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Guest Post by @poedavid: “Dance Like Nobody’s Paying?” Spotify isn’t

[We’re thrilled to welcome David Poe to MTP!]

by David Poe

Spotify’s disastrous “dance like nobody’s paying” ad campaign has now been demolished in the national press, garnering negative coverage in Newsweek, Billboard, NME, Hypebot, and more. Sometimes big corporations slip up and show us what they really think of us, and this was one of those times.  

But what’s Spotify’s plan?  Here, Variety’s Patrick McGuire suggests Spotify’s intent is to divide listeners and musicmakers:

Similar to the way many people bite into a cheeseburger with no consideration for the cow and farm of its origin, campaigns like Spotify’s widens the growing divide between listeners and creators. Audiences intellectually understand that music doesn’t magically materialize out of nothingness for the exclusive purpose of entertaining them, but as music continues its irreversible transition to all things digital, listeners are becoming less aware and interested in how artists create, record, produce, and share music. With a 2017 Nielsen Music report showing that, on average, Americans now spend over 32 hours a week listening to music, it’s clear that music is hugely important in the lives of listeners — just not in ways that provide meaningful visibility and support to musicians.

Ever heard that song “Put another nickel in / In the Nickelodeon”? It’s from 1950 (written by Stephen Weiss & Bernie Baum.)

Everyone loves streaming. But more than half a century later, most streaming services contend that a song isn’t worth a penny. I respectfully disagree.

Because a song isn’t really a song until someone listens to it, no  musicmaker should be faulted for utilizing all available platforms. But streaming in 2019 forces music makers and fans into the middle of a moral hazard. Music enthusiasts should be able to listen to streaming music without having to compromise their scruples, or that of their favorite bands.

Despite the lack of transparency in the music industry, The Trichordist has managed to cobble together an annual Streaming Price Bible.  It is the most credible summary I’ve found on what each streaming service pays, which may impact where Spotify listeners choose to put their dough-re-mi:

2018_streamingbible

How Bad Is it for Music Makers?

You can easily see from the chart what each service pays for recordings.  At about $0.003 per stream, Spotify pays little but has the greatest market share.  At about $0.0002 per stream, Google/YouTube is even worse. 

Very different companies. Their commonality: free music, which has made them rich from ad revenue and data scraping, but mostly from their stock price increasing at the expense of musicmakers. 

Let’s put this in context.  To earn a monthly US minimum wage, an artist on Spotify would need 380,000 streams by some estimates.

To make the same monthly salary as the average Spotify employee, a songwriter would need 288,000,000 streams.

Frozen Mechanicals

For reference, the statutory rate for a song on a CD or download is 9.1 cents — 4.1 cents more than ye olde Nickelodeon of the 1950s. 

FROZEN MECHANICALS 1909-1977

You might say that’s better than the old days—but it isn’t as good as it looks, because the song rate was frozen for 68 years before it began gradually increasing … only to be frozen again in 2009, where it will stay until 2022.

FROZEN MECHANICALS 2009-2022

Clearly, streaming has all but replaced CDs and downloads, but without replacing revenue from songs to musicmakers. 

Money is being made from streaming if you look at it on an industry-wide basis.  But—due to the hyper efficient market share distribution of the “big pool” revenue share accounting instead of a user-centric model (or the “ethical pool,”) individual music makers are far worse off.  More than ever, streaming revenue is not paid to music makers who don’t share in the big advances or Spotify stock. 

You Can’t Compete With Free

The vast majority of Spotify users are in the “free tier”. By offering free access, Spotify artificially distorts the streaming market and disallows competition amongst streaming companies. As musicians have learned the hard way, you can’t compete with free.

Spotify likes to say it’s artist-friendly, a tool for music discovery. 

Guilty of chronic copyright infringement, Spotify was founded by a former pirate.  It’s a corporate ethos built on theft.  The Music Modernization Act essentially gave Spotify a new safe harbor, but its tactics haven’t changed.

There’s additional shadiness here: allegations of gender discrimination and equal pay violation, expensive, state-subsidized offices, executive  bonuses, corporate lobbyists, a dicey DPO and of course, the “fake artist” scandal.

Spotify’s ongoing lobbying campaign against artist rights continues despite the unanimous passage of the Music Modernization Act in Congress last year (and the jury is out on the MMA and Spotify’s safe harbor).  Shocker—Spotify apparently reneged on agreements it made to accept the Copyright Royalty Board’s mandated increase in songwriter pay.  Another bonehead move that was publicly rebuked by songwriters from Spotify’s “secret geniuses” charm offensive, including Nile Rodgers and Babyface.

Spotify was joined by Amazon, Google, and Pandora in “suing songwriters” to appeal the Copyright Royalty Board’s ruling that increased the paltry streaming mechanical rate, which Spotify lawyer Christopher Sprigman argued against in court.  

Apple Music does not have a free tier and yet was the only major streaming service that did not challenge the new royalty (44% more, which means 0.004 instead of 0.003, which is still bullshit.)  

This may be because Apple recognizes that music helped save its ass from financial ruin 20 years ago. Math is not my strong suit, but numbers indicate music (via the iPod, a now-obsolete door stop) generated nearly half of Apple’s accumulated wealth not to mention introducing a new audience to Apple’s other awesome products.

Or it could just be that Apple understands creators and may actually like us.  There’s a thought.  We were early adopters—Macs have been in every recording studio and creative department for decades.   

Apple Music’s intent to increase artist pay to a penny per side is its best yet, but now long overdue.   Which is a shame, because a trillion dollar market cap company could afford to redistribute some wealth.  If Apple offered a fair alternative, most would run screaming from the competition.

The Generational Problem

There are many who are more expert than me, some quoted in this post. I’d rather be staring into space strumming guitar and writing a song than here discussing music and money. 

But I’m concerned for the next generation of artists, especially the musical innovators. Here’s why:

There used to exist a sort of musical middle class. Artists in all mediums expected financial struggle but there was the possibility of making a living and even growing as an independent artist.  That might include a record deal or selling CDs at a gig in order to make it to the next town. 

Songwriters could get an album cut and get by or even do well if the album sold (Jody Gerson has a great explanation of this.)  Musicians of quality could see a light at the end of the tunnel.

Streaming has “disrupted” all of that.

Light’s out. 

Bands’ streaming access may—may—help build an audience that may somehow convince talent buyers to book gigs that route your tour, which is awesome. But sustaining a career is still cost-prohibitive for many. 

Thus the Top 40 is full of the children of the affluent. 

Not children of millionaires: Stevie. Dylan. John & Paul. Aretha.

Those of us who have been making music for awhile will remember the optimistic, 1990s-era “monetize the back end” argument: bands on the road can make up income lost to streaming by selling merch. 

I tour, too. I wish the best to every band who does so. 

But not every musician can travel … or got into music to sell a fuckin hat.

Another common sense rebuttal to “shut up and tour:” INCOME FROM LIVE SHOWS WAS NEVER MEANT TO REPLACE THAT OF MUSIC SALES — plus both have investment costs and overhead to produce.

Gas costs what gas costs. 

Mics cost what mics cost. 

Streaming doesn’t pay what music costs.

Sorry to yell. Just sick of this lie that to make up for streaming losses all recording artists, especially senior citizens, should tour forever. Or the assumption they are all rolling in dough! Tell that to the punk rock drummer, alto player, the cellist, the songwriter. 

Note: It’s almost impossible to buy a new car or laptop that plays a CD. Low income streaming has effectively replaced higher income physical sales. 

So if streaming is to be the primary method of music distribution — if not the only one — then pay artists fairly.  Or it really will be lights out, if not for the huge artists who regularly celebrate stupidity then for the ones whose songs you want played at your funeral.

Without musicmakers, Spotify has nothing. When Spotify says “dance like nobody’s paying,” it’s because they don’t. 

Given support from listeners and lawmakers, this era of economic injustice via streaming may one day be a footnote.  Fans should not be paying for music they don’t listen to which is what has been happening and is a hallmark of streaming gentrification.

Now, listeners must demand fair pay for musicians they claim to love, whether it is higher streaming royalties or a user-centric royalty allocation—or both.

#IRespectMusic 

Another Bad Artist Relations Week for Spotify

Spotify released one of their groovy ad campaigns last week.  This time celebrating their freebie subscription campaign.

D_SMUJEW4AAwd6c

You really do have to wonder where they find the people who come up with these things.

Blake Morgan, David Lowery and David Poe all laid into Spotify with their own tweets.  Just like Lowery’s seminal “Letter to Emily” post, but much faster, social media began driving traditional media with the story.

Billboard, Newsweek, Variety and New Music Express all picked up the story in 24 hours, and many others are also picking up the story.  I did a short post that Hypebot connecting the dots from the giveaway campaigns to user-centric royalties.

But the capper was the Godwin’s Law moment when Spotify’s lawyer and NYU professor Christopher Sprigman went after both Blake and David Lowery on Twitter for reasons that are frankly lost on me.  Professor Sprigman had something of a bizarre moment when he compared Lowery to Alex Jones which culminated in this exchange (recall that Alex Jones was deplatformed):

Sprigman 1

It should not be lost on anyone that Professor Sprigman supported Professor Lessig’s losing argument in the Eldred v. Ashcroft case and apparently was co-counsel with Lessig in another losing argument in the Kahle v. Gonzales case.  It also must be said that David Lowery and Melissa Ferrick’s class action against Sprigman client Spotify and Lowery’s case against Rhapsody were probably among the most consequential copyright cases (along with BMG v. Cox)  in the last five years.  Some would say that the Lowery cases set the table for the Music Modernization Act (and it should come as no surprise that David was asked to serve on one of the committees).

So while Professor Sprigman may find that Lowery “isn’t important”, there is a crucial difference between Professor Sprigman’s big copyright cases and David’s.  Want to guess what it is?

Some are speculating that Sprigman is retaliating on Blake and David Lowery for their successful commentary on his client Spotify–but I’d want to see a lot more proof.  Until then, you’d have to say Charlie has a point when he says that Sprigman is kind of an academic Bob Lefsetz.

Sprigman 2

And Spotify stumbles across the finish line of another bad media week of dissing artists.  Whew. Thank God it’s Monday, right?

What, Me Worry: The Decline of MAD Magazine and David Simon’s Dire Prediction

July 6, 2019 1 comment

The cover of the first magazine issue of MAD in 1955 bore these prophetic words:

This magazine is vital for you to read and inside you will find an extremely important message from the editors.

Even in its decline, those words are true today but for reasons that are not particularly funny–except perhaps to Marissa Meyer and Arianna Huffington as we will discover.

What did the editors mean at the time?  Well, what else was happening in America in 1955?  Oh, yeah, these guys:

mccarthy_cohn

Think it didn’t take guts to launch a parody magazine in those years?  Think again.

But, unlike the many newsrooms that have simply disappeared with the rise of Google and Facebook, MAD is not going away entirely.   The Hollywood Reporter tells us:

The beloved satire publication will no longer be sold on newsstands after the August issue, and future editions will shift to previously published material with new covers.

In other words, the value in the magazine will be in re-cycling the past, or one might say commoditizing MAD Magazine so it can be monetized online.  The irony here should not be lost on anyone–a major defender of fair use parody and satire is having its bones picked over by the fair use profiteers.  (See Judge Kaufman’s opinion giving MAD a victory in Irving Berlin et al., Plaintiffs-appellants, v. E. C. Publications, Inc., et al. [MAD], Defendants-appellees, 329 F.2d 541 (2d Cir. 1964) (cert. den.) for those reading along at home.)

In a prescient 2008 book review (entitled “Google the Destroyer“) of Nicholas Carr’s The Google Enigma, antitrust scholar Jim DeLong gives an elegant explanation:

Carr’s Google Enigma made a familiar business strategy point: companies that provide one component of a system love to commoditize the other components, the complements to their own products, because that leaves more of the value of the total stack available for the commoditizer….Carr noted that Google is unusual because of the large number of products and services that can be complements to the search function, including basic production of content and its distribution, along with anything else that can be used to gather eyeballs for advertising. Google’s incentives to reduce the costs of complements so as to harvest more eyeballs to view advertising are immense….This point is indeed true, and so is an additional point. In most circumstances, the commoditizer’s goal is restrained by knowledge that enough money must be left in the system to support the creation of the complements….

Google is in a different position. Its major complements already exist, and it need not worry in the short term about continuing the flow. For content, we have decades of music and movies that can be digitized and then distributed, with advertising attached. A wealth of other works await digitizing – books, maps, visual arts, and so on. If these run out, Google and other Internet companies have hit on the concept of user-generated content and social networks, in which the users are sold to each other, with yet more advertising attached.

So, on the whole, Google can continue to do well even if leaves providers of is complements gasping like fish on a beach.

In the case of MAD, Jim DeLong’s theory is still quite applicable–it’s just the creation of the compliments is evidently going to be old material with new covers (possibly user-generated).  And one of the leading and most influential sources of parody and satire is left flopping and gasping for air alongside the Rocky Mountain News and a host of other disappeared newsrooms in the ones and zeroes where no one can hear you scream.

Let’s understand that MAD’s decline is actually very important because it’s symptomatic of a serious harm at work around the world as the scrutiny of elected officials declines directly with the closing of newsrooms and the transmogrification of independent journalism into social media “reporting” that is edited, controlled, filtered and monetized by you know who.  It is well to remember the dire warning from David Simon in 2009 before the U.S. Senate Commerce, Science and Transportation Subcommittee on Communications and Technology.  (David Simon wrote and produced The Corner, The Wire, Treme and was formerly a crime reporter for the Baltimore Sun.)  Mr. Simon told the Senate hearing on the Future of Journalism and Newspapers:

Understand I’m not making an argument against the Internet and all that it offers. But you do not in my city run into bloggers or so-called citizen journalists at City Hall or in the courthouse hallways or at the bars where police officers gather. 

You don’t see them consistently nurturing and then pressing sources. You don’t see them holding institutions accountable on a daily basis. Why? 

Because high end journalism is a profession. It requires daily full-time commitment by trained men and women who return to the same beats day in and day out, reporting was the hardest and in some ways most gratifying job i ever had….

The day I run into a Huffington Post reporter at a Baltimore zoning board hearing is the day I will be confident that we have reached some sort of equilibrium…[but] the next ten or fifteen years in this country are going to be the halcyon era for state and local political corruption….

And the fair use profiteers Marissa Meyer (then still at Google) and Ariana Huffington also on that Senate witness panel were yucking it up.  Maybe it’s because they knew no one was listening to David Simon’s warning about corruption–for some reason.  The subsequent history certainly suggests that if anything David Simon underestimated the extent of the corruption.

russia_medvedev_facebook_zuck

But that magazine is vital for you to read and inside you will find an extremely important message from the editors.  And remember–we were warned.  While they laughed.

David Simon Hearing

What, me worry?

 

 

 

 

“ACTA2” Trolls Publish Hit List on Pastebin of Artists who Supported Copyright Directive in Europe

June 28, 2019 Comments off

 

Crispin Pastebin

The “ACTA2” reference is a little inside baseball for the US audience–ACTA was a multilateral executive agreement (not a treaty) that would have strengthened copyright around the world.  Google opposed ACTA and drummed up astroturf opposition in Europe–which deserves a second look now that major newspapers have confirmed the extent of the Cambridge Analytica-style gaslighting campaign in Europe that Google and Facebook marshaled against the Copyright Directive.

“ACTA2” is a weak attempt to compare the Copyright Directive to ACTA (“ACTA2”, get it?) in hopes of mobilizing Europeans to reject their cultural monuments and embrace American multinational corporations who pry into their most private information and sell it to advertisers.  Oh, yeah.

Wixen Music Publishing Lawsuit Against Pandora Raises Questions About Lyric Licensing

June 19, 2019 Comments off

In the “it was only a matter of time” department, Wixen Music Publishing has sued Pandora over infringing reproductions of the lyrics in songs it represents.  (For those reading along at home, Wixen is represented by badass David Steinberg, so good luck Pandora.)

All these cases against tech companies start with very similar facts–they were given a chance to fix the problem and they either entirely ignored the copyright owner (like David Lowery and Bluewater) or they obfuscated and tried to deflect blame, or did both.  Here’s the key fact from this Wixen case:

Plaintiff’s representatives put Pandora on actual notice of its infringing conduct in early 2018, yet Pandora did not even attempt to address its infringing conduct until May 2019, when it first purported to cease displaying some of the lyrics to the Musical Compositions on its service….Pandora’s infringement is therefore willful and deliberate.

In other words–Pandora apparently blew off its responsibilities for over a year and still didn’t fix the problem.  Here’s a practice point–when Wixen or someone like Wixen calls, you need to fix your problem.  Right. Now.

But this case raises an interesting side point that may indicate a likely waypoint down the trail.  There is a company called LyricFind that licenses lyrics for many publishers according to their advertising.  Wixen notes in the complaint:

Pandora may claim that it had obtained licenses to display the lyrics to the Musical Compositions from one or more sources, including an entity called LyricFind, the self-proclaimed “largest lyric licensing service” in the world, which claims that it “has licensing from over 4,000 music publishers, including all majors.” However, as Pandora knows, and has known, LyricFind did not have the authority to grant licenses to Pandora for the display of any of the lyrics to the Musical Compositions on its service.

How does Pandora know this?  Probably because Wixen (and possibly other publishers) told them so.  It’s entirely possible that Pandora has a license with LyricFind for the songs it represents, but if Wixen hasn’t authorized LyricFind to represent them for lyric licensing (which they evidently have not), then this is an irrelevant fact.

I have to believe until shown otherwise that LyricFind would be the first to tell their licensees that LyricFind does not purport to license all the lyrics for every song ever written or that ever may be written in any language from any songwriter or publisher in any country on the face of the Earth.

The problem seems to be the same problem that Big Tech has had with music from the beginning–the tech companies don’t want to have to confirm their rights because that involves human beings and human beings costs money.  It’s this dismally poor administration of licenses by the licensees that seems to be the stumbling block.

However, it does make for interesting viewing to see exactly what was said by whom when about what, and what assurances were given.  My bet is that the next step will be like the Music Modernization Act–a retroactive safe harbor with a blanket license and a statutory monopoly.

Read the Wixen complaint here.

Guest Post by Stephen Hollis: South Africa Creative Sectors Petition SA President on Copyright Bill

June 7, 2019 Comments off

[MTP readers will recall that there is a fierce fight going on in South Africa over a new national copyright amendment that is backed by Big Tech but bitterly opposed by South Africa’s creative sector.  South Africa lawyer Stephen Hollis gives us the background and detail.  We’re pleased to have the opportunity to post Stephen’s article to bring everyone up to speed.  Stephen is a member of the Adams & Adams Entertainment Law Group in Johannesburg.]

In what will undoubtedly be recognized as a watershed moment for South Africa’s creative sectors, a broadly representative group of investors, stakeholders and trade and industry associations representing the whole spectrum of our creative industries petitioned President Ramaphosa not to sign the controversial Copyright Amendment Bill into law.

The trade associations include:

  • ANFASA– Association of Non-Fiction Authors of South Africa
  • S.A– Animation South Africa
  • IBFC– Independent Black Filmmakers Collective
  • MPA-SA– Music Publishers Association of South Africa
  • PASA– Publishers Association of South Africa
  • PEN Afrikaans(authors)
  • RiSA – Recording Industry of South Africa
  • VANSA– Visual Arts Network of South Africa
  • WGSA – Writers Guild of South Africa

The Bill, together with the Performers’ Protection Amendment Bill (‘the Bills’), was rushed through Parliament and hastily approved by the National Assembly and the National Council of Provinces.  This, despite grave concerns expressed by stakeholders and investors (locally and internationally), and legal and constitutional experts that the Bill does not meet Constitutional muster, places SA in breach of important international treaties and risks the major destabilization of our already vulnerable creative sectors.

How did we get here?

The Department of Trade and Industry undertook the necessary task of updating our Copyright legislation and our Performers’ Protection Act to bring our laws up to date to meet the challenges of the digital environment and to uplift the plight of our vulnerable creatives and improve their earning potential.  One of the catalysts of change was the 2011 Copyright Review Commission (CRC) report which was commissioned by Minister Rob Davies after a group of musicians petitioned the Office of then President Zuma in a plea for assistance.  The issue then was that, almost a decade after the re-introduction of so-called Needletime royalties for performers featured on sound recordings, no meaningful royalty distributions have been forthcoming.  The commissioned enquiry resulted in a report from Judge Farlam and his team of around 200 pages, containing valuable recommendations on how to improve the plight of musicians, composers, artists and performers in the music industry.

Creatives were therefore understandably enthusiastic, as one of the key driving forces for legislative change was understood to be the recommendations of the CRC report. DTI surprised everyone when the draft Bill introduced a ‘world first’ in that it proposed to introduce ‘user rights’ that would afford users the right to share equally in royalty distributions with musicians, authors, composers and performers.  It also empowered users to transfer copyright out of the hands of current owners of original works.  It further allowed users to tamper with and remove technological protection measures and copyright management information from protected works, including digital works.

It also introduced another ‘world first’ in providing users with arguably the broadest set of copyright infringement exceptions that would effectively provide them with a plethora of new ways they could copy, reproduce, use, access, etc. copyright protected works without the need to pay license fees or market related royalties.  Not only did DTI’s draft Bill allow users to freely copy materials in the educational space, but it introduced a new statutory defence for users to rely upon when a copyright holder felt aggrieved when unlicensed use of protected works was made, called ‘fair use’.

The fair use debate

In what turned into the hottest topic of debate regarding DTI’s game changing proposals for the transformation of our copyright system into a user access-oriented system, was the importation of the controversial fair use doctrine from US law, where it finds its origin.  Without conducting any economic impact assessment or proper research, DTI’s controversial proposal seeks to import this US-statutory defence to copyright infringement into our law without any of the legal checks and balances that makes the system work somewhat well in the US.

Fair use represents a vague and open-ended set of criteria which leaves it to the Courts to determine whether the unauthorized use, copying, etc. of a copyright protected work can be made without a license.  The main counter-balance to this sanctioned authorization for users to make unlicensed use of copyright protected materials in the US, is the remedy that rights holders have in the US to claim statutory damages for infringement, ranging from US$750 to US$150 000 per act of infringement, which can be claimed on top of any real economic harm that can be proved by the rights holder.

In SA, a rights holder can currently only claim damages if it can be proven that the infringer had ‘guilty knowledge’ and the amount of damages is limited to actual economic harm proven or an amount that the rights holder would typically license the work for.  What this means is that an unlicensed user can claim to not have guilty knowledge of infringement until such time as a Court has considered the matter and found that the unlicensed use was indeed infringement.  This effectively pulls the few teeth left from the watchdog that SA creatives and rights holders can call upon to restrain unlicensed use of protected works.

So, while introducing the broadest regime of copyright infringement exceptions into our law, our rights holders’ remedies to prevent infringement is reduced to an all-time low.

Whose interests are served?

Stakeholders in our copyright and entertainment industries were understandably shocked at DTI’s proposals and what was initially thought to be clear drafting errors, were exposed to be a concerted and deliberate effort to weaken our copyright laws to enable users, and government, to make use of copyright protected materials without the need to pay the authors of the works.

When DTI co-hosted an event at a fancy hotel in Pretoria one week prior to the August 2017 Parliamentary hearings with the world’s largest users of copyright protected materials, in ‘Big Tech’, and referred to them as their ‘Partners’ in developing the new legislative proposals, the penny dropped.

While the Big Tech companies from the USA do require legislative reform to allow them to make use of copyright protected materials that do not affect the commercial interests of rights holders in very specific instances, government went too far in developing legislation that would skew the balance entirely in their favour, without any compelling reason, research, policy or impact assessment that might justify such a radical and ‘world first’ departure from the status quo that would weaken copyright protection in SA to an all-time low.

Unguarded statements from high ranking politicians, including the Chair of the National Assembly’s Portfolio Committee on Trade and Industry, Ms. Joanne Fubbs and from former Minister of Trade & Industry, Rob Davies, that the copyright exceptions are justified because text books are too expensive, a hidden policy agenda was revealed.  Government’s ‘free education for all drive’ will be funded by authors of books and works in the educational space.  DTI also legislated that the unlicensed use of copyright protected materials would be allowed for government insofar as it is required for the vague purpose of ‘public administration’.

Where does this leave our Creatives?

The sudden and unexpected departure from focusing on increasing the legal protections for our vulnerable creatives steers SA into uncharted waters. Recently, the EU Parliament voted to address the growing value gap in commercial usages of copyright protected works and introduced a legal responsibility on digital platforms to pay market related royalties for the use of protected works.  In SA, we are moving in the opposite direction in allowing for more unlicensed usages of works.

Government attempts to hide this visceral gutting of our copyright laws behind the electoral promises that creatives will now enjoy more rights, including royalty payments that content production companies will have to hand out on all works that are still in copyright and commercialized in SA, despite the fact that 90%+ of those projects have not yielded any profits.  It rides rough shod over contractual dealings of the past and sends a message to the world that ‘your contract negotiated in SA today may be ripped up by government tomorrow’.

The risk here is that SA content production companies will simply remove works from the market that have not yielded a net profit yet, in order to ensure that they can keep their doors open for business and not pay out monies on past projects that place them in financial risk.   Also, foreign performers would be able to claim against local film, music and other content production companies. Our creatives would no longer be employed or commissioned to create new works by international clients and investors and film and music production companies will move their upcoming projects to other jurisdictions.  Who will suffer from this the most?  The very local creatives that the Bills purport to protect.

Our creatives are effectively being sold down the river with empty promises, on the back of  a map to a pot of gold at the end of the rainbow, that does not exist.

What to expect if the Bills are signed into law

Major disinvestment into our creative sectors will result if the Bills are signed into law as presently worded.  While our creative sectors have warned repeatedly and consistently from the onset that this is the case, these warnings have simply been ignored.  The Publishers Association of South Africa (PASA) was the only party that commissioned an independent economic impact assessment which report was prepared by PwC.  This report warned that our publishing industry would be decimated if the Bill was signed into law, as is, and even though this report was handed to the National Assembly in 2017, government chose to completely ignore the findings, and did not deem it necessary to conduct its own assessment on how the copyright exceptions and fair use would likely impact on our creative industries.

After the National Assembly approved the Bills, the NCOP reportedly received around 1000 submissions in opposition to the enactment of the Bills.  The Chair of the Select Committee deemed it appropriate to allocate one hour to consider the submissions received from stakeholders and creatives’ representatives.  DTI presented to the Committee that the panel of legal and industry experts appointed by the National Assembly gave the Bills a green light.  This was a lie.  None of the four experts did so and they wrote a letter to Minister Davies to object and to request a retraction of that statement.

Even though Dr. Evelyn Masotja (acting DDG of DTI) proceeded to do so on the day that the NCOP considered the Bills, it was not deemed necessary by the Chair of the Select Committee, Mr. Edwin Makue, for a review of the experts’ opinions to be conducted.  The Bills were simply approved in record time and sent to the President for his assent.

Conclusion

While the much-maligned Bills have been railroaded through Parliament on the back of powerful and hidden political agendas, and carrying the fake promises to creatives that their collective plight would be uplifted, the reality is that the enactment of the Bills would destabilize and cause significant harm to our creative sectors and economy.

It would also deter and undermine the new President elect’s objective of breathing new life into our economy by inviting direct foreign investment into our economy and business sectors.  The only ones who would benefit would be those who wish to make use of copyright protected materials without paying license fees or market related royalties to the authors thereof, and without investing in the creation and development of local, original content.

While government, educational institutions and digital platforms are licking their lips in anticipation of the enactment of the Bills, our creative sectors are galvanizing and forming an opposition that would likely launch a legal challenge that would place the irrational, irresponsible and fundamentally flawed legislative copyright reform process in the international spotlight and highlight the ‘state capture’ of yet another important and valuable sector and resource that would harm all South Africans in the long run.

 

Guest Post by @DMcGonigal: How will the creative industries fare in the new European Parliament?

June 4, 2019 Comments off

[We are thrilled to have a guest post by my friend Dominic McGonigal, Chair of the erudite C8 Associates think tank based in London and Brussels.]

The EU elections attracted the biggest turnout for quarter of a century, bucking the trend of declining interest in the EU among European voters. It was spurred by Brexiteers and their national equivalents, matched by internationalists who wanted to show their pro-European credentials.

But there was no clear manifesto on either side and the result is a curate’s egg.

The two largest parties are the European People’s Party (EPP) and the Progressive Alliance of Socialists & Democrats (S&D), reflecting the power base in most EU Member States, centre right and centre left. They used to dominate the Parliament in what was known as the Grand Coalition. When they agreed on a piece of legislation, they had the combined votes to see it through. For the creative sector, that meant support for any proposal that both respected intellectual property rights and enhanced the rights of authors. Although in the last Parliament, even this was not enough as the S&D in particular was split as many of their MEPs bought into the ‘free internet’ ideology.

Now the EPP and S&D no longer have a majority between them. In practice, any legislation needed the support of other parties. Now, it definitely does.

Here are the provisional results by party.

It is also interesting to see how the parties divide along pro- and anti-EU lines. Much has been made of Nigel Farage taking 30 seats for the new Brexit Party (from 28 UKIP seats previously), but the nationalists did not gain as much as expected. You can see here that pro-EU parties have 72% of the chamber.

We have already seen the impact of the smaller parties. Last year, a party with just one member, the Pirate Party, managed to build up a blocking vote on the Copyright Directive, admittedly aided by the online muscle of one of the tech giants.

So, the other parties assume greater significance now, especially if they choose to focus on a particular topic.

Leading the charge of small parties with a loud voice is the Pirate Party. Ten years ago, the Pirate Party had two seats. In the last Parliament, they had just one. Now they have four seats – one German pirate and three Czechs.

The German pirate, Patrick Beyer, has already aligned with the Greens. The three Czech pirates may well follow although they have moved on from the single issue of internet freedom to embrace transparency in government and other similar policies.

In the last Parliament, a single pirate MEP, Julia Reda, persuaded all but two of the Green party, as well as many others, to support her in opposing increased remuneration for the creative sector in the Copyright Directive. With four pirate party MEPs pushing an anti-copyright agenda, they could build a stronger anti-copyright grouping, especially as the two Greens who supported the creative industries have both retired. We have lost some other influential supporters, through retirement or shifts in voting allegiances.

We still have some powerful advocates in Germany, France, Spain, Holland and the UK (at least until Brexit). But they will have a tougher battle creating a majority against the vocal protest votes led by any MEP that objects to the European approach to culture and the creative economy.

Dominic McGonigal

June 2019

 

 

 

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