rightsholders for online copyright-protected content. In relation to the recent EU Copyright Directive, while the provisions on timely information and transparency obligations are welcomed, IMPF believes stronger and more concrete provisions are required to address the Transfer of Value issue as the obligation on ISPs is too weak.



User Generated Content

IMPF welcomes the developments regarding UGC in the recent EU Copyright Directive proposals. The new Directive contains provisions which will require User Generated Content platforms to use “effective content recognition technologies” which will give rightsholders access to key data. At the same time, IMPF feels that the provisions in the Directive could be more concrete and specific and that the obligations placed on the ISPs is relatively weak particularly relative to the Value Gap that exists.



Collective Rights Management

IMPF welcomed the adoption of the EU Collective Rights Management Directive, designed to promote greater transparency and better governance of collecting societies in general. The Directive facilitates multi-territorial licensing of musical works for online use and makes it easier for service providers to obtain the relevant licences for music to be distributed online across the EU, whilst ensuring that revenue is fairly collected and distributed to rightsholders.

IMPF recognises that having competing licensing models is healthy and that common high standards of transparency, governance and accountability should be comparable across the board to allow for a level ground for competition.

IMPF calls on all publishers to closely monitor the implementation of the CRM Directive in their home countries and to update their relevant trade bodies in the case of any developments.



Streaming Services fee model

IMPF calls for the reform of the payment models used by certain streaming platforms in favour of a model which calculates royalties on a fixed 'per play' rate/pay per stream. The model currently in use by some platforms involves complex algorithms that calculate royalties based on, interalia, the geographic location where the streaming occurs and royalties are then aggregated based across all streaming activity. IMPF believes that such models inherently disadvantage artists, indies and repertoire of niche genres, and particularly work which might not be streamed in mass quantities.



Exceptions and limitations

IMPF believes that the three-step test used for exceptions and limitations to copyright protection provides sufficient flexibility to individual countries to determine their own policies, provide access solutions in the digital environment and in the case of the EU regime on exceptions and limitations, allow Member States to suitably adapt the regime to varying local and cultural traditions. The optional nature of most existing exceptions reflects the diversity and richness of Europe’s cultures and national cultural policies. The territoriality of exceptions and limitations does not distort or create discrepancies in the EU Single Market.

While IMPF welcomes the new mandatory exceptions for scientific research, teaching and heritage as outlined in the recently proposed EU Copyright Directive, we feel that the licensing market generally works very well and that exceptions and limitations ultimately limit copyright and stifle and discourage creative growth. In all cases, a balance of competing rights must be achieved.



Private copying levies and cloud computing

Private Copying levies aim to compensate rightsholders for losses likely to be sustained arising from private copying of content. IMPF firmly believes in ensuring fair compensation for rightsholders in such situations. Considered by many composers, publishers and other rightsholders as a vital source of income, levies need to be set at a rate which ensures adequate compensation for rightsholders. Currently, levies do not compensate rightsholders properly in the sense that the levy payment is due on devices and equipment and not in relation to specific works being copied.

Nevertheless, IMPF believes licensing should always be the preferred option where it is possible, practical and enforceable. While the opportunities for licensing are constantly growing especially considering the rapid development of new online services, IMPF does not feel that this means that levies should be abandoned as levies are the solution when monitoring the volume of private copying carried out is not feasible.

The varied interpretation of private copying as stated in EU Law has created legal uncertainty and the distinction between private and public use has become vague. For example, many cloud services allow users to store copyrighted content on protected servers, allowing access via a passcode. However, links to this content can be shared with third parties which means that this content is no longer private.

When determining whether certain content activity should be licensed or levied, certain critical questions need to be addressed. These include where and how data is stored and who has access to the files. It is important that the content to be distributed and stored is legal; such cloud services should not be used to “legalise” these illegal files without due negotiation with rightsholders.



Term of protection

The current term of protection in most of the developed world stands at 70 p.m.a. for authors and 70 for performers and sound recordings. IMPF believes this term is suitable in today’s environment.

Music publishers invest significant time and money bringing writers to the market and often, significant advanced payments are provided to these artists before any profit is made. To sustain this kind of investment, publishers must be compensated. In an increasingly aging society, life plus 70 is an appropriate term of protection and anything shorter than that is insufficient to allow for an opportunity to recover on these long-term investments.

Lack of consistency in the term of protection makes it difficult to effectively enforce intellectual property rights (IPRs) on an international level. International harmonisation is vital to maintain adequate protection for rightsholders, especially when considering borderless transmission of works where terms of protection vary.

IMPF flags this very important issue when negotiating international trade instruments with trading partners with differing terms of protection (i.e. Canada, Japan and South Africa) and calls upon their governments to increase the term of copyright to life plus 70 years, making it compatible and consistent with standards currently in place elsewhere.



Net Neutrality

Network Neutrality is the principle that all internet traffic should be treated equally. This must not be used to prevent ISPs from establishing network management techniques to ensure protection against theft of creative works and other unlawful activities. Internet piracy of copyrighted works negatively impacts creativity, jobs and the economy and further blocks broadband networks. Any increase in broadband penetration could exacerbate these problems if not handled properly.



Territoriality

The concept of territoriality in music refers to the licensing of musical works to distributors and broadcasters based on linguistic or cultural markets. Territoriality in copyright application reflects the cultural and linguistic diversity of our world.

We as music publishers have the incentive to licence for as broad a territory as possible to yield increased revenue for our clients, the songwriters and composers. Music publishers do not impose territorial restrictions but rather respond or take heed of any restrictions in the market and as a usual course of events successfully license multi-territorially.



Broadcasters and royalty free music

IMPF questions the services that offer broadcasters access to wide catalogues of musical content that is royalty free. The offer of royalty free options for broadcasters distorts competition, making it impossible for anyone signed to a PRO to compete. Furthermore, in many cases these royalty free catalogues stipulate that writers cannot be a member of a PRO. IMPF asks that a TV broadcaster should, as a priority, seek to ensure that authors are properly remunerated. Such a focus would ensure that the market is open to competition for the best creative content for these TV broadcasting opportunities.



EU VAT for Cultural Products

Currently under the EU VAT Directive, certain cultural products benefit from a reduced rate of Value Added Tax. IMPF believes that online music and music disks should be similarly eligible for these reduced rates under the Directive.

Affording these tax benefits to online music and music discs would be consistent with EU policy which values culture, growth and innovation and recognises the vital role of the creative sector in driving employment and growth in Europe. Furthermore, encouraging legitimate music consumption, would help combat the pirate market.



Piracy online

Mass online theft not only diminishes the ability of songwriters and composers to earn a living but it undermines the incentive to create new works and invest in innovation. Internet theft leads to a culture of disrespect for Intellectual Property Rights (IPRs), a culture which threatens jobs, growth and cultural diversity.

Music publishers are constantly adapting to new forms of exploitation by opening new revenue streams and raising public awareness about the importance of copyright protection. Unfortunately, these efforts are redundant without effective enforcement of IPRs.

IMPF calls for active cooperation by ISPs to tackle online copyright infringement and supports the idea of educating the public, particularly young people in schools, on the nature and value of copyright law.



Free Trade Agreements

IMPF supports Free Trade Agreements (FTAs) and believes that such agreements can be hugely beneficial to rightsholders. FTAs serve to reduce import tariffs, remove non-tariff barriers and give effective access to markets between the relevant partner countries. FTAs often include provisions on the protection of Intellectual Property Rights (IPRs) and through the enhanced protection of IPRs abroad, publishers and artists may have greater possibilities to market their ideas and products in third countries.

Under the principle of the most favoured nation, the highest standards of IP protection are applied to all trading partners to any agreement and this is particularly relevant to rightsholders operating in countries where a weak copyright protection framework exists. In general FTAs can encourage better global harmonisation of IPRs and this in turn can create further incentives for content creation and cross-border exchange of protected works.



Copyright in the developing world

IMPF firmly supports the WIPO Development Agenda which is committed to improving the capacity of developing countries to benefit from the knowledge economy.

A balanced and effective implementation of the "Development Agenda" will greatly contribute to recognising copyright’s vital role in pushing cultural and economic growth.

Securing effective enforcement to permit lawful access to works is one of the greatest copyright challenges today. Enforcement of IPRs is key and without this, copyright protection itself will become irrelevant, a move that could seriously undermine any incentives for content creation and innovation.



Cultural Diversity

IMPF strongly supports the UN Convention on the Protection and Promotion of the Diversity of Cultural Expressions and the Convention’s recognition of the importance of IPRs in sustaining cultural creativity.

There is a long and established tradition of music publishers driving cultural diversity through incorporating traditional melodies and investing in local and national repertories. Publishers remain particularly supportive of local culture and can communicate local works to larger markets and communities via established commercial networks.



Traditional Cultural Expressions and Folklore

IMPF believes that existing intellectual property laws are sufficiently flexible to provide protection of literary and artistic traditional forms, cultural expressions and folklore. However, in cases where existing IP laws prove to be insufficient, IMPF feels that voluntary instruments such as codes of conduct and other soft law mechanisms are the most effective solution.