I am grateful for the opportunity to resume my speech—this almost feels like a second episode, perhaps of “EastEnders” or “Doctor Who”, with a drum roll but without all the excitement and cliffhangers—and I have a couple of little points to make. I shall be brief, as I know that several hon. Members wish to contribute to the debate.
I did not want to give the impression that I had any difficulty with the traditional model for contractual arrangements with artists. I think that there is a lot in the rights-ownership model, which has sustained the music industry since its inception and has made a huge success of it. It only created difficulties in the early noughties with the advent of digitisation. Music was probably the first discipline that began to experience difficulties with digitisation, and we know the problems that consumed the industry. Its very survival was under threat from pirates and companies such as Napster and so on.
We put in the infrastructure that helped to deal with that, and music has been a massive success since then. Global revenues hit £16.2 billion last year—the highest since 2002. This is the sixth consecutive year of growth. Between 2015 and 2019, revenues enjoyed by labels have grown by more than £200 million. People are making obscene amounts of money again, but not the people making the music.
The hon. Gentleman spoke about his own illustrious music recording career earlier. Does he recognise that someone who sold 1 million copies of a single in the 1990s typically saw their single reach the top 25 singles of the year, whereas about 1,700 different artists had more than 1 million streams last year? He is right that there is a lot of streaming, but it is being shared so much more widely, so is it not inevitable that many people will receive less?
People will receive less because they are paid such pitiful, insignificant sums every time one of their pieces of music is played on one of the streaming services. On iTunes, it is 0.003p per play for the artist. Apple Music is a little more generous, with 0.006p. Those are the sorts of difficulties that current artists are having to experience in this whole streaming environment.
The Ivors Academy and the Musicians’ Union have told us how bad the situation is for musicians, so we know how bad it is. They have said that 82% of professional musicians have made £200 per year less from streaming. This is totally different from the 1990s, when someone who did sell massive amounts of singles got real rewards. We are coming into the Christmas season, and someone who is lucky enough to have had a Christmas hit in the 1970s or 1980s—there have not been so many recently—will hit the jackpot, because their song will get played again and again and go right to the top of the steaming charts. All these historic artists will once again earn a huge bonus this Christmas season, and all power to them, because these are fantastic songs that we all love, but that gives just an indication of how difficult it is for modern artists to try to make some money.
I declare an interest similar to the hon. Gentleman’s, but on a much more modest scale. Does he agree that, whatever one’s view of the Bill, there are issues that need to be addressed and that the best way of doing that is to put the Bill in Committee, where it can be scrutinised in detail and, if necessary, amended?
I was waiting patiently for my colleague, the third member of MP4, to get to his feet today. In response to a question about whether Ringo Starr was the best drummer in the world, John Lennon is reported to have replied, “He’s not even the best drummer in The Beatles, ” but let me say to the right hon. Gentleman that he is the best drummer in MP4. He is absolutely right that the Bill really needs to get to Committee so that we can ensure that it is properly debated, because the model is not working—the model is broken.
Let me say to my hon. Friend the Member for Cardiff West that the equitable remuneration model is the very least we should be doing. It is a start in terms of addressing some of the inequities and musicians getting a just share for the music they produce. What I do not understand is the resistance to what is a very modest proposal to address this issue. I cannot think of any other way that we could address it. The Select Committee spent hours and hours and months and months looking at this issue, trying to find another solution and another way forward, but none was forthcoming.
The music industry did not give us any suggestions or ideas when it was asked about this. It did not even give us the data required—I think that DCMS had to pay for the data from the BPI in order to get it. The industry has not engaged with us; it has not come up with solutions. The only solution on the table is the modest proposal from my hon. the Member for Cardiff West for an ER distribution regime that could apply to streaming.
What I do not understand is why the Government have not taken it on board enthusiastically so that we can get the Bill into Committee. Let us get all the partners together. It is not good enough for the BPI and the labels to stand aside and not look at this issue properly. I am confounded and bewildered by the objections from the Association of Independent Music. I thoroughly do not understand them, and I will have to speak to the association, because it has to try to make it clear to me how independent music providers, producers and record labels are being disadvantaged. I just do not see it, and I am bewildered as to their objection to this proposal.
On what basis, I am keen to ask, does the hon. Gentleman think the Government are resisting the proposal, seeing as I have not spoken yet?
I am perhaps getting ahead of myself. I am really grateful for that intervention from the Minister, because it is extremely helpful. I know he is a fair-minded and consensual Minister—one who tries to build consensus across the House. This is a great opportunity to do that, because I think he will hear from hon. Members today that there is a lot of enthusiasm for the proposal. It is a means to fix a problem that needs resolving. I am grateful to him, and I will listen very carefully to his remarks.
Let me finish by saying that this issue needs to be sorted. I have waited 20 years for a Bill like this. I have been in the music industry and seen exactly what it is like. It is a field of dreams: if someone makes it big, they can escape and evade their background and go on to huge success and riches. It is an amazing industry and great to be part of. As a musician, I woke up every day thrilled about what I was doing: walking on to a stage with people cheering—not like in the Chamber, with everybody baying and aggressively intervening. Those were different days indeed.
I am just about to finish—I want to allow other people to speak.
We have this opportunity to fix this issue, and I am encouraged by what the Minister said. We have an opportunity to resolve a really serious situation, and I really hope the Government take advantage of it.
I should declare an interest: I am the chair of the all-party film and production industry group, of which Kevin Brennan, who has done a great job by bringing this Bill to the House, is also a member. The group’s work covers music and many other things referred to in my entry in the Register of Members’ Financial Interests.
I also want to register my interest as a huge music fan. I always have been, not only in respect of listening to music, which I will talk about a little, but as a musician myself—albeit that I have never even contemplated reaching the heights reached by Pete Wishart, who escalated to the mountaintops when I was in the foothills of musical achievement.
I wish not only to give my view on why music is so important to this country’s culture and why digital innovation is an important part of where we are heading but to look at that in the context of what the Bill would mean and the potential risks of it coming into force as it is currently. Let me state clearly, though, that I am very supportive of the principles that have been put forward today. We must celebrate and support artists throughout the UK and enable them to have a platform so that they have a stage for the entire world. It is important that we have the opportunity to look ahead and learn from the Digital, Culture, Media and Sport Committee’s output and report. I support all Members who say to the Minister that we should make sure we build on that work. I am confident that the Government will listen and that we can grow from that.
Let me go back to when I was a youngster. The very first record that was given to me when I was a child was by—we have had a lot of references to pigs in recent speeches—Pinky and Perky. It was volume 2 of their famous vinyl album, if I recall correctly. I was a very young kid but I remember being given a fantastic small portable turntable, which was quite unique back in those days. I remember that crystal moment, both audio and physical, of putting the needle on the record for the first time and hearing those little scratches of noise before—bang!—the music kicked in. I think in that instance it was “Tie a Yellow Ribbon Round the Ole Oak Tree”, so it was not quite the rock and roll that we may come to in the Chamber today, but that moment was so glorious.
With streaming now, we do not have those moments, although vinyl is making a comeback. For me, that memory marks the power and importance of music in our lives: it carries us on our journeys throughout life. It is the audio track to all our moments—and often is the moment. When I look back at the impact of that moment on me—I am sure I will be laughed at in the media for mentioning that as the first song I heard on vinyl as a child—it highlights the joy of not just the musicianship but the craftsmanship and science that went into that record. Many years later, I became a physicist and learned much more about wavelengths and technology. Vinyl was an enormous achievement for the world, getting music across barriers and creating conversation across cultures. Music has the power to do that—it has such an important role—so when we look at important Bills like this we have to make sure that we do not risk diminishing the UK’s ability to reach the world. I believe Pinky and Perky may have been American, but that is by the by.
Over the years, my joy in music and my love for music grew further, and by the time I was a teenager, CDs were the big thing. I remember getting my first CD—I cannot recall what song it was, if I am honest—and I was struck by the ease with which I could play it and use it, as well as by the technology. Of course, as a physicist, the idea of lasers being used to play music was quite an incredible thing. There was also the fact that all of a sudden I wanted to go out and collect music, physically going to places to find it. I remember regularly going to local small music shops and looking for indie music—independent music—which is often the lifeblood of much of what we do in our culture, especially for teenagers trying to find their way through society by making friends and going to concerts; of course, doing so was often one of the challenges during the pandemic last year.
What that meant at the time was that I started to get into much more serious music, such as Nirvana. I was a big Nirvana fan, and I always remember trying to work out the lyrics of “Smells Like Teen Spirit”. As hon. Members may know now, the main chorus includes “a mulatto” and “a mosquito”, but at the time I could not find the lyrics anywhere. We did not have an internet to quickly get the saccharine effect of being told the lyrics, who the artist is and all their back catalogue. I had to search it out, and if I recall rightly—I may be corrected—I think the lyrics of the “Nevermind” album appeared for the first time in the maxi-single CD of “Lithium”, which was one of the tracks. I recall being really excited in HMV in Birmingham New Street, where I was growing up at the time, flicking through and finding all the lyrics to the songs I thought I knew the words to, but realised I had got terribly wrong.
Our right hon. Friend Mr Whittingdale talked about the blank tape levy, and as my hon. Friend is talking about lyrics, did he ever, like me, have blank tape recordings of songs from the radio and go back through them over and over again to try to find out the lyrics because they were not available?
My hon. Friend makes an incredibly important point. As a fan of Peter Kay, I know he does an incredibly good sketch—I recommend it to anyone who can find it, but especially on his own DVDs—in which he explains quite a good story about getting wrong the lyrics of famous songs. I strongly recommend that my hon. Friend continues to do that, even though what she did back in those days may have been on the border of what we were allowed to do.
I say this because there is an important point here about discovery, such as the discovery of new artists and the discovery of new musicians. One of the challenges I find with the Bill—as I say, I am very supportive of its principles—is that streaming platforms do provide a great opportunity to find new artists. Not all of them do it to make money just off that platform, but also refer people to TikTok or other platforms to explore their other artwork, forms of art or music, as well as to help tell different types of stories.
One of the great pleasures of coming into this House was meeting Pete Wishart. I remember, having worked in radio, hearing his songs on the radio, including “Loch Lomond” from his days in Runrig. I was able to go away and listen to his songs, and in fact I have some of them on my phone now, so having listened to him speak, I can listen to him sing as well.
Absolutely. One of the great advantages of the internet is that it has opened up to us so many artists, some of whom were, I have to say, before my day. The internet allows such discovery to continue in a way that perhaps would not have been possible without it.
My hon. Friend makes an incredibly powerful point, which highlights the immediacy for us now of music and of art in general, which I see with film and in many other areas. Recently, as a member of the Joint Committee on the Draft Online Safety Bill, I was praising the Common Sense website, which states what age a child should be to watch a film. That has solved many arguments in families, who are able to find quickly not just the age rating for a film or television show but the recommended age at which a child could perhaps start watching things. With the conversations we can have, and the immediacy with which we can find information as well as music and movie soundtracks, the interconnectivity that we have through culture is incredible.
I completely agree with my hon. Friend that streaming has expanded the opportunity to become well known for artists who otherwise may not be that well known, whether they write music for films or television or write their own songs. Does he agree that streaming has also helped to reduce the prevalence of piracy, and that it should be welcomed as an innovation in the music industry?
Absolutely; my hon. Friend makes a powerful point. I recall that in the early 2000s there were sites such as Napster, which in their very early stages shared content that I am sure the artist did not even know was being shared. Over time, of course, they changed their approaches. That is such an important point. We have to get the right balance between protecting artists 100%, ensuring innovation with regard to platforms and new forms of engaging with media and music, and making sure that we remain competitive in the UK. If we do not do that, we may do a disservice to up-and-coming artists, especially independent ones, over time.
Let me continue my music life story. I am pleased to have the artist Limahl—Members may know him—in my constituency. I was chatting to him just today about this issue. I have just realised that I do not want Members to think I am going to give the “Never Ending Story” of my life—the first of many puns; I apologise. From there, though, my love of music was in discovering it and meeting other people who loved it.
One thing we do not often think about with regard to streaming is the ability it gives us to find like-minded fans—to engage with others, to support others and to find people who are also really into certain bands and musicians, often very niche ones. Those musicians are not always pop or rock-and-roll stars; they may be musicians who work on film soundtracks or spend time as backing singers or backing artists. That shows the breadth of what we talk about when we are discussing streaming and, in terms of copyright and its role in legislation and in Government, the complexity that is involved in what look, on the surface, like very simple changes; actually, when we dig deeper, we realise that they affect people in many ways. I urge the Government to ensure—I have had warm words and clear assurances on this—that they engage now and make sure that we have those conversations with all parties so that we do not just end up representing one group and inadvertently creating issues for many others.
Let me fast-forward—or skip forward, perhaps, in the music terminology—to university. Not many people know this, but I did poetry when I was at university. I even did poetry on stage, which is probably what led me a few years later to publish some children’s books. I was fortunate to meet some fantastic, like-minded people who were setting up a radio station at my university, De Montfort University in Leicester. We set up—I say “we”, but they did most of the work; my friends set up a radio station called DemonFM. This was about 25 years ago. These incredible people, including a guy called Chris North, one of my friends, were instrumental in making that radio station happen. We came together not because we all liked the same music but because we loved music, and we loved making sure that people could hear that music wherever they lived in Leicester, within the available FM range. For me, that meant tapping into a group who were not just passionate about music, but actually doing something about it; one of the important themes of our discussion is making sure that we do not inadvertently limit people’s ability to access music, whether that is via streaming or through radio and other routes. During that time, I met some incredibly inspirational people, some of whom went on to work in the industry or in radio.
I thank the hon. Gentleman for that point of order. I assure him that I am listening carefully and will let the House know if anything is disorderly. Obviously lots of others want to speak, so Dean Russell might not want to give his entire life story. It is quite important that his speech be relevant to the Bill, which is about the remuneration of musicians.
I thank Geraint Davies for making sure that I stay on track, as it were.
The reason I am saying all this is that I am trying to give an illustration of how people get into the music business. Some people may not necessarily be No. 1 pop stars on Radio 1 or at the forefront of everyone’s mind when we think about rock and roll or music streaming, but there is a huge weight of people who are fans—individuals or groups who are more at the edges. I have heard statements such as the following from the BPI:
“This Bill would bind British music in red tape, reduce income for the most entrepreneurial artists, stifle investment and innovation by record labels, and disproportionately harm the independent sector.”
That is why I am saying these things.
It is not just about streaming in the broad sense or the famous artists we have all heard of, including our fantastic colleague the hon. Member for Perth and North Perthshire. It is about the long tail of artists and the people who want to be able to access art—music is art. It is about a wide range of speakers, artists and voices. It is also about diversity and making sure that up-and-coming new artists can be heard in the next five or 10 years and that we have the right infrastructure in place in the UK to enable that and support them. My concern about the Bill is that, noble as its goals are, it risks having an inadvertent impact that may not deliver on that aim. That is why I tell these stories; I assure hon. Members that it is not about trying to speak for the sake of speaking.
We might expect the major corporations and music labels to say that the Bill would affect their ability to invest, but that does not necessarily mean that it is not true. Having already seen the market share of UK artists reduce over recent years, we really need to get the balance right, understand the dynamics of the system and proceed. We are all grateful to Kevin Brennan for giving us the opportunity to discuss the matter and look at it very carefully.
I thank my hon. Friend for that valuable contribution.
If I may jump ahead again, I have been very involved in radio. I had my own show called “Dean’s Poetry Show”. It did not have the most inventive of titles, but I played all sorts of music on it, from Frank Zappa to John Lennon and even Max Bygraves—hon. Members may remember “Show Me the Way to Go Home”, which is what many may wish to do at the end of this speech—right through to contemporary bands such as Oasis. I found out about the complexity of the industry and of the reasons why people get into music and want to be performing artists.
Off the back of the radio show, I set up an acoustic night. I found that there are lots of people who just enjoy doing music. They do not necessarily want to be at the top of the charts; they just want to be able to spread their music to as wide an audience as possible. I remember learning the guitar at the time and really getting into the mechanics of the artistry. We have to ensure that whatever the outcome of today and whatever the Government do, we continue to inspire people to pick up a guitar, to learn the piano, to be able to use the new techniques available.
I will come to digital in a moment. On an iPhone or an iPad it is now possible very quickly to create a song and put down our thoughts, with tools such as GarageBand. We can do things that perhaps were not possible just a few years ago, but that means that the opportunity for people to be musicians has grown exponentially. We need to make sure that that exponential growth is not limited by our approaches to Bills, legislation and guidance.
I feel like the privileged position of being MP for Watford was a calling for me, because Watford is such a creative space. Over the past few years, I have had the good fortune to see that culture and art up close. Watford has the Colosseum, which has done recordings for films such as “The Lord of the Rings”—really incredible pieces that have been heard around the world by millions, if not billions, of people. There are also brilliant small locations such as The Horns, which has regular bands and a lot of fantastic cover bands. The LP Café is a celebration of vinyl, where people can try to find music on their own time, having a nice coffee while exploring new types of music; this often ties into the artwork as well. There are also nightclubs such as PRYZM and others, where people can just go and have a drink, and enjoy the music for what it is. The key thing is that music ties across so many areas. My worry with the Bill is that we might end up unintentionally limiting that ability.
AIM has recently said:
“We have expressed our concerns and are open to reviewing and discussing them with all stakeholders to figure out the best way forward. Legislating before this is reckless.”
That comes back to the point about understanding diversity.
The promoter of this Bill has suggested that the best way forward would be to pursue these issue in Committee, which would take some time. Clearly, the passage of the Bill would conclude within the current Session. Is it my hon. Friend’s understanding that the timetable for the engagement exercise that the Government have announced is a 12-month process—well beyond the timetable for the Bill?
I assure hon. Members that I will wrap up shortly. Legislation often is a long and winding road—excuse the pun—but I will try not to make that the case with my speech.
Let me return to the role of digital. We have to ensure that the UK continues to be at the forefront of digital innovation, and that all the players—those from streaming, the artists and the industry—come together to ensure that that happens.
Paul Pacifico, the chief executive of the UK’s Association of Independent Music, wrote to all MPs ahead of this debate and made the point that,
“Despite its best efforts, this Bill will penalise those that can afford it least—the diverse artists in our culturally vibrant independent music community and entrepreneurs who lack the economies of scale of their multinational competitors.”
The reason that I have raised all these comments about my own experience is really to highlight that if we get this right—if we collaborate with everyone and engage with everyone—we could do something really important in the UK, and I know that the Government are keen to do that. My fear is that if we get it wrong, we could cut off the that long tail, impact independent artists, and risk that person who is going to get a guitar for Christmas in a few weeks’ time never reaching their potential.
I will leave it there. Thank you for indulging me, Madam Deputy Speaker.
It is a privilege to be able to speak in this debate, which my hon. Friend Kevin Brennan has brought forward. It is a fantastic Bill and I am delighted to have this opportunity. I wish to comment on a couple of things that Mr Whittingdale said; it brought back great memories of my teenage years and pressing the start-stop button just to get it right. This was making us feel quite old, but then we are getting quite old. I totally accept some of the things he said about Lucian Grainge, but I also want to put on record that I believe Lucian Grainge is a US taxpayer, not a UK taxpayer, which means, disappointingly, that the huge amount of money he is being paid is not coming to our Exchequer.
I am sure the hon. Lady is right about where Lucian Grainge pays his taxes, because he did relocate to Los Angeles, but he is very much a British citizen still. When I was chairing the Select Committee, before she became a member of it, we were looking at the industry. We visited LA and Lucian Grainge made time to talk to all of us, and I think his heart remains firmly here, as of course do a lot of his artists.
I thank the right hon. Gentleman for that comment. Our Select Committee has looked in great detail at this issue in recent months. I do not come from a musical background—you really would not want to hear me sing—but I have always been a huge music fan. I was always told off for spending all my pocket money on music—on Smash Hits, as it was in those days, to see the lyrics, and on vinyl. One thing came out when we were looking at the impact of the pandemic on the music industry. As people could not perform live, that source of funding completely stopped for musicians and artists, and we then went on to look at streaming. Until that point, I had not given a huge amount of thought to where musicians’ and artists’ money came from—it had not really crossed my radar to such a degree. As we went through this streaming inquiry, what became apparent was the absolute unfairness of the system on the people who produce the music we love. It is not the people at the top of the music industry that this Bill would affect to any huge degree, but the people coming through—not just those starting out, but those at a middling level, who are winning awards; we have probably heard of them but they are not quite at the top of their career. They are literally struggling to pay their bills and that is not right. If this is not put right, people will not enter the music industry because they simply will not be able to afford to do so. That is of no benefit to anybody and that is the issue that needs sorting out.
It was interesting listening to just how opaque some of the dealings are between the record companies, publishers and everybody else. I innocently said it sounded a bit like a cartel—I am not saying it is a cartel, but it just sounded like one. Trying to follow where money was coming from, where it was changing hands and where it was going to was almost impossible. This idea of equitable remuneration struck me as a sensible way forward. I am not saying it is a perfect solution, as there probably is not one, but it is a sensible way forward to at least begin to put right the issue that clearly exists. As we all know in this place, the way the digital world has transformed our lives over the past 20 years, in music or in anything else, means that it is very difficult for legislation to keep pace with the changing digital world. Digital skills need updating every five months, but legislation in this area certainly has not changed every five months. I am pleased that the Government have referred some of this area to the Competition and Markets Authority, because there are definitely things that need looking at there.
I turn now to contract adjustment and the fourth part of this Bill, which deals with the 20 years to give notice on a contract. I have been a little surprised at some of the things I have heard about that in the House today. When we start any job, we get a contract of employment. In this day and age, very few people will still be party to that contract of employment after 20 years. People enter into a legal contract when they get married, but there is nothing to say that after any point, if that does not work, they cannot give notice and go through a legal process to get divorced. Why should artists tied to record labels, often at a very early stage of their career when they often do not have sufficient advice and support, be tied to a contract for more than 20 years if they do not choose to be? Just as record companies can renege on the contract after however many records have been produced, it is right that after 20 years any artist should be able to do so.
Could the hon. Lady explain to me a practical point on this? If one particular artist were to give notice, that would then mean that the piece of music could not be broadcast or used in streaming. What would that mean for all the other artists performing on that track?
I do not think the basis for the hon. Gentleman’s question is quite accurate—I do not think it has that impact. I do not think a period of 20 years is an unreasonable length of time after which to be able to give notice on a contract if somebody chooses to do so.
In conclusion, there seems to be broad agreement among most hon. Members in the House today that the impact of the streaming of music and of people’s work is not fair, that remuneration as it stands is not fair, and that it would be welcome if we could take this Bill to the next stage to look at it in more detail. If that ends up not happening today, I urge the Government to look carefully at this area of legislation. Something must be done to ensure fair and equitable remuneration for people starting out and moving through the music industry so that, as an old trade unionist like me would say, they get a fair day’s pay for a fair day’s work.
I begin by paying tribute to Kevin Brennan for his tireless work to bring this Bill to the House and, more broadly, to raise the profile and significance of the rights and remuneration of musicians in Parliament and beyond.
How do we get there? How do we get those rights and remunerations for our musicians and creatives? How do we ensure a fair payment for artists in this age of streaming? First off, we should acknowledge that streaming has completely changed the economics of music, and understand too that streaming saved the music business. It made it convenient once again for people to consume music legally, rather than through illegal file sharing and copying, as many hon. Members have talked eloquently and way too knowledgeably about today.
The idea of every single song being legally available in one place is quite incredible. It is now commonplace, but it was a brave and innovative vision and move from Daniel Ek, Spotify’s founder, back in 2006. Streaming has significantly broadened access to music. There were 100 million new music subscribers in 2020, taking the total to 467 million, whereas back in 2015 it stood at 76.8 million. Each one of those subscribers is paying on average £120 a year, so we can see the growth and the enormity of streaming. Yes, it has revolutionised the industry, but it is worth a significant amount of money that needs to be fairly distributed among the writers, creatives and performers.
My focus today, however, is on these needs that must be addressed: the power imbalance between the artist, the record company and the publisher; the conflict of interest between the major publishers and the record companies; and the lack of transparency in the industry. Let us look first at the relationship and interplay between the three major record labels, which hold the master recordings, and the control they have over the three major publishing companies, which hold the song copyrights.
The three major record companies, Universal, Warner and Sony, own the three largest publishers, Universal Music Publishing Group, Warner Chappell Music and Sony Music Publishing, respectively. Obviously, concerns are raised about how those three publishers can advocate for songwriters’ interests if they are being controlled by their parent companies.
As a guide to how the revenue from music is split, the typical income earned by a master holder is about 80% and the typical income earned by a publisher is about 15%. Given that the major record labels own the publishers, it is in their interest to push for the income received on the master-sale side to be greater than on the writers-publishing side. The record companies, not the publishers, also do the deals with the digital service platforms so they can take the lion’s share of royalties from those songs.
To add to that, if hon. Members can believe it, there is even an imbalance in the speed of the payment. The record companies are paid much faster than the publishing side, because they control the supply chain. They take payments through an automated process, while the publishing side is paid through a more cumbersome manual process. Those imbalances, and the further imbalances that run from them, should be the focal point of policy makers and industry scrutiny.
I welcome the Government’s intervention in referring the matter to the Competition and Markets Authority. I have a couple of other helpful suggestions that might go some way to improving the relationship between artists, record companies and publishers. Songwriters and artists should have a direct seat at the table in the remuneration discussions and should be represented by their peers, not the record labels or publishers.
A music stream should be treated as a licence, not a sale. A licence gives the artist 50% of the royalties for a song, whereas a sale gives them between 18% and 30%. Since streaming became the main mechanism for consuming music, record companies have unilaterally decided that a stream should be considered a sale, because it maximises their profits. Artists and songwriters need to update clauses in their contracts to reflect the true nature of how their songs are consumed, which is via a licence.
Clarification also needs to be introduced to the grey area of breakage in record companies and digital service providers. A streaming is not included in any detail in most agreements and breakage is not subject to a contractual method of distribution. Confirmation is needed that all income gained in that way by major record labels is distributed fairly and appropriately. Some have even suggested a kitemark.
On the lack of transparency, for an artist to understand their payslip or royalty statement, they need to be shown two key things: how many units they sold and how much each unit sold for. If an artist wishes to inquire about the real level of sales, they will need an audit which, at the moment, is incredibly expensive and can take about 24 months to book and complete. That is not how payslip querying should be. The artist never gets to see the total amount that has come in. An online seller of goods would know the gross amounts and what needed to be deducted for services and commission, but that is not the case in the music industry. That needs to be changed.
In a final twist, if an artist manages to get their books audited to see what is coming in from the streaming service, should they ask for back-up information—in the old days, they could get the cost of CDs and how many copies were sold—in this instance, from streaming, that is covered by a non-disclosure agreement that removes the right to see how the money flow comes in, because companies say that it affects their ability to be competitive. Such things need to be changed.
Writers and artists are businesses, entrepreneurs and inventors who have created a product. We have to be on the side of those creatives and musicians, because they deserve their full dues. As Julie Elliott rightly pointed out, covid shone a spotlight on the area. In the past, artists could go out and earn extra money by performing at live events, but they could not in covid. They relied more heavily on what was coming in from streaming, but there was nothing there to rely on. Many of them have been left without income for a considerable period, and have therefore turned to the state for support.
It would be remiss of me, as a former Secretary of State for Work and Pensions, not to ask this question. Why should the taxpayer pick up the bill for the international giants who are not paying their contributors, creators and writers correctly? That is wrong. We might have needed to provide some extra money through universal credit, and that would be right, but these international companies should have paid their way and not asked the British taxpayer to pay those wages on their behalf.
There are many reasons—and I say this from a Conservative point of view—why we have got to get this right. These are points of principle. We do not believe in monopolies controlling an industry; we do not believe in supersized entities at all, whether they are the state or giant companies, and nor do we believe in imbalances in negotiations or conflicts of interest. However, we do believe in a fair deal for the taxpayer, and for the Exchequer too—money should be coming into the Exchequer to pay for all the public sector services that we need—and we believe absolutely in the rights of the individual. We need to stand up for these people.
It has been argued that the record companies must spend vast amounts of these artists’ money to pay for new artists. That is questionable, if not risible. Any other business that saw such a failure rate in the new products it was bringing to the market would look at its business model and ask, “Are we getting this right?” That is particularly relevant in an age when we can spot a star by looking at the number of followers on Instagram, YouTube and various other platforms.
Moreover, the companies are reducing the money of artists who have done well. They are spending the money of artists to whom, I would say, they owe a duty of care because they have contracts with them—contracts on which they embarked on a potential, hopeful, going-forward basis. Surely the artist to whom they owe that duty of care must come before the potential artist.
I would also throw in an auditor for these companies’ books. If they are reducing profits from their artists, on their own books, that means that they are reducing the amount of tax that they pay to the country.
My right hon. Friend is making a brilliant speech, but I am less convinced by that last point. The system does work on the basis of “blooding” a vast number of artists, and there is no business model in existence that can accurately predict who those people are. I take on board many of the points that my right hon. Friend made so well earlier in her speech, but we need to ensure that the funding and the machinery are there. Pete Wishart said he accepted the model whereby they invest so that one’s artistry can reach a market. If we break that, we break the future for a young British artist, and we do so by rewarding the giants of yesterday who might want more money today. We do not want to cut off the future for the artist who wants to make it tomorrow.
I do not have everyone’s company accounts, but I have been looking at those of Warner Music Group, and in particular at the amount that it is spending on what are described as
“Artist Repertoire costs as a proportion of recorded income”— the money that it is investing in going out to find those new artists. I note that in 2017 the figure was 31.92%, and I am sure my hon. Friend will be surprised to learn that it went down in 2018, 2019 and 2020, to 30.13%. The amount that Warner Music Group says it is investing has gone down. As I said earlier, should these companies wish to identify an artist who could flourish, it is much easier to do so than it was 10, 20 or 30 years ago: they can see what an artist’s following is online.
I end with a couple of questions for the Minister. Will he update the House on what is happening with the Competition and Markets Authority? When will we know the decisions and conclusions? Could he refer the legal contracts and this conflict of interest to the Law Society for investigation? It is time the record companies recognised the unjustifiable imbalances between the revenue they receive and the revenue received by artists, and adjusted their models to better account for the growing popularity of streaming services. For that reason I will be supporting the Bill today.
I start by congratulating my hon. Friend Kevin Brennan on his campaign and his very effective speech, which highlighted his deep expertise on this issue. It is important that we pay tribute to his talent, as seen in his solo work and in MP4, of which there are several members here today and which has brought much entertainment both inside and outside the House. It is great to see the talent of Members of Parliament on display in different ways, connecting with the challenges that many of our constituents also face.
We have heard some excellent contributions from both sides of the House, and I will build on the comments made by my hon. Friend Julie Elliott, the hon. Members for Watford (Dean Russell) and for Perth and North Perthshire (Pete Wishart) and the right hon. Members for Maldon (Mr Whittingdale) and for Tatton (Esther McVey), who illustrated how, although there are many complexities in the debate, there is a common thread and the House recognises the depths of the issues. The question is how we move forward, not whether we move forward.
The UK has a special and unique place in the history of popular music. Our music industry is globally renowned and is an important part of our cultural offering to the world. To support the industry, from new artists to global artists, we must ensure they are part of a fair system and that they have equal bargaining power to enable them to flourish and to make sure we support a new generation of British talent to come forward and create new music.
British music has taken its inspiration from jazz, blues, gospel, rock and rap from Asia, Africa, Latin America, the USA and around the world, and it has given it a distinctly British twist to give new types of music to the world. The Beatles, the Kinks, Oasis, Blur, Adele and many more provide the soundtrack to our lives and the defining songs of our popular culture. Whether it is ska, Afrobeat or bhangra, music has benefited from immigration into the UK.
Down the decades, the music industry has contributed billions of pounds to the Exchequer, both in domestic sales and in exports, yet the industry has a dark side, a history of exploiting artists and ripping off the musical talent on which the whole industry’s success relies. The 1960s gave us some of the greatest bands, but they also gave us the sharp managers who invented new ways to rip off talented and often working-class youngsters.
Bands such as Small Faces powered the swinging ’60s, but they never saw the money they had earned. The recoupment deal was born when artists were working to pay the music companies, not the other way around. Of course musicians, often young and ambitious, might quickly sign away their future for the sake of a record deal. It is a form of exploitation, it is about imbalances in power and it is unfair.
I pay tribute to Tom Gray and the #BrokenRecord campaign. He is a talented musician and composer, and a worthy recipient of the Mercury music prize with the band Gomez. He has deployed his organisational and persuasive skills to help highlight the issue of performers’ rights and remuneration. Tom has worked so hard along with the Musician’s Union, the Ivors Academy, my hon. Friend the Member for Cardiff West and others to highlight the broken music market.
Labour supports the Second Reading of the Bill, which aims to address the unfairness in how the remuneration system treats musicians for their work on streaming platforms. In April, the campaign that is the backdrop to the Bill saw more than 150 musicians, artists and songwriters write to the Prime Minister to ask him to fix streaming and put the value of music back where it belongs: in the hands of music makers. The Bill would do that by placing the treatment of revenues gained from music streaming services on a common footing with revenues gained from other sources such as physical music sales.
As hon. Members have said, over the last 18 months musicians’ livelihoods have been shattered by their inability to perform live at gigs, concerts, festivals and shows—or even in the recording studio. We have also seen the disappearance of licensing income for artists as pubs, clubs, restaurants, hairdressers and so on have been forced to close. There has also been real destitution for session musicians, stage hands and the many trades associated with the music industry.
The Musicians’ Union is right to say that the last 18 months have highlighted the importance of streaming as a way for musicians to earn a living. As my hon. Friend highlighted, streaming has created huge opportunities for musicians. Let us be clear, however, that a fair income for musicians was a deep problem before the pandemic. It is also a classic example of technology outstripping our legal framework and of how it works to profit a few and exploit the many. It is the House’s duty to modernise the law to reflect the reality of the music industry and challenge the status quo whereby most streaming income—an estimated 55% of it—ends up in the pockets of record labels, streaming platforms and digital giants while 15% goes to artists and publishers. That is compounded by the imbalance, highlighted by the right hon. Member for Tatton, in the speed of payments.
The Bill would give effect to certain recommendations in the Digital, Culture, Media and Sport Committee’s July report, “Economics of music streaming.” I pay tribute to the Committee for its forensic work on this issue. The Bill would update the law on performer, composer and songwriter rights to reflect the changing landscape. My hon. Friend the Member for Cardiff West laid out clearly why that is needed. When an original music work—or lyrics accompanying music—is created, the composer or composers of that work have rights under the 1988 Act to control exploitation of that work. Composers and performers may transfer the administration of those rights to a collecting society, which addresses the exploitation of members’ works on a collective basis and charges those who use their works. Composers and performers may transfer their rights to receive revenue from the exercise of making available rights to third parties such as record companies and publishing companies. Their entitlement to receive a share of that revenue is determined contractually.
With the change in consumption patterns, music streaming now accounts for the predominant part of the UK music industry’s revenue. However, it is suggested that about eight out of 10 performers earn less than £200 a year from music streaming. Performers have a right to authorise and control the making available of a work on which they have performed to the public via radio or television, for example, or music streaming. However, while performers are entitled to equitable remuneration for performances for radio, television and other channels, they are not in respect of music streaming due to the exceptions set out in the 1988 Act. The predominant part of income therefore typically remains with the person or persons to whom the performer has transferred their rights.
Composers and performers also do not have a general right to receive information on how their music has been used and on the revenue that it has generated from persons other than collecting societies. Further, composers and performers often enter into contractual arrangements for their work to be exploited at a very early stage in their careers, often without the benefit of legal or other advice. Such arrangements can be long term, and can result in the transfer of rights to those seeking exploitation. The Bill seeks to address those inequalities in bargaining power and rights.
Labour recognises that music streaming saved the recording industry over a decade ago, when piracy threatened the fundamental basis of copyright. Those issues were alluded to by the right hon. Member for Maldon. As with other areas of technology, the streaming market has little or no competition, which allows oligopolistic behaviour from platforms such as Spotify. The inquiry by the Digital, Culture, Media and Sport Committee exposed the inequity at the heart of the new global market in music streaming. We support Second Reading, but we know that the chance of that leading to meaningful change is slim unless the Government give the Bill parliamentary time. I believe that the Minister is listening, and I look forward to hearing what he says about how we can move forward.
We attach great value to the CMA market inquiry, which has been alluded to by hon. and right hon. Members, into the industry. We look forward to reading the report when it is published next year, and I echo calls from the right hon. Member for Tatton for an update from the Minister about when we can expect those findings.
The Bill’s proposals are an important step forward in this debate. There is cross-party support for change, as the Select Committee report showed. The Government have promised to act, but I worry that the response to the report did not go far enough. It concluded that the issues were complex, and needed to be better understood—indeed, that is the case, and is reflected in conversations that I have had with Sony Music and others—and the Government rightly committed to assess different models, including equitable remuneration, to explore how they might affect different parts of the music industry. We need a way to address unfairness without causing unintended consequences, which is why further inquiry is required and why the Bill should go into Committee. In my view, that is the right way forward. The Government proposed to explore the issues through engagement with the music industry contact group and to provide an update on progress.
We need to move forward. As has been highlighted, a report in November showed that Lucian Grainge, chief executive officer and chair of Universal Music Group, earned more this year than composers and lyricists earned in total in 2019 from streaming downloads and sales in the UK. Once again, that brings the issue into sharp relief. I do not agree, the right hon. Member for Maldon will not be surprised to hear, with everything that he said, as there is a fundamental inequity in how the system works. That is at the heart of what we are addressing today.
The status quo cannot continue. Indeed, we want Britain to be the best place in the world to be a musician and work in the music industry, and it should be a trailblazer for how the rest of the world can be. The issues that the Bill seeks to address and fix in streaming are vital if we are to secure the reforms to copyright law that will create a fairer system for musicians and new talent to know they will be rewarded fairly. We firmly support Second Reading and I hope, given the consensus across the House that action is needed, that the Government support the Bill and keep their promise to address this injustice. If otherwise, we expect the Minister to pledge urgently to introduce Government legislation. Let this be a day on which everyone in the House sings from the same song sheet, and backs our musicians through a commitment to reform the music industry to leave it fit for purpose for the future.
It is a pleasure to follow Seema Malhotra. I wish to start by congratulating Kevin Brennan, because in bringing this Bill to the House and having it delivering this level of attention, he has highlighted what an important sector UK music is. I cannot claim to be an ace musician—my piano lessons in secondary school led only to headaches for my parents—but I have spent some 20 years working in music broadcasting. During that time, I was part of the industry working group that negotiated with music rights holders, including PPL, the Performing Right Society and the Mechanical Copyright Protection Society, to secure permission to use recorded music on commercial radio. So I am aware of the relationship of businesses that build success on the back of playing recorded music, and I see the need for rights holders to be paid a fair settlement for their work.
I wish to step back a little and pay a brief tribute to the UK music sector. Everyone in this House should be incredibly proud of British music and the contribution it makes to not only our wellbeing, but our economy. For us in this country, British music is the soundtrack to our lives, but that is true around the world, too. UK recording artists feature on radio stations and streaming platforms around the globe every second of every day, and that has not come about because we have legislated to promote our great music. It is worth noting that some countries, such as France, do legislate to ensure that their broadcasters play French music, because they want to give it an unfair advantage. We, though, maintain an interest in supporting brilliant talent. UK music’s success has come about because we allow creativity to flourish, we invest, we nurture talent and we have the advantage of the English language. Above all, we have incredible songwriters, great musicians and brilliant performers who deliver what an engaged audience wants to listen to.
Let me just set out one or two figures that demonstrate that. The UK music industry contributed £5.8 billion to the UK economy in 2019, which was an 11% increase on the prior year. Employment in the industry hit an all-time high in 2019, at 197,000 people, which was an increase of 3% on the prior year. That is not just people playing instruments and singing songs; we are talking about songwriters, producers, artists’ managers, publishers, the people in recording studios, musicians, promoters, crew, and those in record labels and collective management organisations. They are all part of an industry that supports almost 200,000 jobs, which are critical to UK plc. The total export revenue of the music industry was £2.9 billion in 2019, which was an increase of about 9% on the prior year. This is such an important sector, and it is so crucial that we treat it with care when we consider legislation.
My hon. Friend is making an extremely powerful speech outlining the importance of the music industry to our economy. Will he acknowledge that it is also a vital part of our tourism attraction, bringing in about £4.7 billion in tourism revenue for this country every year?
I thank my hon. Friend for that, as he pre-empted exactly what I was going to say next. We are talking about £4.7 billion of spending in the UK economy, which was an increase of 6% of the prior year. UK music tourism is crucial, and it is so important that we have live performances back in concert venues, pubs and locations across the UK. Our music industry is a critical national asset. It makes us feel good. It enriches our lives with tunes that get into our head and make us tap our feet, and it really does set the mood for the nation. What we do in legislation in this space could have profound implications.
What my hon. Friend has just said is so important. The music industry contributes to not only tourism and the economy, but the culture of this country. So if we rush into legislation without making sure we have engaged with every possible partner and every possible organisation, we could get it wrong and therefore have dramatically bad effects for everyone. We need to support our artists—I am very supportive of the principles of the Bill—but we have got to get it right.
I thank my hon. Friend for his intervention. We have to accept that we are talking about a global industry, and it is possible today to pick up a business and locate it anywhere in the world. If we make legislation in this country that makes it difficult to do business, we will see global businesses deciding to go and locate in other countries. My right hon. Friend Mr Whittingdale mentioned K-pop, and we should be very aware of what is going on in Asia. It is easy for international businesses to identify different markets, build on those phenomena and generate significant revenues from elsewhere in the world.
The developments we have seen over the last 20 years, from music lovers being able to walk into Our Price or HMV and buy a CD to a model where they can have any sort of music instantly available on their phone simply by saying the name into a smart speaker, have changed the game completely and in a way that most of us could not have imagined 20 years ago.
This private Member’s Bill follows on from Parliament’s inquiry into the economics of streaming. At a base level, it seeks to alter the artist-label relationship through copyright law reforms to rights ownership and how revenue stemming from an artist’s recording is shared out. Actually, the way in which streaming moneys are split between an artist and the label or distributor they work with on their recordings is entirely dependent on how each individual record and distribution deal is reached. The artist could receive anything from a few per cent. to 100% of the money they generate. That is based on the contract they sign when they enter into business.
Although the Bill raises some critical issues—I support action on many of the themes that have arisen in today’s era of streaming—some unintended consequences may arise from it. Those need to be discussed because, although I want to see change, I also want to ensure that future generations of British artists receive the investment that they deserve. On the back of the Select Committee inquiry, the Government are already working with the sector to assess the market for all stakeholders through the Competition and Markets Authority, the IPO and DCMS, and I look forward to hearing what the Minister has to say shortly.
We need to have a data-driven and evidence-based approach to such a complex and important issue. The arguments that underpin the Bill are emotionally compelling, but I am afraid that they incorrectly play on the David versus Goliath narrative. I have seen headlines saying that artists are not earning from streaming, but streaming has actually provided artists with greater success than the CD era. The shares of label revenue that artists receive are higher than they were in the past. Artist remuneration has risen to 46% of overall revenue, compared with an increase in label revenues of 31%, meaning that artists are claiming a larger share of streaming revenue than they have done traditionally.
Other terms have also improved in the artist’s favour, including sharing equity in streaming services, digital breakage and writing off unrecouped balances, as well as royalty rates increasing. Pete Wishart—I want to refer to him as the hon. Member for Runrig—said that one of the challenges he faced was that his unrecouped revenues were never reached, so he never earned any money. Artists are talking action on that, and I am pleased that they are being listened to.
A study of musicians’ pay by the IPO showed that between 2008 and 2019 artists and composers have seen their earnings rise faster than those of record labels. The intentions behind the Bill do not reflect those advances, and are not supported by the robust data and evidence delivered by independent academics in the IPO’s recent report.
The set of legislative proposals included in the Bill, although well intentioned, could actually harm the very model that has underpinned the industry’s renaissance. The focus needs to be on securing better deals with streaming companies. I was really struck by the comments of the former CEO of EMI Records, Tony Wadsworth, who suggested that if Bill were passed today,
“these proposals would create huge uncertainty, a mountain of red tape and make the U.K. a terrible place for investment in music.”
We do need to do something, but that something needs support from across the sector. I would argue that we need to see the outcome of the investigations by the CMA before any changes in the Bill are actually brought into force.
In business, and particularly in the music business, I am afraid that we see a need for instant gratification and success, and music labels are the only players that can tackle that. Their long game is what is really critical. We need to take their views seriously and recognise their concerns about this Bill. Successful artists from the 1980s funded investment into new artists in the 1990s, which in turn funded investment into the young artists of the 2000s. Artists such as the Pet Shop Boys, Radiohead, Robbie Williams, Coldplay and many others were supported by that investment in their early years, and that music ecosystem will continue to support music artists in the future.
Labels will continue to invest huge amounts each year in emerging talent through artists and repertoire, the music industry’s equivalent of research and development. My right hon. Friend Esther McVey indicated earlier that the amount of money being spent could be cut. I suggest to her that if we look at the music business around the world, 30% R&D is what is happening in all markets. I am afraid I do not see that changing any time soon, because if businesses could find a way to reduce that, I think they would; it would be an incentive to businesses to be able to reduce it at an early stage.
However, there is no denying that the new cast of characters in the market, such as Spotify, Apple Music and content platforms such as YouTube, have changed the game. When physical sales were king, the top 10 artists were twice as dominant in earnings terms as they are now. With streaming, considerably more new talent can build up a real fan base, while popular established acts are able to find new audiences and become timeless.
I am not suggesting there is nothing to fix. Music is being devalued and musicians’ earnings are being impacted. Ad-funded streaming services are not paying fairly for the music that drives their business, and that is an issue we should absolutely tackle. YouTube accounted for more than 20% of streaming consumption in the UK last year, but generated only £35 million in royalties, £20 million less than artists and labels earned from good old-fashioned vinyl records. The question we should really ask is how such services can get away with paying so little.
The market is by no means perfect but, unlike the giants of free content, subscription-based streaming services enable more artists to share in the money they make from music. In my view, the contemporary music landscape is much wider, and I fear the Bill will harm chances for newer and more diverse artists and businesses that have either escaped the old-world paradigm, or grown up in the newer, more open ecosystem in which many businesses flourish today.
I turn briefly to the term “equitable remuneration”, which is often used. I make no bones about this: I am afraid equitable remuneration will not mean fair payment in the sense that it is commonly understood. I have heard a number of hon. Members on the Opposition Benches talking about fair pay for a fair day’s work. I am afraid equitable remuneration will not deliver that in the sense that they perhaps believe it will.
Analysis by the Association of Independent Music suggests that applying ER to streaming will not address income inequality in music. In fact, the top 1% will get richer at everybody else’s expense. There is an argument that ER favours the old world over the new, or artists who have had success in the CD era and before over the new generations of diverse creators and entrepreneurs who are succeeding in the digital age. I want to see all artists rewarded fairly, but we need to create that environment when we have all the information to do so.
The industry would not know whether it would have 70 years or 20 years in which to recoup its investments if the Bill moved forward, because of the flexibility it would allow for contracts to be terminated. That would have a major influence on how much labels would be able to invest in new signings, new recordings and marketing, and on the terms they would offer in new deals.
As Julie Elliott said earlier, there are some practical problems for multiple performers, where revocation by a single performer would prevent continued commercialisation of a record. I recognise that when she responded to my question, she said there was much more to look into in that particular area, and I suggest that that is a real-world problem that the Bill does not necessarily address.
As I said earlier, I believe we need to see changes to fairly reward artists and grow the music sector in the most effective way to benefit artists. The UK is the second biggest exporter of recorded music in the world—one in 10 songs streamed globally is by a British artist—but I am afraid that the Bill would put that model at risk. The legislation would seek to only hasten the decline if large labels decided to invest more in overseas territories than in the UK. On that basis, I urge the Minister and DCMS to do more work before we take the Bill forward.
Mr Deputy Speaker, being from the land of song, as I am, I am sure that you would have enjoyed the reception last night that my hon. Friend Kevin Brennan hosted with musicians. We heard the beautiful voice of Sarah Angel and many up-and-coming and existing artists and musicians were there. Being from Swansea, I know many up-and-coming artists there too. The important point that is coming across is that although some of them have been successful in the past, they look to the future with fear.
The up-and-coming ones are saying, “Hold on, if I get 1 million streams, I’ll get £100—but what about the cost of my travel, the studio or having lunch? Maybe there’ll be musicians with me, or maybe I’ll co-produce or co-write a song, so I’ll get just half that, but I still have to pay those costs. It doesn’t work.” We have just gone through an appalling pandemic, so people in the music industry who are atomised freelancers and self-employed have not been able to enjoy the fruits of live gigs. Instead, they have depended on the meagre crumbs off the table of the industry to survive with great difficulty.
We have heard about Spotify and other platforms such as Apple, Amazon and Google, and how marvellous it is that we can carry the world’s music in our pockets. That is true, but most people probably consume the equivalent of only 12 albums a year on their Spotify account and just play their favourite music again and again. If those had been 12 CD sales instead, the artists would have got much more. We are in a situation where, although we have great scope for choice, that choice is not exercised. It is important that artists get their fair share to nourish them for the future.
I know that the hon. Gentleman will have read the IPO’s report, so he will have seen the chart showing that at the end of 2015, about 16,000 artists made up 90% of Spotify’s streams. By the second quarter of last year, that number had gone up to 43,000, so the market is much more fragmented. That extra choice is great for consumers, but it means that the income is being shared by far more artists than ever before.
I will come to the right hon. Gentleman in a moment, because no doubt he will want to remind us how reasonable it is that the CEO of Universal gets £153 million a year, which is more than the entirety of sales and of streaming for all UK artists and songwriters, including people such as Ed Sheeran. To get that from streaming, as I mentioned, he would have to have 1.5 million million streams. Despite the claims that he does play a musical instrument, I doubt that he could create that. On that point, I give way.
The hon. Gentleman makes a great deal of how little an artist receives for 1 million streams, but in fact, 1 billion streams is not that much. To give an example, Mabel, one of our most successful up-and-coming artists achieved more than 4 billion streams. The income from 1 million streams is equivalent to the income from 1,000 CD sales. CDs do not cost a huge amount, which is why many artists do not receive a great deal of income, because they are not being listened to in the quantity that generates the large incomes that successful artists enjoy.
The point I was making is that the share that is given to up-and-coming musicians is not enough. The right hon. Gentleman may claim that 1 million streams is not very much, but I would very much enjoy a small fraction of that for this speech anywhere it was shown. It is a lot for a musician to break through that million mark. I appreciate that, in the global marketplace, there are stars who break through into the billions, but that is not the point. The point is that we in Britain should be nurturing our young people to come forward as composers, artists, performers and song writers. If they are going to have the facility to invest in their own skills, equipment and song writing, and if we are to have a situation where we have a broad diversity of people and the future music industry is not completely reliant on people with rich parents, we need to give due reward on streaming to those people who will create the joy and music of the future.
There are new opportunities—TikTok, YouTube and so on—that did not exist in the past for people to express themselves; it is not the case that someone cannot possibly achieve everything without a label and therefore they need this immense amount of money. As was briefly mentioned, the managing director of Universal does not pay British tax, but in addition, the way the finances are managed is such that some artists are paid in dollars and the Exchequer here does not see the fruits of British production, which we should enjoy as well as the artist having their due rewards.
The fact is that music is integral to Britain’s identity here and abroad, whether we go back to the Beatles, the Rolling Stones and Annie Lennox or look at what we have now in Adele, One Direction or whatever. The point has been made already about the hundreds of thousands of people in the industry and its importance for the export and tourism markets. I think we are duty bound to feed the people who are the creative engines of that success, and not to allow it to be sapped away through blood-sucking multinational corporations that hide the tax and keep the revenue and exercise market abuse and dominance in an atomised market of well-meaning people who, in their younger years, often sign contracts without the privilege of a huge legal team behind them to give them cover, so if they are fortunate in being successful, they find they are ripped off by these big labels and then are unable to go back and look at that contract again. Many of those contracts, of course, contain non-disclosure agreements, so we do not really know what is happening.
In a nutshell, we are talking about an industry of a collective of people who provide joy, happiness and exhilaration for the globe as well as Britain, and they have done so particularly during the pandemic, which has been so valuable for people’s mental health. It is important that those artists also have remuneration into the future; they should be able to plan for their retirement. I therefore agree that there should be a cut-off clause for contracts.
The Bill should progress to Committee stage. There has been a lot of debate, and that is a reason for it to be considered in Committee. It is all very well saying the issue should go to the Competition and Markets Authority. It should have gone to that authority; this is clearly an oligopolistic abuse. There is a case, of course, for artists to form themselves into a co-operative situation. It would be good if there were alternative forms of retail, through a sort of “good” music brand, so that we could move forward.
This is a first step that we should not resist because we are bombarded by the vested interests of the massive labels, which make billions of pounds while our people, who we want to nurture, are not getting a fair deal. We do not want these springs of creativity to dry up, so we need to move forward now and, in parallel with that, we need to look at the market abuse. We must continue on an iterative basis to improve the lot of up-and-coming and existing people in this great music industry of ours, hold our head up high and get back to the global No. 1 in the charts.
The Minister has indicated that he would like to make a contribution at this moment in time, but don’t worry—the debate then can continue after the Minister.
It is a great pleasure to be here today. Is not this a wonderful example of what Fridays are for—a proper cross-party debate that tackles a serious issue? I pay tribute to Kevin Brennan and the Select Committee for their substantial report in the summer; I assure them that I and officials in DCMS and the Department for Business, Energy and Industrial Strategy have read it carefully. Indeed, it is because of that report that we are having this debate today.
I pay tribute to all colleagues who have spoken so far. I know that more want to speak, but I wanted to take this opportunity to set out the headlines of the Government’s response for Opposition Members before they decide to respond. I cannot pay tribute to everyone who has spoken, but I particularly want to mention: my right hon. Friend Mr Whittingdale, who is a former DCMS Secretary and was a distinguished Chair of the DCMS Select Committee, whose comments were important and well noted; and my hon. Friend Andy Carter, who demonstrated his experience in the industry. I also thank a whole range of voices to which I have been listening carefully. The tone of the debate has been extremely welcome, and I pay tribute to the hon. Member for Cardiff West for bringing the debate to the House in that way, with this level of cross-party engagement. It is all to the good and this is what the public expect us to do on a Friday in private Members’ business: come together and tackle key issues.
I am responding on behalf of the Government as Minister for Innovation at the Department for Business, Energy and Industrial Strategy, and Minister for copyright and intellectual property, which is what the Bill before us actually amends in law. I am here as a member of a Government who are taking this issue seriously, especially through my Department working closely with DCMS.
One of my primary responsibilities is for innovation across Government, so I want to put this issue in the context of the broader opportunity for digital innovation in the economy, including through the deep digital technologies of AI, quantum and such technologies, which I am looking to support through our science and innovation budget. We should also look at this issue with reference to the role of important digital clusters—the gaming community and others—that are driving innovation in medical technologies and a whole range of other parts of our digital economy. Indeed, earlier this summer, I took the Big Tent Foundation to Coventry, where we were joined by the Secretary of State for BEIS, to celebrate the work of the often unseen digital entrepreneurs in the gaming cluster, who are not often seen in the newspapers, but who are driving huge investment, innovation, and opportunity for people to engage in the digital economy.
It was for that reason that yesterday at the levelling-up Cabinet committee, we had a long conversation about the importance of the digital creative sector in supporting opportunities around the economy. Many of our now most celebrated digital and technology clusters started with strong cultural, artistic and musical elements. In fact, silicon valley started in the ’60s as a home for non-conformist, free-thinking, fresh-thinking entrepreneurs, before the term was really widely understood. It was the lifestyle, the surfing and the music that laid the foundations for what is now the world’s greatest technology cluster. Similarly, in Cornwall we are seeing the merger of lifestyle and recreation tech entrepreneurs linked to surfing and music. Music is not just in a silo.
I am also here in a personal capacity. My family has substantial interests in the industry, although I am not declaring commercial interests, as I have none myself. My brother works in the film industry, where people are better paid. It is a bit feast or famine. When there is a film, people tend to get paid pretty well, and between films it is a bit famine-ish—but they are paid well in general. My wife is a theatre director. People in theatre are paid rather less well than in film, although many of them sometimes work in films, if they are lucky.
In our house, we have a lodger who is a family friend. He is a nocturnal entrepreneur —I see him only at the beginning and end of the day—and I asked him the other day, “What are you doing upstairs?”. He is a digital music entrepreneur, making music at night. I asked him how the streaming sector is working. His response was very interesting and I want to share it with the House, as he said: “If it wasn’t for Spotify, no one would know me. I’m using the streaming platform to get noticed. I don’t make any money out of it, but what happens is that people then pick me up on TikTok, they pick me up on Instagram, they then reach out and message me.” He said, “I’m now selling cassettes”, at which point I looked at him! I am old enough to have had a collection of cassettes—indeed, when I bought my last car but one I was worried that there was not a cassette player and what I was going to do with my old cassettes. Then I had the same problem with my CDs. I looked at my lodger and said, “Cassettes?” and he said yes. As colleagues around the House more knowledgeable than me have highlighted, there is now a huge market in cassettes, as indeed there is in the renaissance of vinyl.
My lodger has used the streaming sector to create a footprint for himself, but of course what he really wants to be able to do is fill venues. When I asked, “Could you fill a venue here in London?” he said, “I could half-fill one in London, but I could fill 10 venues in Los Angeles.” I think that speaks volumes about the level of global digital entrepreneurial activity going on in this country—of course, the pandemic has robbed many of our musical artists of those venue-related, event-related incomes—and highlights a lot of the issues that the Select Committee has rightly brought to the fore about the impact of the level of digitalisation in the music industry.
My headline message is that we in Government want to view this area as a creative industries ecosystem, and make sure that Britain is the best place in the world for musicians to practise, innovate and create, recognising that we are in an incredibly competitive global environment; nobody wants to pass a well-intended law that inadvertently undermines the UK’s position as a leading centre. In this debate, we need to think about the artists—in this case, the musicians—and the labels and the platforms, as well as the relationships among those three in creating a functioning, vibrant, innovative and, indeed, profitable ecosystem in which revenues are distributed fairly and in a way that leads to UK leadership.
My commitment, on behalf of the Government, is that we will take this moment, with the report and this very well presented Bill, to do what many in the House have urged us to do, which is to look quickly—not to delay, but to look quickly—at all of the issues and the impacts, and make sure that we frame a Government response that does not just deal with the immediate issue today, but means that our successors in this House in 10 or 20 years’ time say that this Parliament got it right and tackled it in the right way.
That is really about, yes, fairness. Fairness is an important word, and I think an important value that most people listening to this debate, who may not understand the complexities—and, boy, there are many—of the modern digital music streaming ecosystem, understand. People understand that fairness does not mean everybody being paid the same amount every day, which tends to lead to a communist society in which very little is to be distributed. Fairness means that people are rewarded properly and appropriately for their part in an ecosystem, reflecting the role of others and of competition. It is also about making sure that the UK remains a powerhouse in the global digital ecosystem, and in particular that our musicians, on which this Bill focuses, are properly rewarded.
I want to highlight that “musician” is one word but covers a multitude of different people—singers, bands, DJs, instrumentalists, non-featured artists, session musicians, backing singers, lyricists and composers. There is a huge range of people, and before we legislate we just need to be cognisant that we will be legislating to shape their lifestyles and their livelihoods. It is part of my responsibility as a Minister to make sure that we listen to all of them, even those who are not so noisy, and make sure that, before we change the law, we are cognisant of any unintended side effects. We need to make sure that all musicians are benefiting from the UK legal framework, and not just be pushed by one group without being cognisant of the effects on others.
I also want to highlight—indeed, I did not know this before preparing in the last two or three weeks for this debate—how musicians actually make their money. If we look at the data, we see that, at 31%, live performance is the main revenue stream. That has of course been hit very hard by the pandemic, which is what has brought this issue to the fore. Then there is teaching of music at 9%, audio streaming royalties at 6%, physical sales at 5%, digital sales at 5%, sessional orchestral work at 5%, broadcasts at 5%, public performances at 4%, commissions for stage at 3%, merchandise at 3%, video streaming royalties at 3%, and a whole raft of others. The truth is that there are multiple revenue streams for most musicians, and some of course only receive some of those, but we need to be cognisant of the broader musician revenue stream, and indeed of how complex it is, before we legislate.
When a song is streamed on a service such as Spotify, revenue from that stream flows through a streaming value chain that has taken shape in the past few years. At the start, the streaming service takes its cut, which is typically around 30%, although there is no industry standard, and the rest is split among all the other parties back down the supply chain. People’s ability to negotiate depends, of course, on their strength in the market. I dare say that if I produced a piece of music, my negotiating power in the market would be very weak, whereas the band led by colleagues here in the House have established that they have an audience and a market. I pay tribute to their work in not only using those revenues to support charities but in highlighting issues in the House.
It is and should be a competitive market. I think we would all accept, as people who make their living on their feet, speaking to issues, that if we went to Hyde Park corner, some of us would attract bigger audiences than others. I do not think we would pass a Bill that compelled the public to listen to us all for the same amount of time with the same level of interest. We cannot legislate for that and we all know that. We do, though, want to make sure that successful artists who generate quality music are rewarded properly.
We accept that there is a problem and we accept the fundamental case made by the Select Committee. We have already started by launching the Competition and Markets Authority. The industry is very vertical, if I can put it that way, and we want to make sure that the revenues flow fairly and there is no anti-competitive practice. We are also looking, through the Intellectual Property Office, at how other countries have done it: there have been a number of reforms around the world and we want to be sure that we have collected the data on any reforms that have worked positively for musicians across the board and on those that have had negative effects.
In the past two weeks, I have had extensive meetings with the hon. Member for Cardiff West, in a positive spirit, and with colleagues on the Government Benches, including my right hon. Friend Esther McVey, and around 40 or 50 other colleagues who have taken interest. I have also taken the time to meet people in the industry.
Before colleagues decide how they wish to proceed, they should know that views are very mixed. I have had 50 submissions this week that I was reading late last night. The Association of Independent Music accepts the Select Committee’s case that there is a problem, but does not accept that
“the solutions this Bill proposes will lead to the outcomes its supporters hope for—and the Bill risks damaging independent music” by making
“the UK a less attractive place to invest and record”.
The British Phonographic Industry said:
“The Bill is premature in rushing to a legislative solution before the market impact…has been properly explored”.
We have had submissions from a huge range of hugely creatively and entrepreneurial UK labels. I will not even begin to read out the whole list, but I have here a letter with at least 20 logos on it. In November, a group of them wrote to the Prime Minister: “We are writing as a group of British independent record labels concerned about the unintended impact”—I do not think anybody has any doubt about the intent behind the Bill or, indeed, the Select Committee’s work behind it—“on our industry of the copyright Bill that is due to be debated in the House”. They urged us not to accept the Bill quickly as it is written but to take it as a spur, as the hon. Member for Cardiff West himself urged, to do the necessary research.
Jeepster Recordings, which is based in Hackney, wrote to Ms Abbott to say:
“I am writing to you from Jeepster Recordings in Stoke Newington. We are an independent record company based in your constituency. We began in 1996 and have a very small creatively successful back catalogue which includes the early Belle and Sebastian and Snow Patrol albums…We have deep concerns about the impact of this Bill on the future of our business and feel that there are parts of it that, if approved, will destroy a business we have managed to keep going for 26 years…As with a lot of small labels, we invested a large amount of money in our artists and struggled as a company at a financial loss for several years whilst promoting them in a market skewed in favour of the major labels”, which is the point that the Bill seeks to tackle.
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. 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.
There is huge interest and real concern across the House about getting this right. Often the House comes together like this on an issue, but then somehow in the Government it goes into the sidings. Can the Minister reassure all colleagues across the House who want to see action that he and the Government are committed to taking it forward energetically?
I am grateful to my hon. Friend, a distinguished Back Bencher and former Minister, for raising that point. I myself have had private Members’ Bills, including ten-minute rule Bills, adopted by the Government; I have withdrawn them on the basis of an undertaking from the Minister. I have spoken to the hon. Member for Cardiff West, and obviously I understand that he wants to make his point, but I ask politely at the Dispatch Box, for the record, whether he might be prepared to withdraw the Bill today, work with me on tackling the measures in it, and bring it back in due course if he feels that the measures that I have put in place are inappropriate.
I thank the Minister for the approach that he is taking. We have discussed the matter before, but I think that it is important for the Bill to have at least a chance to proceed into Committee. This is a long process, as he says, and the Government control the timetable, so my view is that the Bill is a bus that he could reupholster along the road to make it fit for purpose so we can all agree on it, and that the House should have the opportunity to express its opinion. I know that he understands that.
I totally understand that the House will want to have a chance to express its opinion. The hon. Gentleman knows well that the private Member’s Bill process is not an ideal process for us to do the work we need to do in government. We have launched the Competition and Markets Authority work and we have a series of workstreams that I will describe in a moment. I would like to think that over the next few months—
I appreciate the positive narrative that the Minister is giving to the Bill, but I am very concerned about what he said about Spotify and by the sense that Spotify offering exposure to musicians ought to be enough so that they can go and make their money elsewhere. Surely there should be a real commitment that there will be a fair relationship and these major, powerful organisations will offer more than just exposure.
As I think the record will show, I was not actually suggesting that that in itself is always enough; I was just making the point that Spotify and other streaming services have provided a platform for many artists who would not otherwise have had a chance to acquire any following. The hon. Gentleman is right that we need to ensure that revenues are flowing fairly, which is why we have launched the Competition and Markets Authority work. The Intellectual Property Office in my Department is looking at other countries and we have set up a number of taskforces, which I will describe.
Before the House decides whether to force the question whether the Bill will proceed, I want to answer the point about our commitment.
Concern has been expressed on both sides of the House about the value gap issue, which relates particularly to YouTube versus some other streaming services. In its response to the Select Committee, the CMA said that while it recognises that issue, at the moment it does not think that it should fall within the measures that it takes through the digital markets unit. Will the Government’s examination take into account concerns about the value gap and the proportion that is being taken by the platforms?
I am delighted to give that undertaking. My right hon. Friend makes an excellent point. We will be looking not only at the CMA’s specific remit on competition, markets and anti-competitive practices, but more broadly at the value chain. We need to make sure that there is a proper ecosystem; not everyone will be able to get equal remuneration, but we want to make sure that the market is working and is fair. Yes, we will be looking at that.
Yes, I was just coming to that. We have already started work through the CMA, the Intellectual Property Office and the taskforces that I will describe in more detail in a moment. The Secretary of State for Digital, Culture, Media and Sport and the Department for Business, Energy and Industrial Strategy have agreed that 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. 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. However, our instinct is not to rush to introduce a private Member’s Bill to solve the problem, however well intended the measure, but to do the work and come back quickly to the House with a set of proposals. If that suggests that we need to make legislative changes, we are open to doing that.
I shall begin to set out the specifics of that work and what we are doing, and make it clear that the point about fairness that has been made by colleagues across the House sits at the heart of that. We want a fair streaming environment in which the UK music industry can thrive and artists are properly rewarded. Fairness is a broad concept, and one to which we can all sign up, but it has many different aspects in this complicated industry. The Bill proposes a number of specific measures aimed at making the streaming environment fair, which we think is a laudable aim, but it is simply not yet clear that the impact of all those measures has been fully assessed or whether there are others that do not require legislation but which might have a similar impact. We have not ruled out legislation to introduce any of the measures in the Bill or indeed others, should our work suggest them, but we are concerned that interventions such as this made at pace could have—and, indeed, we think would have—significant consequences across the industry, as the correspondence that I have flagged has indicated. We do not want to cause a crisis of confidence in the UK digital music sector, and cause a disinvestment, creating a bigger problem by moving too hastily without taking the chance to listen to all those who have a stake.
We have to get this right in a complex ecosystem and supply chain. The first step is to gather proper evidence from all of those who have concerns before deciding what Government action we will take. If the hon. Member for Cardiff West, a distinguished former Minister, was in my shoes he would be saying something very similar. To that end, we have commissioned research, as I say, into a number of measures from the Competition and Markets Authority and the Intellectual Property Office, and we are liaising with industry stakeholders. 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. 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.
In spring this year, we will consider all the evidence that we receive and will think through how we need to respond. That will include consideration of measures on all the elements in the Bill: equitable remuneration, contract adjustment and the right to recapture works, as well as other possible market interventions. I want to make it clear that I am working closely with the Minister for Media, Data and Digital Infrastructure and, indeed, the Secretary of State for Digital, Culture, Media and Sport, who is a distinguished author and has a strong understanding of the issues of royalties, as well as the Secretary of State for Business, Energy and Industrial Strategy. Our aim is simply to ensure that the UK is the best place in the world for musicians to come and practise and find audiences globally, and to harness the benefits of digitalisation, because we have created an ecosystem that is fair, innovative and competitive, both for individual artists and for the UK. To do that, we think that it is right to consider these issues sensibly and properly, as one would expect a Government to do.
This week, I have spoken to about 40 colleagues, and I have probably heard another 40 today. It is great to hear from colleagues from all parts of the House. Even the Scottish nationalists have paid tribute to the Government’s listening on this, which is a nice thing to hear. I attended the Government’s music stakeholder contact group on Wednesday, and heard the views of 11 stakeholders. I am grateful to them and to others who have contacted us this week with their thoughts. I have had a constructive meeting with the hon. Member for Cardiff West, who—I want to pay tribute to him again—is a passionate advocate. We would not be having this debate if it were not for him and colleagues on the Select Committee.
Interestingly, today is the birthday of Ozzy Osbourne, the former lead singer of Black Sabbath, who, through the power of music, overcame learning disabilities and a difficult upbringing to become one of rock’s elder statesmen. That speaks to the power of music, not just to give us all joy but to create opportunities for people who might otherwise struggle. Today is also the anniversary of the release in 1984 of Band Aid’s “Do they know it’s Christmas?”. It is a day that I will never forget, because I played football for 24 hours, listening to that one track. It is ingrained in the very DNA of my subconscious as a result.
This is a good day. I also reflect that this is not the first time that the House has considered the issue. I am old enough to recall Tim, now Lord, Clement-Jones’s Live Music Bill in another place, testing parliamentary support on more than one occasion before the then Government were evidentially satisfied that they could support a version of the Bill becoming the landmark Live Music Act 2012. It is worth recognising that we are not the first group of parliamentarians to consider this issue, but the pandemic has revealed the urgency of our dealing with it. That is why I have given the response that I have. Let me be clear that the Government do not rule out legislation; we are just not prepared to rush to adopt a private Member’s Bill without working with all stakeholders, including the hon. Member for Cardiff West. He may want to force a vote, but I hope that he hears my commitment in good faith to work downstream.
The key is evidence-based policy making—and, Mr Deputy Speaker, you would not expect me, as a science Minister, to believe in anything else. These are far-reaching measures for which the Government must build the evidence base so that we are satisfied that what we propose is right. It is also so that, in terms of transparency, people around the country can see that we have listened to all the stakeholders and taken a balanced view. To intervene now without first doing that would be rash.
The UK music industry is, as many colleagues have said, at the heart of our arts and culture sectors and, from the Beatles to the Rolling Stones and from Ed Sheeran to Stormzy, it is the envy of the world. There are also a whole lot of names who I had not even heard of but who have huge digital followings around the world. It is hard to overestimate the value of the sector.
I will share some statistics that are worth thinking about. In 2018-19—pre-covid—the UK music industry contributed £5.8 billion to the UK economy, up 11% from 2018. That suggests that the industry is in pretty rude health: it is growing and expanding. In 2019, pre-pandemic —this is quite interesting—the median reported income for musicians currently signed to major record companies was £51,000, for musicians signed to independent record labels it was £20,000, and for self-releasing artists it was £13,000.
The challenge that we all face is how we ensure that we create an ecosystem in which those hitherto unknown, often young—but not always young—independent breakthrough artists get the benefits of digitalisation and streaming to help them generate revenue in myriad ways. Sadly, the “Music creators’ earnings in the digital era” report found no evidence that there was ever a time when recorded music was the basis of substantial income for most musicians, even in the 1990s when revenues in the music industry were higher. It is difficult to compare the number of musicians who can earn a living from recorded music in the streaming era with the download or CD eras—let alone the tape era—because of the difficulties in assessing data.
One commitment I want to make to the House today is that we are looking to collect data both in the UK and internationally so that we can make policy on the basis of actual fact about the impact of reforms around the world. Of course, the Americans made reforms recently, and there have been others in other parts of the world. A key part of this dynamic sector is independent labels such as Rough Trade, Domino and Beggars Banquet—there are so many that I could not list them all, and I do not intend to. We want to continue to support them, and when they write to say that they are worried that the Bill—well intended though it is—will undermine them, we are concerned. [Interruption.] I thought that an hon. Member wanted to intervene.
Let me turn to the level of Government support for the sector.
I am conscious that time is short, and I know that there are colleagues who still want to speak. Let me just spin through the key points that I have not yet made.
First, let me highlight the level of the Government’s support for the creative industries sector, and particularly our musicians. We have set out the creative industries sector deal, the creative sector tax reliefs, the film and television production restart scheme and the culture recovery fund, and the Chancellor’s plan for growth sets out a major long-term commitment to the sector, which we calculate contributes approximately £116 billion to the UK economy. At the recent Budget the Government announced £42 million to support our creative industries, and we include in that the small and medium-sized enterprises at the heart of film, music and video games—that broader nexus of digital entrepreneurship.
I want to touch on the impact of the pandemic, which as the Select Committee highlighted has really brought the issue of the very vertical nature of digital revenues to the fore, because musicians have not been able to have the venue events they would have had before. I make the wider point that the urgency of getting through this pandemic and defeating it is key to no one more than to our musicians. It is a joy to get back to listening to some live music, and long may that continue.
Looking at the impact of covid, for the most part, the recorded music industry stood up reasonably well during 2020. The BPI reported revenues from streaming growing to almost £737 million in 2020, which is a 15% increase during the pandemic, with smartphones, smart speakers and music streaming services providing unprecedented choice for consumers. I will not list all the music that I ended up listening to throughout the pandemic—the House has got better things to do than listen to my music tastes. However, when I listen to Bob Dylan on Spotify, it says, “If you like that, you’ll like this”, and I found myself discovering—I have pretty predictable music tastes—a whole range of artists I had never heard of, and listening to them. That highlights to me the role of digital streaming platforms, notwithstanding the need for equitable distribution, in highlighting artists who I would certainly never have heard of.
The Government are providing a whole series of support for the benefit of musicians: employment schemes, grants, loans, a reduction in VAT to 5%, business rates relief, and the extension of the moratorium on commercial evictions for business tenants, but before the hon. Member for Cardiff West makes it for me, I accept the point that many musicians at the bottom of the supply chain are not earning enough to qualify for tax in the first place.
Sector-specific relief included the culture recovery fund. That was the biggest arts funding package in our history, and the Chancellor made available £2 billion at speed, with awards to more than 800 music-based organisations. That helped to stop more than 130 of our most loved and enduring grassroots music venues having to close their doors. We also put in place the £800 million reinsurance scheme and I am delighted, as I am sure all Members are, that we can get back to live music venues, and indeed to live theatre and pub theatre. One-man and one-woman shows, or shows with a small cast, that are totally covid compliant have been a joy, and one of the unintended consequences of the ghastly pandemic.
I want to touch quickly on copyright law, to which the Bill makes a series of important reforms that are potentially impactful on everybody affected. We in the UK are proud of our copyright law, and no one more than the Minister responsible for copyright. Our 1709 Statute of Anne was the first copyright Act in the world, and today the UK is a world leader in copyright law and intellectual property enforcement. We are determined to continue to explore and modernise that, and I welcome the new chair and chief executive of the Intellectual Property Office, with whom I am working closely to ensure that we keep up with the pace of digitalisation.
In the time available I want to touch on the importance of ensuring that copyright enforcement is properly tackled. We recognise that we are a leader in that at the moment, but the rise of music streaming is a good example of how attractive new services, together with a strong focus on enforcement and education, can transform an industry that has been beset by copyright piracy. We are determined to tackle the problem of piracy, and not just those of us who remember recording “Top of the Pops” on a cassette in the 1970s, which is a low form of that—I would not say it is harmless, but as the former Chair of the Select Committee made clear, probably all of us old enough to do so did it, and it was wrong.
However, the level of industrial piracy going on is far more serious, stealing revenues from our artists. That is why the Government continue to invest in our dedicated Police Intellectual Property Crime Unit—PIPCU—which is the first of its kind in the world. It exists to protect creators and brand owners, and the unit, run by the City of London police, is dedicated to tackling serious and organised online piracy and counterfeiting that affects digital and physical goods. The Government’s upcoming infringement strategy will set out a new framework, allowing us to react more quickly and effectively to today’s challenges.
I want quickly to touch on the rise of streaming, and some of its implications. From the early 2000s, record companies saw a 15-year period of global revenue decline. Recorded music revenues were decimated due to digital piracy, and subscription streaming services such as Spotify—others are available—entered the market in 2008. By 2015, they had played a major part in halting that decline, as consumers began to adopt subscription services and paying for the right to listen to music. In 2015, there were on average 2.1 billion streams a month. By 2020, that figure had grown to 10 billion. As the Select Committee highlighted, the issue is to ensure that the revenues from that flow down. Crucially, however, we are a leader and we are growing in that sector.
The rise of streaming has been a game changer for the business models of many artists. Live performance has become the predominant source of income for many, but not all, artists while recorded music is now often viewed as a key secondary income source. Covid has brought huge challenges, as I have discussed, and the Government have moved fast to support the industry.
I will touch on the taskforces that we have set up to deal with the points in the Bill. We have put the concept of fairness at the heart of our response and we have set up the taskforces to look at three specific issues that the Bill sets out. First, the right of revocation or recapture exists in the United States and means that after 35 years, creators can recover rights that they have contractually licensed to other parties. The argument is that that increases their negotiating leverage.
Secondly, other countries, such as Germany and the Netherlands, have a contract adjustment mechanism. Thirdly, we want to look carefully at the recent European Union directive, which does not apply here, to see whether that works and benefits musicians at the grassroots. Evidence from the Netherlands suggests that contract adjustment law may have very little impact in practice. We want to make sure that we are looking at what works and more research is needed to get that right.
My hon. Friend has listed many areas that we will look at in future. Can he assure me and artists in Watford and around the UK that the goals of the Bill to protect artists in the UK, protect the industry around the world and ensure that innovation can continue will be at the heart of the measures that he will put forward in the next few months?
I am delighted to give that assurance. I take the opportunity to thank my hon. Friend as a stalwart advocate of the Watford cluster and as someone who has been at the heart of music and online creativity. He is a tireless advocate for it in his constituency and in this House. The answer is absolutely yes.
I promised to give the House some details on the taskforces. We have commissioned multiple research pieces, including on equitable remuneration, rights reversion and the contract adjustment mechanism. We have established a music industry contact group, which I met this week. In addition, two industry working groups are being convened. One will look at a voluntary code of practice on contract transparency and the other will seek solutions to the data issues that the industry faces. The Government will assess the progress of those two groups.
I know that other hon. Members want to speak, so I will be brief. On the CMA market study, one of the first things I did as Minister was to write to the chief executive of the CMA. In that letter, I outlined my support for the Select Committee’s recommendation and asked the CMA to conduct a market study on streaming, which is under way. I am sure the House will appreciate that I cannot jeopardise its independence by saying here what conclusions it has reached. We will come back and report in due course.
We have also launched a market study into how other markets around the world are working and the lessons from those. In particular, we are looking at the independent advice from academics at the universities of Leeds, Middlesex and Ulster commissioned by the Intellectual Property Office, “Music Creators’ Earnings in the Digital Era”, which deals with a number of the issues that the Bill tackles.
Furthermore, in response to the Select Committee, we have asked the Intellectual Property Office to start gathering information on the potential impact of an equitable remuneration right. We have also commissioned a piece of work from the IPO on copyright reversion and a piece of research on the potential impact of introducing a contract adjustment mechanism, as proposed in the Bill.
I highlight that the EU directive on copyright in the digital single market, which we are not party to, having left the EU, will provide an interesting insight into whether and which measures are effective. Brexit gives us the freedom to learn from others and put in place the world’s best framework in the way that works best for our industry. I think I have made the point that we are deeply committed to stakeholder engagement, but I emphasise that over the coming weeks and months my officials and I want to move quickly, talking to everyone with an interest. I am determined to make that clear, and I ask anyone who is listening to the debate, or reading it, to contact me, and officials, if they have views that they want to be taken up.
We think that the Bill is well intentioned and speaks to a problem whose existence we recognise. Our instincts are to try to solve the problem through an industry-led package of measures that artists and musicians support, and we will be moving quickly to receive evidence and put proposals to the House, but I must make it clear that if we conclude that legislation is required, we will not hesitate to act.
I thank all Members who have spoken today. The debate has been a powerful demonstration of the level of interest across the House, across all parties and in all parts of the country.
I thank the Minister for spending so much time outlining what the Government will do. He mentioned an industry-led solution. What does he consider to be within the scope of the term “industry-led”, and how much of that package would be musician-led and artist-led?
By “industry” I meant the whole industry, including the musicians who are key to it. The hon. Lady can rest assured that we will not just be talking to the record labels or the streaming companies; we will be listening to artists and musicians as well. We are keen to hear from people who have profited from the existing system, and from those who have not. We recognise what my right hon. Friend Mr Whittingdale referred to as the value gap. We want to hear from everyone who is affected by this issue, across the music spectrum, not just the bands that we have heard about but singers, session musicians, and all the other individuals who are affected.
I know that others want to speak—
On a point of order, Mr Deputy Speaker. It is clear that the Government are intent on talking out all the remaining Bills, which is a great shame. My Miscarriage Leave Bill has led to more than 20,000 signatures to a petition calling on the Government to introduce three days’ paid miscarriage leave. It is with all those campaigners and all those affected by miscarriage and pregnancy loss in mind that I wish the Government would listen closely to what I have to say. On behalf of the campaigners and the many other voices across the country, and given the support for the Bill on both sides of the House, I ask the Government to allow it to be considered in more detail at a future date.
I thank the hon. Lady for her point of order. As she can see, a number of people wish to speak. This is an important debate, but many of the other Bills on the Order Paper are important as well. As we have seen, there are ways of ensuring that if time is not made available for Bills, progress is sometimes made through discussion between Members and the Government. However, the hon. Lady has certainly made her views known, and they are on the record.
I call the Minister.
It is not for me to respond to the point, Mr Deputy Speaker, although it is an important issue. I am here today to deal with this important issue, which is that of music rights.
Let me end by thanking the Ivors Academy group, who have been key to the support for the hon. Member for Cardiff West. The voice of musicians is vital. The Government are listening, and we are determined to act. We need to act in the right way, and we will do so in the coming weeks and months.
The British music industry is one of this country’s most successful exports. Our singers and bands have brought joy to the world with top-quality songs and albums that have inspired many generations. My parents and grandparents were lucky enough to witness the British invasion when, in the mid-1960s, rock and pop acts of the United Kingdom penetrated the shores of the United States and flooded the music industry. America gave the world rock and roll; we gave them as good as we got. Acts such as The Beatles, the Dave Clark Five, the Rolling Stones, Herman’s Hermits, the Searchers, the Hollies, the Animals, the Kinks and so many more have dominated the charts for decades. Their songs still get played today and their enduring musical legacy lives on. A look at social media in the past week shows an almost teen fan obsession with the new Beatles documentary “Get Back”. Screened on Disney Plus, the eight-hour documentary covers the making of the Beatles’ 1970 album “Let It Be”. Critics and commentators gave it rave reviews, and many on social media said watching it made them feel very emotional—and no wonder, really: the Beatles were a uniquely British band with a backstory worthy of any Hollywood blockbuster.
Like most of us in this House and further afield, I love music. It has played a big part in my life, not just personally, but professionally. I have no musical talent to speak of, but for many years before entering the world of politics I worked as a radio presenter, or some might even use the term disc jockey. It is unbelievable that sitting alone in a studio, playing a great selection of songs—sometimes, depending how they were scheduled—and broadcasting to thousands, or hundreds, depending on the size of the radio station, is a job people get paid for. It is not really work.
My musical tastes are wide and varied, with a particular fondness for singer-songwriters such as James Taylor, Tom Petty, Paul Simon and Alison Krauss, who, as hon. Members will know, are American acts. Closer to home, we cannot go far wrong with Roxy Music or Phil Collins. I love their work—Phil Collins is a genius, from his work with Genesis to his great solo albums of the 1980s and 1990s. It has been great to hear about the musical experience of Members of this House through this debate.
There was a time when supposedly uber-cool critics derided Phil Collins, but his music will stand the test of time, and not fall by the wayside as trends continue to change. Let us reflect that, despite health issues and having to sing from a chair, he still gets rave reviews with Genesis as part of its “The Last Domino?” tour, and rightly so. Phil is the best of British music.
I am a daily user of the streaming platform Spotify, which has been brought up many times in this debate, and I recently discovered its 2021 Wrapped feature, which summarises my music taste over the past year. It would be remiss of me, as a former BBC employee, not to say at this point that other streaming platforms are available. In the Wrapped feature, reviewing my music listening over the past year, Spotify tells me my most listened-to artists, songs and even shows me my musical aura, which uses colour to demonstrate the genres of music I have been listening to. Mine was a mixture of blue, pink and red. I am still not quite sure what that means, but I would not want it as my wallpaper.
Hon. Members should not worry: I will not be revealing my top five songs to the House, out of acute embarrassment. Some radio stations claim to play more music variety, but my Spotify playlist ranges from classical music to Motown, and I do not think it would get much of an audience if it was broadcast.
It is important that we all understand the influence and importance of British music as we turn our attention to what is being debated today. The days of hopping on the bus into town to spend our pocket money on the latest 7-inch single are long gone. We buy and listen to our music in a very different way. With a few notable exceptions, an independent record shop on the high street is sadly now a thing of the past, and there is no more queuing at the music counter of the local Woolies to pick up a copy of the new single climbing the charts.
These days, much more music is purchased online or streamed. This new way of consuming music presents opportunities, but also significant challenges, which have been touched on in the debate. It has a particular impact on many of our modern-day British acts such as Adele, Ed Sheeran, Dua Lipa, Stormzy and Coldplay. Our music industry is famous across the world. It creates jobs, puts our country in the spotlight and is a great calling card across the globe for UK plc.
I appreciate that this private Member’s Bill has laudable intentions and is designed to provide a solution regarding how much money artists can earn from streaming, but it needs to be reconsidered. The introduction of so-called equitable remuneration, or ER, would see streaming revenue moved away from the labels and redirected to the artist. Of course, it is in everyone’s interest to see artists paid more, but let us not forget that music labels also take the initial risk in an artist’s career and provide the necessary up-front investment. That should be acknowledged.
Equitable remuneration sounds fair, but what is being proposed will have ramifications that must be carefully considered. There is a temptation to think that every music label is some big corporate beast with millions of pounds sloshing around, but that is simply not the case. Some music fans may recall some of the small independent British labels of the past, such as Factory Records, Stiff Records and Creation Records. Modern-day equivalents would find ER damaging, as there would be much less money available to spend on developing new talent, not to mention the additional bureaucracy.
The danger with ER is that it could reduce opportunities for new and emerging talent. We should be doing everything possible to encourage investment in new music and not to create any obstacles. There is also a real risk that ER could make our music industry uncompetitive and reduce its standing and impact globally. I believe that the Bill could damage our position as a global leader in new music, and we could see our overall share of global music revenue drop. That may lead to larger music labels deciding to invest in other countries instead of ours, as that would be seen as less costly.
Adopting ER would only add further complexity to an already challenging business model, not to mention additional costs. Those new costs would end up being passed on to the consumer, which would be really bad news for music fans and grim news for the British music industry. No one in the House would say that streaming does not require additional regulation, but that needs to be balanced to ensure that it does not reduce investment in new and emerging UK talent. Of course we need to take measures to ensure that streaming platforms properly protect and value music, but not in a way that will damage this British sector.
I know that the DCMS Committee, which I have just joined, will continue to look at this issue in depth, and I applaud the hon. Member for Cardiff West, a fellow member of the Select Committee, for bringing forward a plan that will be built on to create a fair solution for all. He knows, like I do, that the music industry is fiercely competitive, and we need to find the right way forward to protect investment in new music while ensuring that talent is properly paid and valued for its work. Sadly, I feel that this Bill will not hit the right notes for our music industry or the British music fan.
I thank Kevin Brennan for bringing forward this important Bill. Music was my first love, and I looked seriously at a career as a professional musician —as a composer and a singer-songwriter. I wrote one of my earliest compositions at primary school; it was an advert for kitekat. If there were time, I may have shared it with the House, but it is perhaps fortunate that there is not.
I have written hundreds of songs over my years, and I was known for some time, rather regrettably for her, by the nickname “Kylie”. That was probably more to do with our shared height than our shared talent. When I looked into the life of a professional musician, I went to a recording studio and spoke to a number of people who were in the business—composers and singer-songwriters. It seemed to me that, at that time in the ’80s, the industry was unfair, arbitrary, uncertain and opaque about how someone could get into what they wanted to do and how they could succeed in it. As someone who wanted to earn a livelihood in that way, I was absolutely put off going into the industry. What I welcome about the discussion we have had today and the principles set out in the Bill is that they provide some areas in which we could start to rebalance and redress that imbalance and unfairness in the career structure of a professional musician, which is old-fashioned at the moment.
Having spoken to other creatives, I know that they have really benefited from the support that the Government have given, which has been referred to in today’s debate. I am pleased that a number of singer-songwriters, composers and musicians in my area have benefited from that, including Mary-Anne Hatton, Oliver Seager and Jack Perry-Cockings, who have all received support of up to £10,000 from the fund. A number of other organisations across Dover and Deal have benefited from the culture recovery fund and associated support.
However, what we have heard today also underlines that we have a long way to go before we see cultural businesses as good business—before we see the real business potential that they bring in their own right, and the real value that people in the creative industries bring and share. Decca Records contributed £10,000 to kick-start our Dame Vera Lynn memorial project and the statue dedicated to her, but it must not be the case that the record companies and those advocating a voluntary approach can just do or give what they want. There must be a better balancing of fairness and rights so that individuals can earn more of the income that they have created and brought into life and being.
I am very supportive of the direction of travel of the Bill, and I am very reassured by the Minister’s comments that we will make some firm proposals in the time to come and that, should legislation be required, it will be brought forward and supported.
I am conscious of the fact that a number of colleagues want to speak, so let me just say that music was my first love—and it will be my last.
I will try to think of colleagues and reduce a 33-minute speech to about three minutes.
It is no secret in the House that I am an immensely proud and patriotic man, and we in the United Kingdom have the best of the best in musical talent. I will be heading out to Brazil on Sunday wearing my trade envoy hat, and I will be absolutely sure as I go to promote our incredible artists and those who help to make their magic. The UK music industry plays a huge role in creating jobs and growth at home, promoting exports and projecting soft power abroad, so I ask Ministers today that we urge caution before rushing to introduce legislation that could have far-reaching unintended consequences for the industry’s world-leading status.
Mr Deputy Speaker, may I ask you a question?
“Does your granny always tell ya that the old songs are the best?
Then she's up and rock 'n' rollin' with the rest.”
I stand here as a proud Black Country lad, and now that we are in December it seems only fitting that I shout across the House, “It’s Christmas!” in homage to the first Black Country lad who asked that question, Noddy Holder, and Slade.
I often join my local radio station, Black Country Radio, which does an excellent job of promoting local bands, new and old. As I was picking my brains last night about what I wanted to say today, I gave one of its presenters, Dave Brownhill—top bloke—a call to ask about our local bands, and he reminded me of some corkers. The Black Country is rock and roll and has been incredible at creating amazing home-grown talent, and not just Slade: Led Zeppelin, Babylon Zoo, The Wonder Stuff, Judas Priest, Clint Mansell, Ned’s Atomic Dustbin and so many more.
However, Dave also reminded me of our local band, the Empty Can, from Gornal in my constituency—a folk band trio who believe that the launch of their Black Country anthem can help to put the region firmly on the map. The Stourbridge News reported on how their reworking of the patriotic classic “I vow to thee, my country” has already proved an internet hit. To my great excitement, the group hopes we will back their rendition, entitled “I Vow to Thee Black Country”, still further and take the single into the national charts. I hope Members are all paying attention so that they know what song to download to make it the Christmas No. 1 this year. The Black Country anthem is available on iTunes, Spotify, Amazon, Google Play and other online retailers from just 79p, with all money going to Compton hospice.
Thinking of colleagues, I will now cut out the 27 other minutes of my speech and ask whether my hon. Friend the Minister shares my concern that, although the Bill is of course well intentioned, many of its measures would have far-reaching consequences for artists, the music industry as a whole and the wider public. Those consequences are not yet fully understood, so we should gather the evidence to help the Government to make much more informed choices about the most suitable interventions.
It is an absolute pleasure to speak on the Bill, and I warmly congratulate Kevin Brennan on his desire to work cross-party on this important issue. I very much hope I will receive an invitation to hear his cross-party band, MP4.
Music is exceptionally important to this country. It is a huge success story. Like many in the Chamber today, I receive many Fix Streaming and Broken Record campaign emails from constituents angered at the position that musicians and composers have found themselves in as streaming has gradually taken over from physical record sales.
My constituency is a haven for artists of all kinds. Our beautiful island, with its fabulous scenery, rugged coastline and the distant mountains of Snowdonia, is the perfect environment for inspiration. It is no coincidence that Wales has long been known as the land of song.
I would like to speak about equitable remuneration, which was designed to protect musicians and other artists from exploitation. When it comes to recordings played in a public venue such as the Harbour Hotel in Cemaes or on radio stations such Môn FM—on which I can be heard speaking Welsh on Friday nights—equitable remuneration means that the artist and performer will receive an equal share of the moneys with the copyright holder, which is often the record label.
I would like to end my—long, long—speech by thanking the hon. Gentleman for bringing this Bill before us. It contains much that is good, and reform is needed. I look forward to hearing even further from the Minister, who is known to be fair-minded and collaborative.
It is a pleasure to follow so many fantastic and very knowledgeable speeches in the Chamber today. I congratulate Kevin Brennan on bringing forward this incredibly important Bill and on his speech outlining the reasons why he thinks it matters.
Today has been a great opportunity to talk about music. After serving my constituents and the love I have for my family, music is the most important thing in my life. I am very lucky to have two very talented musical parents. My mother is a pianist and my father played the trumpet and the cornet, and also had a most marvellous tenor voice. It is probably not quite as marvellous these days, at 83, but he still likes to have a good sing.
I have put in in excess of 10,000 hours over my life as a singer. I spent my teenage years singing in a worship band in church—a rock band—several times a week, and I was in a covers band at the age of 15. My right hon. Friend Mr Whittingdale talked about the soft power of UK music. Well, that came all the way to New Zealand, and it was great to be able to sing the likes of U2 as a 15-year-old. I have recorded lots of vocal tracks for a song-writing friend, who would send these over to Nashville, Tennessee—
Well, just you wait!
My song-writing friend would send these songs over to music producers in Nashville, Tennessee to review them and see whether they could go forward. In the spirit of oversharing that my hon. Friend Dean Russell regaled us with earlier, I may even have auditioned for the New Zealand version of the Spice Girls in 1998, and I was also in a queue at 3 am, in the ExCeL centre in London, to audition for “The X Factor” in 2010. I hope no recordings of any of these things are still available, but one never knows and, like another former Member of this place, I may be able to have a go in “The Masked Singer” in the future.
I was very lucky, before I was elected, to be able to sing for seven years in my village for the award-winning Ewhurst Players, as well as vocal coach them for their productions. These days, being a Member of this place, the only opportunity to sing is probably at the famous annual karaoke sessions of my right hon. Friend Dr Coffey. However, I am very lucky to have found many kindred spirits in this place, such as my hon. Friends the Members for Redcar (Jacob Young), for Bishop Auckland (Dehenna Davison), for Penistone and Stocksbridge (Miriam Cates), for Bolsover (Mark Fletcher)—he is here—and for South Ribble (Katherine Fletcher), and many more. If we need a new generation of MP4, many of us would quite like to step forward and do that. However, as I am only 15 years younger than the hon. Member for Cardiff West, I am not sure that would suffice for a generation, and we may share a lot of crossover in our taste in music.
It is important that we are here today to make sure that creatives and small producers are able to make a decent living from the joy that they give us with music. It matters to me to perform, but I also love to listen to other people. I have been contacted by a gentleman called Robert Piper, who runs Lockjaw Records in my constituency, and I want to put on record what he had to say to me. He has been involved with music for 20-plus years, and for the last 10 years he has run a label specialising in the punk genre, with over 25 bands from the UK and overseas on its roster. He was very concerned about what this Bill would mean for him. He says that his label’s role is to invest at the grassroots level in a diverse range of artists and support them to achieve as much success as possible. Although he supports the motivation behind the Bill to support artists, he does not believe its full impact is understood. If imposed, he feels that the Bill’s consequences would be felt across the whole industry, but it would particularly affect independent small and medium-sized businesses such as his. He felt it would undermine his ability to grow the next generation of talent and support local jobs. He was also concerned that it would dent the competitive—
The Deputy Speaker interrupted the business (
Bill to be read a Second time on Friday