UNCORRECTED TRANSCRIPT of ORAL EVIDENCE to Be Published As HC 743-Iii
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UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 743-iii HOUSE OF COMMONS ORAL EVIDENCE TAKEN BEFORE THE CULTURE, MEDIA AND SPORT COMMITTEE SUPPORT FOR THE CREATIVE ECONOMY TUESDAY 4 DECEMBER 2012 GEOFF TAYLOR, JO DIPPLE, ANDY HEATH and ALISON WENHAM FRAN HEALY, STEVE LEVINE and STEPHEN BUDD Evidence heard in Public Questions 218 - 287 USE OF THE TRANSCRIPT 1. This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others. 2. Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings. 3. Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant. 4. Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee. 1 Oral Evidence Taken before the Culture, Media and Sport Committee on Tuesday 4 December 2012 Members present: Mr John Whittingdale (Chair) Mr Ben Bradshaw Angie Bray Conor Burns Tracey Crouch Philip Davies Paul Farrelly Steve Rotheram Mr Adrian Sanders Jim Sheridan Mr Gerry Sutcliffe ________________ Examination of Witnesses Witnesses: Geoff Taylor, Chief Executive, BPI, Jo Dipple, Chief Executive Officer, UK Music, Andy Heath, Chairman, UK Music, and Alison Wenham, Chief Executive Officer, The Association of Independent Music, gave evidence. Chair: Good morning. This is a further session of the Committee’s examination of support for the creative economy. I would like to welcome Andy Heath, Chairman of UK Music, and Jo Dipple, the Chief Executive; Geoff Taylor, the Chief Executive of the BPI, and Alison Wenham, the Chief Executive of The Association of Independent Music. First, I should make reference to my entry in the Register of Members’ Financial Interests that I am a non-executive director of Audio Network plc. Q218 Steve Rotheram: For the last three months I have been involved with the music industry to try to see whether we can get a single out for Christmas, He Ain’t Heavy, He’s My Brother by the Justice Collective—shameless plug—which is hopefully going to challenge for number one single this Christmas. I genuinely had no real understanding of the complexity of the industry before that—I did not know what pluggers were and so on—but I have gained a greater appreciation for what the industry is about and what it does in the last three months, working with an organisation called Porcupine Management, who have literally dragged me, kicking and screaming, into all these different aspects. Given the complexities of the industry, can you outline the roles of each of your organisations in supporting the industry? Geoff Taylor: Shall I start? I am Chief Executive of the BPI. We represent about 350 independent labels and the three major record label groups. We represent them in the media and in Parliament, we collect statistics, we organise the BRIT Awards, and we do a lot of work in practical terms in trying to deal with piracy on their behalf. So we both represent them and take action on their behalf. Jo Dipple: UK Music is the public policy body of both British musicians and the British music industry. We represent the record labels, large and small, the music publishers, 2 large and small, songwriters and composers, music producers, music managers, the two music licensing societies and the live music sector. We aim to develop with them a strong framework of copyright and intellectual property, so that we can license and sell our music assets. The UK is very good at music. It defines us on a global platform and is worth £4 billion. There are various things that make it so good in this country and I would say those things are raw talent and fierce entrepreneurial drive and, on top of that, great management and business leadership. All depends on the legislative framework that you give us, and I would like to take this opportunity to thank you for the Live Music Act. I always thought that you could not legislate for a new Rolling Stones but you may well have just done that. It should pave the way for a new generation of new musical talent and I am very grateful to Parliament for that. Andy Heath: I am Chairman of UK Music. I am non-exec, whereas everyone else here is an executive. I help run a music company, which is probably the biggest independent record company, certainly in Europe and maybe in the world now, and I also run the publishing side of that. I was instrumental in the formation of UK Music because I felt that the industry could come together and offer you guys a unified and coherent voice that you could understand and follow. The point of the organisation is simply to protect and exploit the commercial music industry, which I believe represents a fundamentally important national asset: the cultural IP that resides in this country. It is extremely valuable, it makes this country a huge amount of money, it has been the dominant contribution of this country culturally throughout the planet for the last 100 years, and I am very determined that we should protect it and make it grow and make it more important. Alison Wenham: I am Alison Wenham, Chief Executive of an organisation called AIM. AIM was begun in 1999 in response to what was clearly a big change coming for all the creative industries. My organisation represents the British independent music industry from the very largest independent companies who have been operating in the market for 30 to 40 years through to bedroom start-ups, artists who are going it alone and all manner of different diversified business models generating revenues around music in its broadest sense. Q219 Steve Rotheram: Thanks. I have just noted that on the BPI statement it says that you represent the voice of the recorded music industry and it mentions Universal— Universal are the distributors—so I need to declare an interest in that. In regard to the main challenges facing the UK music industry, could you go in turn and highlight quickly what you think are those challenges? Geoff Taylor: I think what we need is for Government to implement policies that allow creative businesses like ours to flourish in the digital environment, and in particular help consumers access their entertainment safely and legally on the internet. This is the number one challenge that faces all those companies, small and large, who invest in creating music. Specifically, I suppose there are three things. First, we need Government to provide a strong IP framework and advocate a strong IP framework in export markets for us abroad. Secondly, we need them to take some real action to deal with IP theft because the biggest problem that our small and large member companies face is that they invest hundreds of millions of pounds into creating new creative work, which is very popular with consumers, but very often they do not get paid for doing so. Thirdly, we would like Government to encourage investment in the UK in new creative content. One of the reasons we have been so successful is that we have, traditionally, a very high level of investment in A&R, and we believe that if Government could take some measures to encourage higher than average, so higher than historical, levels of investments in artists and repertoire—that is the music 3 industry’s R&D, effectively—it would help us to grow our businesses and export more. I could go into the details on the IP theft point later, but there are quite a few subheadings under that. Jo Dipple: I would say: support for the three rungs of the music ladder. In terms of raw talent, like I said, I think the Live Music Act is a great piece of legislation that will help. I back the CBI when they say that music and the creative industries should be part of the E- baccalaureate and I think that will help a lot. Skills and training are very important because they will nurture the creative talent that comes up the route into industry. On the entrepreneurial bit, it is crucial to create the right investment framework for small businesses and music businesses: 92% of our music businesses are SMEs and employ fewer than 10 people, so getting the tax and business and access to finance environment right is critical, particularly now in this part of the economic flat growth period. Last is business certainty: we need to know what we are operating on; we need legal and licensed markets. We need consumer certainty and we need business certainty so we know what we are investing in and how to grow our businesses. Andy Heath: I am sure you do not want me to repeat any of that stuff, but I endorse all of it. From my perspective, I think one of the biggest problems for the music industry and the cultural industries generally is the bewildering attitude that we seem to be getting from the Government about its ambivalence towards the benefit of copyright. It seems to me that Governments for some time, but especially this Government, have bought the line that intellectual property is a barrier to growth, and that simply is a lie.