Today saw the second reading in the UK’s House of Commons of the Copyright (Rights and Remuneration of Musicians, Etc.) Bill, aka the ‘Brennan Bill’, named after its creator Kevin Brennan MP.
The bill sought to introduce equitable remuneration (ER) for streams; transparency obligations for music rightsholders; contract adjustment; and a right of revocation for musicians, which we explored in more depth here.
Our analysis this morning was that if the bill did not progress via a vote to the next stage of the legislative process, it would not be the end of the debate about how the economics of streaming (and, indeed, of the music industry) should evolve.
And? The bill did not progress. Or as Broken Record campaigner Tom Gray (who knows his way around parliamentary procedures) explained on Twitter:
If you’re confused by what’s happened in Parliament.— Tom Gray #BrokenRecord (@MrTomGray) December 3, 2021
They voted on closure, they kept it open, which means the vote goes to the back of the debating queue.
They’ll try to move for a vote soon, but the govt will push it out.
So debate will go to 2.30pm but won’t pass.
And as we predicted – not that it was that risky a prediction – this is not the end of the story.
Brennan opened the debate, and after outlining the bill’s main components, addressed some of the criticism that has been levelled at it, including a broadside at labels’ calls for more evidence – in the form of more research – before legislation is voted on.
He put on record an accusation that has been rumbling in private for several weeks, relating to a recent study of creator (musician) earnings conducted by the UK’s Intellectual Property Office (IPO).
“This is an evidence-based reform. I know some in the music industry say we need more evidence. I am all for evidence, but it would have been helpful if the record labels and the British Phonographic Industry, after two requests from the previous Secretary of State for Digital, Culture, Media and Sport, had supplied the evidence that the Intellectual Property Office asked for and had volunteered some data on their royalty distributions,” said Brennan.
“Why, even after the Secretary of State twice told our Committee they should do that, did they not provide the evidence? If they are going to say we need evidence-based reform, they need to supply the evidence.”
The IPO study, which we wrote about here, has been cited by the BPI and independent body AIM in support of their views that Brennan’s bill is not the solution to streaming’s problems.
The claim that labels did not provide the report’s researchers with all the data they required has been festering in private. Now it’s out in the open, and you can expect to hear more about it in the coming months, because what happens next is going to be based on that study and other new research. What data this work has access to will be a critical question.
Brennan also said that he believes “equitable remuneration can be applied in such a way as to take account of smaller independent labels that already have ethical business practices” – a response to another criticism from that community.
“Some have suggested that reintroducing equitable remuneration might have the unintended consequence of some independent artists receiving less money from streaming because session musicians would be entitled to be paid. In fact, fully independent music accounts for a very small proportion, probably 6%, of the total market, and fully independent artists who experience success are the ones making the most from streaming,” added Brennan.
“The administration of ER may be cheaper to such artists than their current distribution deals. In any case, it is likely that any impact would be marginal, and it would be entirely possible to adapt the proposal to meet any concerns that arise.”.
Brennan also hit back at claims that his bill would reduce investment in the British music industry by the global major labels, and thus harm the artists it is seeking to protect.
“Actually these changes will make the UK market much, much more competitive. The music industry is characterised best currently as an oligopoly: that is clear to all. One company may control as much as 40% of the market,” he said.
“Giving artists more control over their rights and letting those rights change hands more freely will hugely open up the market to smaller independent labels and artists. When changes were made in 2003 to copyright in relation to film, similar points were made, but we have seen the burgeoning expansion of the British film industry since that point, and I want the same for music.”
There was time for a Sex Pistols reference – “this Bill is not about anarchy in the UK; it is about equity in the UK music industry” – before other politicians (with varying degrees of knowledge, relevance and/or desire to windbag on about their own music-discovery life stories) had their say.
We’ll skate over the anecdotes about Pinky & Perky records; jokes about cassette tapes being something only old people understand (increasingly factually unsound given the growth in this format’s sales among young music fans); and a paen to the pantheon of Black Country rock bands that ran “Slade. Led Zeppelin. Babylon Zoo…”).
No, the important part was the government’s response, delivered by George Freeman, the parliamentary under-secretary of state for business, energy and industrial strategy.
“We accept that there is a problem and we accept the fundamental case made by the Select Committee,” said Freeman. A ringing endorsement, albeit not one accompanied by actual support for voting Brennan’s bill through to the next stage of the legislative process.
“We are keen to make sure that we get this right and pass a piece of legislation, if that is what it takes, or work with the Competition and Markets Authority to put in place the right measures to make sure that the industry – the labels – respond in the right way,” continued Freeman.
“Ultimately, before the long and slow process of legislation, we would like to find an industry solution, if we can, which is why we have brought together a series of working groups with industry to start to put feet to the fire and ask some hard questions about what they are doing to make sure that we properly remunerate artists.”
Delighted to make clear today that the Government IS acting on the @CommonsDCMS #BrokenRecord Report & that I & @NadineDorries @JuliaLopezMP @beisgovuk @DCMS are working with @The_IPO @CMAgovUK on Proposals to ensure a fair & vibrant digital #creativeindustries & music 🎶 sector: https://t.co/Eq7NHp4BDW— George Freeman MP (@GeorgeFreemanMP) December 3, 2021
Stronger words, perhaps, than you might expect. Freeman also put a firm deadline on this feet-flaming, hard-questioning process.
“We want to get information back within a matter of months and come back to set out the Government’s proposals within a matter of months. We aim to come back with a substantive response in the summer. Certainly no later than September,” he said.
“It slightly depends on what we hear, but if we can avoid legislation and solve the problem in some other way, that will be our first instinct. Indeed, I want to make it clear that if we conclude that legislative change is the only way to achieve what the House is looking for, that is very much open to us.”
But he came back to the government’s backing for the core argument of Brennan’s bill, the inquiry that preceded it, and the Broken Record campaign that sparked that inquiry.
“We want to work closely with industry and, as it is watching this debate closely, I wish to make it clear that we think that there is a problem. We want to make sure that we get it right, and we want to work with it to get the right measures in place,” said Freeman.
“We would prefer that not to be legislative, but if we cannot find a solution with the industry we hold open that opportunity. We are not saying today that we will not legislate. We will if that is the right thing to do.”
On one level, today went the way of the label bodies – the BPI and AIM – who had argued that the Brennan Bill would harm the industry, and that more research was needed into all of its provisions before any legislation.
Many of the MPs who spoke against the bill quoted directly from research and/or talking points circulated by those two bodies. They have done a good job on behalf of their members of convincing politicians that their concerns about the bill are right. The phrase “unintended consequences” came up several times, so that message in particular has taken root.
Yet Brennan and the Broken Record campaign have also done a good job of convincing other politicians that their concerns are right. What’s more, they have spurred a market study by competition regulator the CMA, and working groups that – if Freeman’s comments are correct – could have teeth as they explore how the industry might change.
Here’s the key thing to understand though. Both the market study and the working groups can only recommend what should happen. In both cases, it will be down to the government to decide what actually happens – whether that be changes made by the music industry voluntarily, or legislation enforcing it.
“Certainly no later than September” it is, then, to find out what really happens next, and what that will mean for musicians, for music companies, for streaming services and everyone else involved in this ecosystem.
In the meantime, the various industry bodies on both sides of the Broken Record debate will be trying to agree a constructive path forward in those working groups, while at the same time continuing to lock horns as the CMA goes about its market study. It’s going to be… interesting, to say the least.