Thursday, 16 April 2015

CISAC sends open letter to MEP Reda

Creators from all creative sectors and geographic regions have addressed the shortcomings in Pirate Party MEP Julia Reda's draft report on the adaptation of the Copyright Directive. The Report that was published in January 2015, tackled a number of sensitive issues in copyright reform, several of which directly impact creators.

CISAC creators outlined their views on the Report in a letter addressed to Reda and copied to all Members of the European Parliament, on the eve of its discussion by the Parliament. The letter was signed by CISAC’s President Jean Michel Jarre and Vice Presidents Angélique Kidjo, Javed Akhtar, Marcelo Piñeyro and Ousmane Sow on behalf of the nearly four million creators that the Confederation represents. The letter highlights the CISAC's position that Report fails to address market realities for creators and underlines the need for a more balanced system that would take into account the rights of creators and provide fair remuneration for the use of their works.

"We agree that there needs to be a balance achieved between rights holders and the public. But this balance should not be struck at the expense of the increasingly fragile community of creators," wrote the signatories.

The letter questions some of the key proposals, in particular the approach to copyright exceptions and limitations solely from the perspective of user benefits, without considering the impact of so-called "free access" on the economic and moral interests of creators. On the issue of the copyright term, CISAC rejects  Reda’s call for “a duration that does not exceed the current international standards,” effectively meaning a downward harmonisation to a term shorter than what is already available across Europe.

"We would be very interested in seeing the evidence upon which this policy recommendation is based," says the letter.

"Now that digital technologies can help facilitate access to, and preserve our works, forever, an extension seems more justified than ever."

In their conclusion, creators urged Ms. Reda "to do what’s right" by ensuring the future of creators in Europe and supporting "a fairer digital market for creators."     

The letter was sent to MEP Julia Reda and copied to all MEPs who participate in the JURI committee.

That committee is due to commence its discussions on the Report today.

http://www.cisac.org/Newsroom/Articles/Creators-React-to-MEP-Reda-s-Draft-Report-on-Copyright-Calling-for-a-Fairer-Digital-Market-for-Authors

Tuesday, 14 April 2015

IFPI publishes Digital Music Report 2015

The recorded music sector's international trade body, the IFPI, has  published its Digital Music Report 2015, detailing key trends in the recorded music sector over the last year - with the headline news that digital music revenues are now on a par with physical globally, that global industry revenues are marginally down 0.4 per cent to US$14.97 billion in 2014, and that subscription services at the heart of the recorded music portfolio business.

Digital revenues rose 6.9 per cent to US$6.9 billion, representing 46% of all global music sales and underlining the deep transformation of the global music industry over recent years. Total revenues in  2014 were US$14.97 billion although it should be noted that there has been a reclassification of SoundExchange revenues in the US from “performance rights” to “digital”.  This has resulted in an upward adjustment in digital revenues and growth, and an equivalent downward adjustment in performance rights revenues and growth.

The new report shows the industry in continuing transition, with consumers embracing the music access models of streaming and subscription.  Another steep increase in subscription revenues (+39.0%) offset declining global download sales (-8.0%) to drive overall digital revenues, while the number of paying users of subscription services rose 46.4 per cent to an estimated 41 million. Subscription services are now at the heart of the music industry’s portfolio of businesses, representing 23 per cent of the digital market and generating US$1.6 billion in trade revenues.  The industry sees substantial further growth potential in the subscription sector, with new services advancing in 2015 led by three major global players: YouTube’s Music Key, Jay Z’s TIDAL and Apple’s expected subscription service.

Outside of streaming, the Report also shows the enduring nature of the physical format, still 46% of the market, and the still substantial share of digital revenues (52%) accounted for by downloads, although this is declining.  Physical sales still dominate in a number of key worldwide markets including France (57%), Germany (70%) and Japan (78%). On the back of the enws that the UK has launched a new vinyl chart, vinyl sales continue to revive with revenues increasing 54.7 per cent and now accounting for 2 per cent of global revenues.  

Elsewhere in the industry, performance rights income increased by 8.3 per cent and now accounts for 6 per cent of total industry revenues or US$948 million.  Synchronisation revenues increased by 8.4 per cent in 2014 to represent 2 per cent of the market, 
  
The IFPI also try hard to justify artist royalties in the digital age - which without the cost of physical manufacture and distribution are looking more and more favourable to record labels - something that has prompted numerous artistes to take legal action against their labels. The IFPI say "In order to better inform this discussion, IFPI conducted research in 2014 to obtain an accurate picture of how royalty payments have changed as the market has shifted from physical sales to digital channels.  Industry data compiled by IFPI from the three major companies, covering local sales for locally signed artists in 18 major markets outside Japan and the US in the five year period to 2014 shows that while sales revenue fell 17 per cent, total artist payments – in the form of royalties and unrecouped advances – declined much less in real terms (down 6 per cent) and increased significantly as a share of sales revenue, by 13 per cent.  Over the five year period, the data shows that total payments by record companies to local artists totalled more than US$1.5 billion across the 18 markets. But remember,  total revenues in 2014 alone were US$14.97 billion - so its a small small percentage over five years.

The IFPI also coment on rthe very "significant mismatch between the value that certain digital platforms extract from music, and the value that is returned to rights owners." and make  an interesting comparison between the subscriber based services such as Spotify and Deezer, and free access content platforms such as YouTube or Daily Motion.  IFPI estimates music subscription services have 41 million paying global subscribers, plus more than 100 million active users in their “freemium” tiers funded by advertising.  This sector generated revenues to record companies of more than US$1.6 billion in 2014.  By contrast, YouTube alone claims more than one billion monthly unique users and is thought to be the world’s most popular access route to music.  Yet total global revenues to record companies generated by certain content platforms including YouTube amounted to just US$641 million in 2014, less than half the total amount paid to the industry by the subscription services.

To download the full report go to http://www.ifpi.org/digital-music-report.php

The IFPI also released the 2014 Global Charts, with the soundtrack to the motion picture Frozen, Pharrell Willians and Taylor Swift topping the year If you're intersted - here they are:

Global top 10 albums 2014

Rank
Artist
Album
Total units (m)
1
Various Artists
Frozen
10.0
2
Taylor Swift
1989
6.0
3
Ed Sheeran
x
4.4
4
Coldplay
Ghost Stories
3.7
5
Sam Smith
In The Lonely Hour
3.5
6
One Direction
FOUR
3.2
7
AC/DC
Rock or Bust
2.7
8
Various Artists
Guardians of the Galaxy: Awesome Mix Vol. 1
2.5
9
Pink Floyd
The Endless River
2.5
10
Lorde
Pure Heroine
2.0
Source: IFPI. Physical and digital albums included. Streams excluded

Global top 10 digital singles 2014

Rank
Artist
Single
Total sales (m)
1
Pharrell Williams
Happy
                13.9
2
Katy Perry feat. Juicy J
Dark Horse
                13.2
3
John Legend
All of Me
                12.3
4
Meghan Trainor
All About That Bass
                11.0
5
Idina Menzel
Let It Go
                10.9
6
Pitbull feat. Ke$ha
Timber
                  9.6
7
Iggy Azalea feat. Charli XCX
Fancy
                  9.1
8
Ariana Grande feat. Iggy Azalea
Problem
                  9.0
9
MAGIC!
Rude
                  8.6
10
Enrique Iglesias feat. Sean Paul, Descemer Bruno, Gente De Zona
Bailando
                  8.0
Source: IFPI. Units include single-track downloads and track-equivalent streams.

Global Recording Artist Chart 2014

Rank
Artist
1
Taylor Swift
2
One Direction
3
Ed Sheeran
4
Coldplay
5
AC/DC
6
Michael Jackson
7
Pink Floyd
8
Sam Smith
9
Katy Perry
10
Beyoncé




Right of Publicity and Freedom of Speech Clash in Manhattan

This New York Appellate Division case is not a copyright case, but it may nevertheless be of interest to the readers of this blog, as it affirmed the First Amendment right of Defendant, a photographer, over the right to privacy of Plaintiffs’ children, whose pictures were taken surreptitiously using a high powered camera lens and became the subject of an art exhibition. The case is Martha Foster et al. v. Arne Svenson, (2015 NY Slip Op 03068).
Do I See A Privacy Bill?

Defendant Arne Svenson is a photographer. As he explained on his web site, “he has turned outward from his usual studio based practice to study the daily activities of his downtown Manhattan neighbors as seen through his windows into theirs.” The result of this work became the series The Neighbors, which was exhibited in 2013 in New York and Los Angeles, and will be exhibited next year in Denver. Svenson used a telephoto lens, inherited from a bird-watching friend, to take pictures, from his own downtown Manhattan apartment, of people living or working in a  building across the street, without their knowledge, taking advantage of its glass facade and open windows.

Defendant took pictures of Plaintiffs’ minor children, then three and one year old, which became part of the exhibition. Plaintiffs asked the defendant to stop selling these pictures, and defendant took down a picture representing the two children together, but kept offering for sale the picture representing Plaintiffs’ daughter alone. Plaintiffs then sent the gallery a cease-and-desist letter, asking it to take down the pictures from its site and to stop selling them. It complied, but the photographs were shown on several media channels reporting about the exhibition, and the address of the building was also made public.

Plaintiff filed a suit against Svenson, claiming invasion of privacy and intentional infliction of emotional distress. The New York Supreme Court, a court of first instance, denied the claim on August 5, 2013 and granted defendant’s motion to dismiss. Plaintiffs appealed.

New York’s Statutory Right to Privacy

New York State does not does not recognize a common-law right of privacy, and its only privacy statute,  New York Civil Rights Law §§ 50 and 51, is a right of publicity statute. The Appellate Division provides a short history of the New York privacy law in its discussion.

Under § 50, “[a] person, firm or corporation that uses for advertising purposes, or for the purposes of trade, the name, portrait or picture of any living person without having first obtained the written consent of such person, or if a minor of his or her parent or guardian, is guilty of a misdemeanor.” § 51 of the statute provides for injunctive relief and damages. As such, the statute only forbids nonconsensual commercial appropriations of the name, portrait or picture of a living person. If the person whose likeness has been appropriated consents to this use, or if the use is noncommercial, then it is not prohibited.

The New York Supreme Court had noted in the Svenson case that “the question… is whether the photographs used by the photographer in a show or as examples of his art qualified as a commercial use or for the purpose of advertising or trade” and that the New York legislature “also sought to protect the constitutional right of freedom of expression.”

Is Selling Art Commercial Appropriation?

The photographs taken by Defendant had been offered for sale. Does that mean that taking them without authorization constituted commercial appropriation? Plaintiffs were arguing that these photographs were bought and sold in commerce. However, the Appellate Division noted that New York courts “have refused to adopt a literal construction [offor advertising purpose” and “for the purpose of trade”] because the advertising and trade limitations of the privacy statute were drafted with the First Amendment in mind.

The Appellate Division also cited its own Nussenzweig v. diCorcia 2007 case, where plaintiff, Erno Nussenzweig, had claimed that defendant, Philip diCorcia, had violated his New York statutory right of privacy when presenting in an art exhibition, and selling to the public, a photograph of Plaintiff taken in the streets of New York. Plaintiff argued that the photographer had made a commercial use of his image. Indeed, diCorcia had grossed about $240,000 from the sale of a limited edition of the photographs from this exhibition, and the photographs had been sold for $ 20, 000 to $30,000 each.

The invasion of privacy action was found to be time-barred in Nussenzweig, but two Justices wrote in a concurring opinion that the artwork “constitutes a matter of general public interest entitled to First Amendment protection.” They noted that plaintiff’s photograph had been published “in both the popular press and art media [which] confirm[ed] that the image is "a matter of legitimate public interest to readers" so as to bring its use within the newsworthiness exception to the privacy statute” and that “the inclusion of the photograph in a catalog sold in connection with an exhibition of the artist's work does not render its use commercial, as plaintiff suggests [because][i]f the image is a matter of public interest, it is immaterial whether that interest is satisfied by viewing the original in a museum, art gallery or private dwelling or by perusing a reproduction in an art magazine or other publication.”

The Appellate Division concurred with the Nussenzweig concurrence. There was no doubt for the court that Defendant’s photographs must be considered works of art, as even Plaintiffs had conceded that Defendant was a renowned art photographer and that he had assembled photographs to present them in an art gallery exhibition.

For the Appellate Division, the fact that Svenson had made a profit from the sale of the photographs does not render the use of the photographs commercial, citing the Stephano v. News Group Publications 1984 case, where the New York Court of Appeals explained that it was the content of the article at stake, but not the publisher’s motive to increase circulation which determines, under the New York privacy statute, whether a particular item is newsworthy, and thus protected by the First Amendment, or merely commercial.

The Photographs are Protected by the First Amendment

New York courts may find that a particular use of someone’s likeness is protected by the First Amendment and is thus outside the scope of New York Civil Rights Law §§ 50 and 51. In our case, the photographs were presented in an art gallery.

The Appellate Division noted that, “[a]lthough the Court of Appeals has not been confronted with the issue of whether works of art fall outside the ambit of the privacy statute, others courts that have addressed the issue have consistently found that they do,”citing as an example the 2002 Hoepker v. Kruger Southern District of New York (SDNY) case, where the court found that that ”a careful weighing of interests” between privacy and freedom of speech is necessary, and must be done by the courts on a case by case basis. This may be particularly difficult if the protected speech is art, as art is not "newsworthy events or matters of public interest” the protection of which prevails over right of privacy, but stated that “New York courts have taken the position in the right of privacy context that art is speech, and, accordingly, that art is entitled to First Amendment protection vis-à-vis the right of privacy.”

Infliction of Emotional Distress?

Plaintiffs had also argued that the photographs had been obtained in an improper manner and thus should not been exempt from being considered as advertising or trade under the statute. They did not, however, cite any authority supporting this position. The Appellate Division took the view that Plaintiffs were thus arguing that “the manner in which the photographs were obtained constitute[d] the extreme and outrageous conduct contemplated by the tort of intentional infliction of emotional distress and serves to overcome the First Amendment protection.”However, the court did not find that Defendant’s behavior had been outrageous, even if the pictures were taken while the children were inside their home, as Defendant’s actions “certainly do not rise to the level of atrocious, indecent and utterly despicable.” Also, the Appellate Division noted that “the depiction of children, by itself, does not create special circumstances which should make a privacy claim more readily available.”

An Appeal to the Legislature

New York, unlike other States, does not have a general invasion of privacy statute, only a right to publicity statute. While the Appellate Division reluctantly affirmed that there was no cause of action for violation of the New York statute, it added that “in these times of heighted threats to privacy posed by new and ever more invasive technologies, we call upon the Legislature to revisit this important issue, as we are constrained to apply the law as it exists.” It remains to be seen if the New York Assembly will hear this plea.


You can also read about this case on The IPKat, in a post penned by Valentina Torelli. 

Image is courtesy of Flickr user cheb.odegaard under a CC BY 2.0 license.

PRS for Music targets live music and festivals

PRS for Music (PRS) have launched a new eight week long Popular Music Concerts Tariff (‘Tariff LP’) Consultation to review the licensing structure for the use of music in the live music industry in the United Kingdom. Tariff LP is applied to ticketed live popular music events such as concerts and festivals. The consultation will run from 13th April to 8th June 2015.

Tariff LP is a Tribunal tariff that was set in 1988 by the Performing Right Tribunal, which later became the Copyright Tribunal. Having failed to amend the Tariff in 2010 (after a much criticised review which alienated large parts of the festival sector who said the review was poorly timed as it conincided with their busy festival season in the UK) the PRS say the purpose of the 2015 consultation is to seek views on the findings of a comprehensive investigation by PRS for Music into the changes in the live music industry since 1988, "to ensure that PRS for Music is operating a tariff that is fit for the purpose of licensing live popular music events going forward."

The Consultation Paper is somewhat critical of the 1988 Performing Right Tribunal's decision - albeit with hindsight and acknowledging this is because of changes in the live sector. The paper notes "There were, and still are, two essential elements to Tariff LP, namely (i) the revenue base, and (ii) the tariff percentage rate. The 1988 Tribunal decision did not focus on the revenue base, "doubtless because at that time the only material revenue stream was the ticket price. This was uncontroversial and therefore not considered by the Tribunal in 1988. The position is however very different today. As to the appropriate tariff percentage rate, the 1988 Tribunal regarded the musical composition’s contribution to a live concert as relatively minimal, with the production and artist performance being “significantly more important” than the underlying PRS for Music repertoire". Tariff LP currently charges 3% of gross receipts per event.


The PRS say their tariffs need to be 'fit for purpose' and that the tariffs need to reflect the market in which they operate. PRS consider that, in the following respects, the current Tariff LP does not satisfy this criterion:

1. The Tariff fails adequately to reflect the changes in the revenue structure of live events since 1988, including the wide and varied revenue streams from which many live events now benefit;

2. The Tariff fails adequately to value the contribution that the musical composition makes towards the success of live concerts and festivals;

3. The licensee declarations made under the Tariff fail properly to account for the actual final
price (including e.g. booking fees) that consumers pay for access to many live concerts, thereby ading to ongoing underpayment under the Tariff;

4. The Tariff fails to account for free or discounted tickets and, in this regard, the revenue base as defined in the Tariff currently does not reflect the value of this type of admission. 

The PRS note that the economics of the live industry, including its revenue stream structure, have changed significantly since 1988. Part of the change in the live industry’s revenue structure has been driven by the internet, having shaped for example the way event tickets are sold and bought. The PRS would like to explore applying the Tariff to:

1. Secondary ticketing
2. Booking fees charged to consumers
3. Sponsorship and advertising
4. Other ancillary revenues (such as merchandising sales and catering at live events,
parking concessions and camping/accommodation

Targeting secondary ticketing is an interesting move. Whilst some promoters and artistes undoubtedly do benefit from commercial arrangements in the secondary ticketing market - many do not and many oppose the secondary ticketing sector, broadly classifying it as 'touting'. The PRS argue that "live music event organisers seem to derive considerable value from the secondary market through “direct allocations", whereby tickets, often with premium features, bypass the general sale and are allocated to secondary ticketing agents who often sell them at high mark-ups, in exchange for a share of the proceeds to the event organisers.  We consider that the full price paid by consumers on these allocated tickets falls within the scope of the current Tariff LP." The Government recently announced a year long statutory review of secondary ticketing as part of the Consumer Rights Bill which was amended to require more transparancy from ticket sellers (and secondary ticketing platforms). The Competition and Markets Authority also recently issued a guidance to secondary ticketing companies. 

The PRS have also released details of a 2014 online survey of 780 consumers who went to live events which (perhaps unsurprisingly) shows that: (a) The value of a musical composition is broadly commensurate to the value of the performance at live events and (b) The value of music to a festival is highly significant and far outweighs other factors in influencing whether an individual should attend. The survey is no doubt intended to fight back against the Tribunal's comment in 1988 that the musical composition’s contribution to a live concert as relatively minimal, with the production and artist performance being “significantly more important” than the underlying PRS for Music repertoire, wth the Tribunal then saying  “[T]he main attraction in all such shows is the stars who perform and the production, rather than the actual music used”. The 2014 survey also found that other festival entertainment activities are deemed insignificant when compared to the importance of music, something which may come as a surprise to many festival organisers. The survey was conducted by FTI Consulting.

Launching another consultation just as the busy UK summer festival and touring season kicks off seems somewhat odd (again!) although the PRS says " Where we are considering or proposing to make significant changes to a tariff or to introduce a new tariff, this includes undertaking fair, reasonable and proportionate consultations and negotiation" and "We aim to set reasonable terms and to apply and administer our schemes fairly and consistently". The 2010 consultation which was launched in June 2010 was twice extended after loud complaints from promoters and festival organisers, eventually closing in 31st December 2010.  In November 2011 PRS for Music has announced the end of its customer consultation on royalty rates for popular music events in the UK. After an extended period of listening and engaging with customers, representative organisations and key stakeholders, the decision was made that no changes should occur to the rate or structure of the tariff. The rate remained at 3% of ticket receipts.

The Copyright Tribunal has jurisdiction over all existing and proposed schemes operated by PRS for Music.

For openesss, the writer must say that he works with the Glastonbury Festival, as well as the Association of Independent Festivaks in the UK, and Yourope, the European festivals associaton.

https://www.prsformusic.com/users/businessesandliveevents/livevenuesevents/consultation/Pages/default.aspx