BPI – Written Evidence (AUT0025)

Introduction

The BPI is the representative voice for the UK’s recorded music industry, including the three major record labels (Sony Music, Warner Music and Universal) and over 400 small, independent labels. Our members account for more than 85% of all recorded music consumed in the UK. We organise the BRIT Awards and the Mercury Music Prize, own the Official Chart and through our charity, the BRIT Trust, support a range of music related charities and organisations, with the biggest benefactor being the BRIT School, a state school in Croydon focusing on music and the performing arts.

The BPI is part of the extraordinarily successful British music industry – worth £5.2 million to the UK economy as well as giving the UK’s enviable ‘soft power’ around the world. Record labels have experienced five years of successive growth, and 7.3% growth in 2019 alone, generating trade revenues of over £1bn, plus overseas export earnings of around £500 million. The UK is well positioned to grow its global music revenues considerably, not least as digital streaming increases and key markets grow; the success of UK artists makes the UK ideally placed to share in this anticipated global growth, with the potential to double export income to £1bn by 2030.

A strong IP framework is the bedrock of current and future success of the music industry. This ensures that everyone in the music community benefits – it prevents illegal or unauthorised sharing of music; and ensures that value flows to all parts of the music value chain. The UK enjoys a gold standard IP regime, and as we seek to forge new global partnerships, this should form the benchmark in future trade agreements.

Australia as a Music Market

1. Australia is a major market for UK repertoire and an important stop on international tours by UK artists. UK recorded music revenues in Australia grew by 28% between 2015 and 2018, and has consistently generated over £20 million from sales, streams and licensing for the past four years (making it the fourth biggest overseas market in the world for the UK).

2. Success in music is cemented in shared cultural values, and goes back to at least The Beatles’ acclaimed 1964 tour of Australia. Since then, waves of British artists have flown the flag, including most recently Rudimental, Calum Scott, Clean Bandit, who made top 10 with their single Solo, and Rita Ora – whose single Let You Love Me was a top 10 hit in Australia. 3. George Ezra’s global hit Shotgun was a No.1 smash in both Australia and New Zealand – underlining the enduring appeal of British acts in Australasia. Most currently, Lewis Capaldi, who in May 2019 topped the UK Album Charts with his debut Divinely Uninspired To A Hellish Extent, is the latest in this line, enjoying top 10 success in both countries, whilst his single Someone You Loved made the top five.

Australia and IP

4. Despite this general level of success, Australia is not without its challenges for British music exports. The sheer distances involved make it difficult to promote emerging artists, particularly given the combination of market size and remoteness.

5. In relation to IP, both the United Kingdom and Australia are signatories to the relevant international copyright treaties, ensuring minimum standards of protection and national treatment for each citizen.

6. In addition, Australia has introduced laws on site blocking and search delisting which are important measures in tackling piracy and their importance should be embedded in any trade agreement.

7. We do have some policy concerns however. Australia has over- broad exceptions to the public performing and broadcasting rights that artificially dampen the income from UK music exports (estimated to be £40m per year in foregone licensing revenue globally), and Australia has had a long discussion about bringing in the same kind of flexibilities for the tech sector to use music through “fair use” that has created a challenging climate for music in the US.

Detailed concerns

Protection of music in broadcasts or performed in public places

8. In the UK, royalties are paid to rightsholders where recorded music is used in broadcasting and in public performance. By contrast, Australia imposes severe legal limitations on these uses of recorded music.

9. In particular, the UK Government should seek removal of the caps on the amount of the broadcast royalties payable for the use of recordings (s.152 Copyright Act). This law indirectly limits radio broadcast tariffs to 1% of broadcasters’ gross revenue because a

2 copyright tribunal cannot set higher tariffs than 1%, meaning it cannot set a market rate.

10. In addition, Australian copyright law also provides for a monetary cap (0.5 AUS$ per person) on the amount that ABC, the public broadcaster, pays for the use of sound recordings.

11. Both of these caps are outdated, lack legal and economic justification, and amount to a cross subsidy to the Australian broadcasters from the music industry.

12. Therefore, the UK should seek, in any trade deal, to ensure that Australia removes the severe legal limitations on the scope of protection of recorded music when it is used in broadcasting and in public performance.

13. Similarly, any trade deal should ensure that Australian copyright law is reformed to offer full protection to recorded music used in placed open to the public. So called indirect uses of recordings in public performance, such as playing music from the radio or TV, are not currently protected in Australia whereas in the UK and in most other countries such protection is available. This fact weighs significantly upon the public performance revenues of the recording industry, restricting their ability to invest in new music.

Exceptions

14. We recognise that the UK has no plans to change its approach to copyright exceptions copyright given we have undertaken a thorough review in recent time. However, the Australian Government has at times considered changing its established fair dealing approach to a US style “fair use” approach, specifically in the 2016 Productivity Commission. This would be an unwelcome approach.

15. Changing the existing Australian law to a US style, open- ended fair use approach would not only weaken the protection of all rightsholders including from Australia and the UK, it would also lead to increased legal uncertainty for rightsholders and users alike. A fair use exception creates uncertainty and costly litigation, which is particularly damaging to smaller rights holders. We would therefore recommend that the UK Government explicitly includes reference to the strengths of the UK’s exception regime in any Free Trade Agreement between the UK and Australia and rejects any shift to a fair use regime.

Exhaustion

3 16. In the absence of any obvious compromise on an international approach to exhaustion during the discussions of the TRIPS agreement, Article 6 of the TRIPS agreement expressly refers to national solutions to exhaustion. BPI supports national exhaustion as being the most appropriate level and allows for a greater control over rights and enforcement of rights and this should be the norm in any Australian deal.

Liability

17. Currently, legal initiatives at US, UK and European level are seeking to assess how online service providers can, and should, help to reduce copyright infringement that is facilitated by, or takes place over, their platforms. The UK’s withdrawal from the European Union provides a good opportunity for the UK government to improve the situation for British composers, performers and right holders, most of them micro business or small and medium enterprises. This should not be jeopardised by including in any trade agreement detailed rules limiting liability, which would prevent the UK acting in a sovereign way to reduce online harms such as IP infringement.

2 October 2020

4