Current Law
Unlike copyright protection for music composers and songwriters who enjoy such protection for 70 years after their death, under current EU laws, recorded musical performances are protected for a maximum of 50 years from the first publication or performance1. This means that during a period of 50 years, performers and record labels receive remuneration by way of royalties each time the recorded performance is played on the air. However, on expiry of the 50 years, the artists (and/or record label, if applicable) lose control over the use of their work and no longer receive this income.
Under current law, performers such as Sir Cliff Richard and the Beatles as well as many other artists and musicians, who relied on songwriters for some of their hits, have recently lost or are about to lose their copyright. For example, Sir Cliff Richard saw his first single fall out of copyright last year and the Beatles' first release is due to go out of copyright in 2012, with early Rolling Stones hits following in 2013. However, it looks like this is all about to change.
Change Is On The Horizon
On 23 April 2009, the European Parliament endorsed and amended legislation proposed by the European Commission extending the copyright term for music recordings from 50 years to 70 years2. In July 2008, the Commission proposed an extension of the term of copyright safeguards for sound recordings and performers' rights from 50 to 95 years in line with those of the US.
The Commission's 95 year proposal had been the result of much lobbying on the part of the music industry and performers such as Sir Cliff Richard and Roger Daltrey (of The Who) who argued that musicians should have the right to earn from old recordings until they die. Mr Richard and Mr Daltrey said that "they were speaking up for thousands of artists who provided entertainment but did not earn fortunes which could see them into old age"3. The matter has been brought into focus recently due to the fact that the 50 year copyright term on many early rock and roll recordings are due to expire. Accordingly, it is thought that such artists who made recordings in the early 1950's and 1960's are soon reaching retirement age and will require the added protection and income, especially given the current economic climate. From the record producer's position, serious issues have arisen due to piracy, reduced CD sales and insufficient income from online sales.
However, several member states have been hostile to the 95 year extension and so a report was produced to the Parliament by Irish MEP Brian Crowley suggesting a compromise extension of 70 years of protection. According to Mr Crowley, the compromise, now endorsed by the Parliament, takes into account the EU Council of Ministers' resistance to any extension and would facilitate an agreement with national governments4. However, this remains to be seen.
The Crowley report was adopted at first reading by MEPs, who voted by 377 votes in favour (178 against and 37 abstentions) to amend the Copyright Term Directive (2006/116/EC) increasing the term of copyright protection to ensure that performers continue to receive royalties for a further 20 years from the first publication or performance of their recorded performance.
The Proposed Legislation
In addition to extending the copyright term to 70 years, thereby ensuring that performers continue to receive royalties for a further 20 years, the legislation also provided for other benefits.
It was noted that the increased copyright protection would also benefit music producers who would receive continuing revenues for the extended period, since session musicians usually sign over their rights in exchange for a one-off playing fee. Under the new legislation, a dedicated fund for session musicians would be put in place to reward such session musicians who relinquished their rights when signing the contracts for their performances. This fund, which would be administered by music collecting societies which represent performers' and producers' interests, would be financed by contributions from producers, who would be obliged to set aside, for this purpose, at least once a year, at least 20% of the revenues gained from the proposed extension.
MEPs also amended the original text to provide for a "clean slate" clause in order to prevent prior contractual agreements to deduct money from the additional royalties so that performers enjoy the additional royalties deriving from the extension. There is also a clause to allow performers to renegotiate existing contracts with record labels after the initial 50 year term and to therefore take advantage of reduced costs previously associated with the manufacture and distribution of the recordings. Performers and artists will be able to renegotiate contracts that would reflect the true costs of digital distribution.
The proposed legislation also includes a "use it or lose it" clause whereby performers can regain control of their recordings if, once the initial 50 year term has expired, the producers are not still releasing the work to the public. The performers can make a complaint and then if the producers have not released the recording within a year of that complaint, the producers will lose their right to earn royalties from performances on the material, i.e. the performers can ask to terminate the contracts they signed to transfer their rights to the record labels.
Too Much Or Not Enough?
Despite the UK government (which previously rejected the 95 year extension), many artists and the BPI (which represents record labels, the Association of Independent Music, the Musicians' Union and PPL, which licenses sound recordings) welcoming the Parliament vote and endorsement, there are those who do not believe that the current proposal goes far enough. There is still concern that it will be mainly the record labels (and the top 20% of performers) who will reap the majority of the royalties and will benefit most from the extension, while other performers' rights and artistic creativity will suffer as a result. Furthermore, the extension still falls short of the 95 years originally proposed, leaving European labels at a competitive disadvantage when compared with US counterparts.
There are also many academics (including former FT editor Andrew Gowers who produced the 2006 Gowers Review, which recommended no change to the music recordings copyright term as a result of little economic justification5) and consumer groups who are unhappy with the decision to extend the copyright term at all. Their arguments are that longer copyrights will have a negative impact on consumers and will reduce incentives for creativity and innovation, as for example recording companies will keep releasing recordings from the same big sellers, which requires minimal investment and marketing.
What's Next?
The compromise position backed by the MEPs will now proceed to the Council of Ministers for approval and agreement of the national governments. The Council consists of Ministers from each member state and the new law will need to be passed by at least a 73.9% majority. If the Council does approve all the amendments made by the Parliament, the amended Directive will be adopted and (as is currently proposed) each EU member state will then have two years to implement the new legislation into national law. However, it should be noted that while the legislation would have prospective and retrospective effect, it will not revive those copyrights that have already expired, such as Sir Cliff Richard's 1958 hit "Move It".
If, however, the Council rejects the Parliament's amendments, resolution of the issue could be very lengthy as the legislation would need to be further reviewed, debated and potentially amended by the Commission and Parliament. It is not yet known when the proposed amended legislation will be considered by the Council.
Footnotes
1. Copyright Term Directive (2006/116/EC)
2. European Parliament, Press Release, 23 April 2009
3. Telegraph.co.uk – Copyright victory for Cliff Richard and Roger Daltrey – 24 April 2009
4. European Parliament, Press Release, 23 April 2009
5. IPO Report on Gowers review of intellectual property - http://www.ipo.gov.uk/pro-policy/policy-information/policy-issues/policy-issues-gowers/policy-issues-gowersreport.htm
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