1、House of CommonsCulture,Media and Sport CommitteeCreator remunerationFifth Report of Session 202324Report,together with formal minutes relating to the reportOrdered by the House of Commons to be printed 26 March 2024HC 156Published on 10 April 2024by authority of the House of CommonsThe Culture,Medi

2、a and Sport CommitteeThe Culture,Media and Sport Committee is appointed by the House of Commons to examine the expenditure,administration and policy of the Department for Culture,Media and Sport and its associated public bodies.Current membershipDame Caroline Dinenage MP(Conservative,Gosport)(Chair)

3、Steve Brine MP(Conservative,Winchester)Clive Efford MP(Labour,Eltham)Julie Elliott MP(Labour,Sunderland Central)Damian Green MP(Conservative,Ashford)Dr Rupa Huq MP(Labour,Ealing Central and Acton)Simon Jupp MP(Conservative,East Devon)John Nicolson MP(Scottish National Party,Ochil and South Perthshir

4、e)Alex Sobel MP(Labour,Leeds North West)Jane Stevenson MP(Conservative,Wolverhampton North East)Giles Watling MP(Conservative,Clacton)Kevin Brennan MP(Labour,Cardiff West)was also a member of the committee during this inquiry.PowersThe Committee is one of the departmental select committees,the power

5、s of which are set out in House of Commons Standing Orders,principally in SO No.152.These are available on the internet via www.parliament.uk.Publication Parliamentary Copyright House of Commons 2023.This publication may be reproduced under the terms of the Open Parliament Licence,which is published

6、 at www.parliament.uk/copyright.Committee reports are published on the Committees website at and in print by Order of the House.Committee staffThe current staff of the Committee are Lucy Bishop(Committee Operations Officer),Andy Boyd(Committee Operations Manager),Dr Conor Durham(Committee Specialist

7、),Ollie Florence(Senior Media and Communications Officer),Natalia Janiec-Janicki(Assistant Clerk),Lois Jeary(Committee Specialist),Duma Langton(Committee Specialist),Olivia Rose(Media and Communications Officer)and Ben Sneddon(Clerk).ContactsAll correspondence should be addressed to the Clerk of the

8、 Culture,Media and Sport Committee,House of Commons,London SW1A 0AA.The telephone number for general enquiries is 020 7219 6188;the Committees email address is CommonsCMSparliament.uk.You can follow the Committee on X(formerly Twitter)using CommonsCMS.1 Creator remuneration ContentsSummary 3Creator

9、remuneration 5Introduction 5The economics of the creative economy 5The UK creative industries 5The plight of professional creators 7Our previous work 8Our inquiry 91 Future-proofing creator rights 10Royalty and residual rates 10Case study:actors and performers 10Case study:film and TV directors 12Ca

10、se study:professional musicians 12Private copying,storing and sharing on electronic devices 13Private copying in UK law 13Proposals for a private copying scheme 15Artificial intelligence 172 Freelancing and contractual terms 21The prevalence of freelancing 21Advantages of the freelance model 21Downs

11、ides for professional creators 22Proposed solutions 26A“Freelancers Commissioner”26Fair contractual terms for creators 273 Economics of music publishing 30The complete reset of music streaming 30Progress to date 31Proposals for further action 31Songwriter remuneration 34Ongoing tensions with the val

12、uation of song rights 34Origins of the recording/publishing revenue split in streaming 36 Annex:Glossary of terms 39Conclusions and recommendations 43Formal minutes 45Witnesses 46Published written evidence 46List of Reports from the Committee during the current Parliament 473 Creator remuneration Su

13、mmaryDespite the importance and global success of the UK creative industries,successful professional creators are struggling to make a living.Many people in the sector experience precarious rates of pay,employment conditions and contractual terms.There are many short-and long-term factors,including

14、falling real-terms funding,new technologies and the legacy of Covid-19 and associated public health measures.We launched our inquiry to explore issues around fair remuneration and working conditions across the creative industries and consider possible solutions.As new means of consuming creative con

15、tent have become the norm,creators across the sector have experienced persistent declines in their royalties and residuals.Royalties can provide income smoothing,financial certainty,greater career flexibility and support during retirement for those who receive them.Royalties have been depressed by d

16、igital distribution in the UK,which pays out less to creators(if at all)compared to other modes of distribution.Simultaneously,gaps in the UK copyright regimewhere creators are not compensated for private copying,whereby users download,store,copy and share content on digital devicesmeans that paymen

17、ts from abroad are under threat due to a lack of reciprocity with other jurisdictions.We recommend that the Government introduce a private copying scheme to safeguard those payments from abroad and provide a new,sustainable stream of income for creators.We consider recent policy implications regardi

18、ng the impact of the development of artificial intelligence(AI)on the creative industries,which we previously discussed in our report on Connected tech:AI and creative technology.We are particularly disappointed that the Governments working group on AI and intellectual property has failed to come to

19、 an agreement between the creative industries and AI developers on creators consent and compensation regarding the use of their works to train AI.We call on the Government to ensure that creators have proper mechanisms to enforce their consent and receive fair compensation when their works are used

20、by AI systems.Our report scrutinises the prevalence of freelancing within the creative industries.Freelancing has several theoretical advantages,such as allowing creators to choose projects they pursue.However,freelancing can also leave creators vulnerable to economic downturns,unable to access righ

21、ts to annual leave,parental leave and sick pay and lacking other forms of employee support.More broadly,many creators experience poor working conditions,including inconsistent use of contracts and terms and conditions,uneven responses to bullying,harassment and discrimination and a lack of proper su

22、pport,accounting,training and development.We recommend that the Government appoint a Freelancers Commissioner with appropriate powers and cross-departmental oversight to advocate in the interests of creative freelancers and address wider issues around contracts and working conditions.Finally,we revi

23、sit our work on music streaming in order to review to progress on the“complete reset”we called for in our Economics of music streaming report.We explore the practical implications of the Governments work to date,which has included the commissioning and publication of relevant research,formation of s

24、everal working groups and recommendation for a market study by the Competition and Markets Authority.Reflecting on its current programme,we urge the Government to bring Creator remuneration 4forward a package of reforms based on its research and revisit the membership of the recently-formed Creator

25、Remuneration Working Group to give music makers a stronger and fairer voice in group discussions throughout the Groups timespan.We also note that songwriters and publishing rightsholders more broadly continue to receive pitiful returns from streaming,despite their importance to the streaming economy

26、,and recommend that the Government bring forward measures to incentivise an optimal rate for publishing rights in order to fairly remunerate music makers for their work.5 Creator remuneration Creator remunerationIntroduction1.Culture creates meaningful moments in peoples lives,but many creators stru

27、ggle to make a living.Short-term project-based employment,precarious public and private funding and technological disruption have all contributed to poor rates of remuneration.Many skilled,successful professional creators are now holding down multiple jobs,reliant on family support or leaving the pr

28、ofession altogether,which in the long-term may be to the detriment of our creative economy.1 Reflecting on the plight and outcry of creators,Nile Rodgers,multiple Grammy winning musician,Rock and Roll Hall of Fame inductee and Songwriter Hall of Fame chairman,concluded:“that is all we are really tal

29、king about:equal pay for your work”.2The economics of the creative economyThe UK creative industries2.The UK Government was the first in the world to define what the“creative industries”are:namely“those industries which have their origin in individual creativity,skill and talent and which have a pot

30、ential for wealth and job creation through the generation and exploitation of intellectual property”.3 This definition underpinned projects to map the sector in 1998,4 which was the first to set out the precise definition of the sector and identify the challenges it faced,5 and 20016 in order to pro

31、mote deeper understanding of its economic contribution and the issues it faced.7 The“creative economy”is a related(albeit broader)concept,which refers to the collective economic contribution both of the 1 Qq55,1482 Q1483 Department for Culture,Media and Sport,Creative Industries Mapping Documents 20

32、01:Secretary of States Foreword,9 April 2001,p.5.Currently,DCMS uses a metric of“creative intensity”to identify relevant subsectors,of which there are nine,where more than 30%of the workforce work in Creative Occupations(set out in the Office of National Statistics list of Standard Occupation Classi

33、fications).The nine subsectors are:advertising and marketing;architecture;crafts;design(including fashion,product design and graphic design);film,TV,video,radio and photography;IT,software and computer services;publishing;museum,gallery and library services;and music,performing and the visual arts.4

34、 Department for Culture,Media and Sport,Creative Industries Mapping Documents 1998,9 April 1998,accessed 19 December 20235 Jonathan Gross,The Birth of the Creative Industries Revisited:An Oral History of the 1998 Mapping Document(London,2020),p.116 Department for Culture,Media and Sport,Creative Ind

35、ustries Mapping Documents 2001,9 April 2001,accessed 19 December 20237 The British Council,Creative and Cultural Economy Series:Mapping the Creative Industries:A Toolkit,January 2010,accessed 19 December 2023,p.15 Creator remuneration 6creative industries as a whole and of all the people employed in

36、“creative occupations”(specific roles listed by DCMS judged against specific criteria)8 in the wider economy.9 A glossary of terms can be found in the Annex of this report.3.At present,the UK is a world leader in creative industries.Recent data shows that the creative industries collectively contrib

37、ute approximately 108 billion in gross value added(GVA)to the UK economy annually,10 equivalent to 6%of the UK economy,and more than the automotive,aerospace,life sciences and oil and gas industries combined.11 While the Government no longer publishes economic estimates for the creative economy as a

38、 whole,12 in 2014 the entire creative economy contributed 133.3 billion in GVA per year,of which 84.1 billion(63%)was from the combined creative industries and the remaining 49.2 billion(37%)were from creators employed outside the creative industries.13 The creative industries now comprise over 300,

39、000 UK businesses(11.8%,of the UK total)and accounted for 2.3 million jobs in 2022.14 Comparably,the sectors output is growing more than 1.5 times faster than the rest of the economy and its workforce is growing at five times the UK rate.15 The sector also exports over 45 billion in services and ove

40、r 9 billion in goods,with a total trade surplus of over 20 billion.16 The largest trade partner by far for goods and services exports is the USA.17 Highlighting the contributions of specific subsectors shows the breadth of the UKs strength:The UK advertising industry contributed almost 30 billion GV

41、A to the economy in 2021 and exports 11 billion in services annually;18 The music industry generated 6.7 billion GVA and 4 billion in exports in 2022,employing 210,000 people;198 Department for Culture,Media and Sport,Creative Industries Economic Estimates:Methodology,10 February 2016;Nesta,A Dynami

42、c Mapping of the UKs Creative Industries(January 2013).The list of creative occupations was initially drafted by DCMS in consultation with the sector based on the definition set out by Nesta,which incorporated five replicable criteria.Nestas overarching definition was“a role within the creative proc

43、ess that brings cognitive skills to bear to bring about differentiation to yield either novel,or significantly enhanced products whose final form is not fully specified in advance”.The five criteria,relied on by DCMS to develop the list,are:“novel process”;“mechanisation resistant”;“non-repetitivene

44、ss or non-uniform function”;“creative contribution to the value chain”;and“interpretation,not mere transformation”.9 Department for Culture,Media and Sport,Creative Industries Economic Estimates,January 2016,p.1610“Ambitious plans to grow the economy and boost creative industries”,Department for Cul

45、ture,Media and Sport press release,13 June 202311 Directors UK(CRE0002)12 In 2016,the Government replaced the methodology that underpinned its annual Creative industries economic estimates with a new methodology to produce DCMS Sectors Economic Estimates.The intention of this reconfiguration was to

46、look across the digital,culture,creative industries,gambling,sport,telecoms and tourism sectors“in a consistent way”.It should be noted that,since 7 February 2023,the methodology has changed again following machinery of government changes,which saw the digital and telecoms portfolios move from the t

47、hen-Department for Digital,Culture,Media and Sport to the newly created Department for Science,Innovation and Technology(DSIT).13 Department for Culture,Media and Sport,Creative Industries Economic Estimates,January 201614 Creative Industries Policy and Evidence Centre,National Statistics on the Cre

48、ative Industries,28 June 202215 Department for Culture,Media and Sport,Creative Industries Sector Vision:A joint plan to drive growth,build talent and develop skills,CP 863,June 2023,p.516“Creative industries add almost 25bn to UK trade balance”,Creative Industries Council press release,27 September

49、 202317 Department for Culture,Media and Sport and Department for Science,Innovation and Technology,DCMS sectors economic estimates:Trade,2021-main report,3 August 202318 Creative Industries Council,Creative industries,accessed 13 December 202319“This Is Music Reveals Music Industry Delivers 4bn Exp

50、orts Boost To UK Economy”,UK Music press release,7 November 20237 Creator remuneration Publishing contributed over 6 billion in GVA in 2022,including 3.8 billion in exports(as the worlds largest exporter of books)which alone reduced the UKs trade deficit by 2.2%;20 The video game industry had a GVA

51、of 7.05 billion as of 2023,21 making it the leading market in Europe and sixth largest globally;22 and Film and high-end TV(HETV)production in the UK added a record 6.27 billion of inward investment alone in 2022.234.The creative industries also have an intrinsic value beyond their economic impact.T

52、he Governments recent Creative Industries Sector Vision,A joint plan to drive growth,build talent and develop skills,describes the sector as“an essential positive force for society,bringing joy,inspiration and opportunity to our lives”that provides“the news that informs our democracy,the designs tha

53、t shape our cities and the content and performances that enrich our lives and strengthen our global image”.24 As music executive and entrepreneur Merck Mercuriadis told us,“it is one of the fundamental tenets of our life that people need music.If you got on the tube this morning at 8 am,you would se

54、e all these people with headphones on;people think they are being entertained as they go from point A to point B,but it is not entertainment.They are getting the sustenance that they need to get through whatever life is going to throw at them that day,good or bad.”25The plight of professional creato

55、rs5.Despite the creative industries economic contribution to the UK,many skilled and successful professional creators are struggling to make a living from their work.The underlying reasons for this range from historic,cross-sector issues to short-term,subsector-specific problems.These include:A reli

56、ance on public funding,26 which,as we have noted in our report Reimagining where we live:cultural placemaking and the levelling up agenda,has been falling in real terms and remains precarious,particularly where the source is local authorities,and which has not been offset by private funding;27 The p

57、revalence of freelancing,which has several advantages but also leaves creators vulnerable to downturns and/or unable to access annual leave,parental leave and sick pay or contribute to a pension,and constrains social mobility in the sector;2820 Creative Industries Council,2022 CITIB Case:Publishing,

58、accessed 15 March 202421 UK Interactive Entertainment,Annual Report 2023,13 September 2023,p 1322 The Independent Games Developers Association,About the UK Video Games Industry,accessed 19 December 202323“Official 2022 statistics reveal a record 6.27 billion film and high-end television production s

59、pend in the UK”,British Film Industry press release,2 February 202324 Department for Culture,Media and Sport,Creative Industries Sector Vision:A joint plan to drive growth,build talent and develop skills,CP 863,June 202325 Q10026 Qq7,65727 Digital,Culture,Media and Sport Committee,Third Report of Se

60、ssion 202223,Reimagining where we live:cultural placemaking and the levelling up agenda,HC 155,paras 23428 Qq7,912,37,39,513;Directors UK(CRE0002);Creative UK(CRE0003)Creator remuneration 8 A related squeeze in pay rates and remuneration through royalties,reflecting how the copyright framework has b

61、ecome outdated given the prevalence of digital distribution including,but not limited to,streaming and private copying;29 The impact of other technological advancements such as artificial intelligence(AI),30 on areas including the intellectual property(IP)rights of creators,which we have recently re

62、ported to Parliament about;31 and Long-term impacts of the Covid-19 pandemic and associated public health measures,which has caused many freelancers to leave the sector entirely,the loss of grassroots cultural infrastructure and changes to audience behaviour,and which has resulted in uneven recoveri

63、es across the country.326.Meanwhile,sector-specific problems have included the struggles of regional theatre and grassroots music venues,33 the debates among the music industry around the distribution of streaming revenues and codification of performer rights34 and,in the film,television and radio s

64、ubsectors,the recent industrial action in the United States taken by members of the Writers Guild of America(WGA)and Screen Actors Guild-American Federation of Television and Radio Artists(SAG-AFTRA)against the Alliance of Motion Picture and Television Producers(AMPTP),resulting in a pause in produc

65、tions and concomitant commissioning slowdown.35Our previous work7.Previously,we have explored issues relating to the experience of professional creators,which include technology and IP,grassroots cultural infrastructure and social mobility,through our Economics of music streaming inquiry36 and follo

66、w-up report,37 our Reimagining where we live:cultural placemaking and the levelling up agenda inquiry38 and our Connected tech:AI and creative technology report.39 In response to this work,the Government has launched a comprehensive programme on issues in music streaming,40 refreshed the membership

67、of the Creative Industries Council(a forum of government,creative businesses and other creative organisations)41 and published its Creative Industries 29 Q7;Directors UK(CRE0002);Creative UK(CRE0003)30 Qq3944,8690;Directors UK(CRE0002)31 Culture,Media and Sport Committee,Eleventh Report of Session 2

68、02223,Connected tech:AI and creative technology,HC 164332 Qq6975;Creative UK(CRE0003)33 Q7034 Qq913 Nile Rodgers35 Qq1,1736 Digital,Culture,Media and Sport Committee,Second Report of Session 202122,Economics of music streaming,HC 5037 Digital,Culture,Media and Sport Committee,Fifth Report of Session

69、 202223,Economics of music streaming:follow-up,HC 87438 Digital,Culture,Media and Sport Committee,Third Report of Session 202223,Reimagining where we live:cultural placemaking and the levelling up agenda,HC 15539 Culture,Media and Sport Committee,Eleventh Report of Session 202223,Connected tech:AI a

70、nd creative technology,HC 164340 Department for Culture,Media&Sport and Intellectual Property Office,The governments work on music streaming,accessed 8 February 202441 Digital,Culture,Media and Sport Committee,Eighth Special Report of Session 202223,Economics of music streaming:follow-up:Government

71、Response to the Committees Fifth Report,HC 1245,p.39 Creator remuneration Sector Vision.42 It has also identified the creative industries as one of five“sectors of the future”with high global competitive advantage and potential for growth.43 We are committed to ensuring that the Government delivers

72、on its promises to the sector.Our inquiry8.We launched our inquiry in the autumn of 2023,with evidence sessions in September and December.The aim of our inquiry was to explore issues around fair remuneration and working conditions across the creative industries and consider solutions to the problems

73、 that our witnesses highlighted.We heard from industry professionals across the creative industries,including panels with:Representatives from collective management organisations(CMOs),responsible for collecting revenues on behalf of creators in their subsectors;Cross-sector advocacy bodies Creative

74、 UK and the Creators Rights Alliance(CRA);Academics Professor David Hesmondhalgh and Dr Hyojung Sun,who co-authored among other things the Intellectual Property Office(IPO)-commissioned report into Music creators earnings in the digital era;44 and Music industry professionals Nile Rodgers,VV Brown,M

75、erck Mercuriadis and Paul Clements.We thank everyone for taking the time to give evidence to our inquiry.42 The Sector Vision sets out the Governments three goals“for the creative industries to become an even greater growth engine and where creative talent from all backgrounds,and creative businesse

76、s from all areas in the UK,can thrive”.The goals are:1)grow creative clusters across the UK,adding 50 billion more in GVA;2)build a highly-skilled,productive and inclusive workforce for the future,supporting one million more jobs across the UK;and 3)maximise the positive impact of the creature indus

77、tries on individuals and communities,the environment and the UKs global standing.The Government says it intends to achieve these objectives by 2030.43 HM Treasury,Spring Budget 2023,HC 1183,March 2023,p.6344 Intellectual Property Office,Music creators earnings in the digital era,accessed 13 December

78、 2023 Creator remuneration 101 Future-proofing creator rightsRoyalty and residual rates9.Secondary payments,such as royalties or residuals(as they are known when paid to cast and crew of TV and film productions),in the context of the creative industries,are payments made to an individual or company

79、in exchange for the ongoing permission for the use of particular assetsthose assets being,in this context,copyrighted works such as musical works,performances,photographs,artworks and so onin addition to the up-front payments that reimburse creators for their initial work.Permissions are typically g

80、iven and defined under licensing agreements between parties.Royalties and residuals are often set at a percentage of revenue of gross or net revenues from the use of the relevant works,though other modes of compensation also exist.The collection of royalty and residual revenues,and in many cases lic

81、ensing of works,are typically handled by collective management organisations(CMOs),which are membership organisations that administer creators rights in exchange for a small fee.10.As new means of consuming creative content have become the norm,creators have experienced persistent declines in their

82、secondary payments.This situation exists across the industry.Royalties can provide income smoothing(making earnings more stable)and financial certainty for those who receive them,particularly for creative freelancers both during their career and in retirement(in lieu of pensions).45 While our variou

83、s inquiries across the creative industries have shown that historic royalty rates have not always been particularly significant,particularly beyond the most successful creative talent,46 there is also consensus that nominal amounts are falling or have been lost altogether.47 As Nile Rodgers explaine

84、d,this has been contrary to the initial promises of digitisation:If you make it very simple,and you think that streaming is the way that you move the product from this place to that place,while the quality of the product stays digital and never degradesthat is amazing;it is absolutely amazing.Becaus

85、e that lowers the price of everything,what should naturally happen is that the people who are providing the music should make more money,because all the costs that they used to have have gone away.I have a business and all of a sudden my costs go down exponentially,then what I pay out to the people

86、who support my business should go up,because I have plenty of money to go around.48Case study:actors and performers11.The joint WGA and SAG-AFTRA strike in America highlighted concerns about residuals,both as a subject of that industrial action due to the rapid growth of streaming,but also with the

87、ensuing slowdown in film and TV commissioning,which means creators will be more reliant on secondary income rather than up-front payments.45 Qq3,12;Directors UK(CRE0002)46 Digital,Culture,Media and Sport Committee,Second Report of Session 202122,Economics of music streaming,HC 50,paras 44547 Qq3,7,1

88、2,21,55,91100,1045,1115,148,1502,15548 Qq91211 Creator remuneration 12.Fundamentally,streaming means that TV and film productions are exploited more widely and for longer than has been the case traditionally,yet the industrys model of pre-purchasing rights has not reflected these changes.The existin

89、g collectively bargained agreement for TV productions allows producers to purchase rights for streaming for an additional percentage of the original fee,regardless of a productions success over that span.Specifically,the agreement gives producers options to pre-purchase what are known as the“Rest of

90、 World rights”up front,which includes most streaming rights outside the UK and US,for 7 years at 35%of the original fee.49 The agreement also gives producers an option to purchase an additional 3 or 8 years at 2%or 5%of the original fee respectively,or for UK streaming rights for 515 years for 511%t

91、he original fee.50 However,Ofcoms annual Media Nations report notes that the reach and viewing of linear broadcast TV has declined by about 16%on average since 2019,and at a much faster rate among younger viewers(by almost 50%).51 Meanwhile,use of broadcaster video-on-demand(such as BBC iPlayer)has

92、grown year-on-year and use of subscription and advertising video-on-demand(such as Netflix)and video-sharing platforms(such as YouTube)remains high especially among individuals aged 434.52 This means that producers are able to pre-purchase rights for streaming at a fraction of the original fee for t

93、he most important years of a productions exploitation for what is becoming a dominant medium of consumption.13.By way of comparison,actor John Hollingworth,on behalf of the British Equity Collecting Society(BECS),noted that,for previous generations of actors,the“backend pay from well-known shows in

94、the 1970s and 1980s was huge”;for contemporary actors,only those in franchises like Harry Potter receive these residual rates.53 As such,Mr Hollingworth noted that:“contracts have changed,backend remuneration has changed”and“yearly payments are starting to decline because of a lack of reciprocity”.5

95、4 Discussing the impact on artists,he told us:There is an expectation that actors can live on thin air and can survive until the next job,instead of getting fair pay for the hard work that they do and getting the residuals that they are very much in right of receipt of.It would be easy to assume,oka

96、y,I have been in lots of shows and have stood next to lots of famous people,but it is important to say that,even at my level,it is challenging year on year.55A 2023 survey of actors agents similarly found that 77%of actors felt that the growth of streaming had led to either no change or an overall r

97、eduction in fees received(accounting for inflation).56 Respondents also highlighted the prevalence of rights buyouts,lack of transparency around revenues and difficulties in enforcing contracts(due to power imbalances between parties)and primary concerns.Notably,in America,the WGA-SAG-AFTRA strike d

98、id manage to result in a tentative agreement with the AMPTP,whereby 49 British Equity Collecting Society Ltd(CRE0001).50 British Equity Collecting Society Ltd(CRE0001)51 Ofcom,Media Nations UK 2023,3 August 2023,pp.3452 Ibid.,pp.7853 Q354 Q455 Q656 British Equity Collecting Society Ltd(CRE0001)Creat

99、or remuneration 12creators secured gains to fixed residuals from streaming as well as foreign(non-US)residuals,success-based payments57 and,for actors,an additional payment distribution fund.58Case study:film and TV directors14.Directors have seen declines in revenues too.Most professional UK film a

100、nd TV directors only make between 1,000-3,000 per year in royalties.59 A significant reason for this is the way on which streaming services negotiate with directors at the start of production.As Andy Harrower,CEO of Directors UK,set out:“the system is that,at the point when you sign your employment

101、contract,you assign that copyright to the production company,either for nothing or for a buyout of that righthow can you possibly know at that stage what value or how successful that programme will go on to be?”.60 Delyth Thomas,whose work includes The Bill,The Story of Tracy Beaker and The Worst Wi

102、tch,noted that residual payments for directors can be particularly unreliable and often significantly lower than for other creative talent working on the production.6115.Testimonies we received from working,successful professional British directors,highlighted that residual payments were necessary t

103、o provide financial stability,such as during the“winter lull”or for childrens TV directors who typically work during the summer holidays,to cover necessities like food,childcare and mortgage payments professional requirements such as training,website hosting and domain name registration,IMDbPro memb

104、ership and other costs needed to maintain an online professional presence,as well as any emergency costs that might arise.62 Delyth Thomas also noted that residuals enabled successful directors to take time out of working to mentor young creatives pro bono in support of the talent pipeline.63Case st

105、udy:professional musicians16.As we found throughout our work on music streaming,professional musicians see very poor returns from streaming.Reflecting on the ecosystem as a whole,Professor David Hesmondhalgh of the University of Leeds observed from his research into musicians earnings that:It is imp

106、ortant to realise that a relatively small number of people earn substantial money from recorded music,compared with the number of musicians in the country.Many musicians are struggling,and streaming,even as it has grown,still represents a source of income for relatively few people.6417.VV Brown,a pr

107、ofessional singer-songwriter and board member of songwriter trade body the Ivors Academy,described how the rise of streaming had impacted her income:57 These residuals apply when the equivalent of 20 percent or more of a streaming services domestic subscribers watch a TV season or movie in the first

108、 90 days of an exhibition year.58“How SAG-AFTRAs Streaming Bonus Compares to Other Guild Deals”,Hollywood Reporter,13 November 202359 Directors UK(CRE0002)60 Q1261 Directors UK(CRE0002)62 Ibid.63 Ibid.64 Q9513 Creator remuneration Streaming has impacted my income massively.Even with a recouped balan

109、ce,I do not even look at my statements,because they make hardly any money.I speak on behalf of lots of artists in this position where we are not making the money that we should.I sold a lot of records and I dont even see my musical career as a way for me to survive,to eat,to pay school fees or to pu

110、t food on the table for my children.Music does not do that for me.Like I said earlier,I have other jobs.It is a very sad position.I would not say that I am Rihanna by any means,but I do represent a lot of the average artists on Spotify.If I,who have sold 2 million records,am not making any money,wha

111、t about the younger artists?What about the independent artists?We have to change this;we have to reform.6518.Nile Rodgers,reflecting on his own career,summarised these trends:“I have been doing this for 50 years of my life,and in 50 years,you would have thought that,with the advent of all the new te

112、chnologies,people like me would have a much better life,that things would be easier and we would all profit together,but that is not the case”.66 Dr Hyojung Sun of the University of York explained why this had not been the case:“the main reason for that is that the rights holders,who had power comin

113、g from the bulk of rights,found a way to reposition themselves in the new economics of music streaming”.67Private copying,storing and sharing on electronic devicesPrivate copying in UK law19.Even as streaming depresses royalties and residuals,UK creators do not have statutory rights to remuneration

114、for other uses of their works,which creators enjoy in other jurisdictions.One such use has existed for longer than streaming,but remains effectively unlicensed:private copying,whereby individuals can use digital devices to download,store,copy and share content for personal use.As Reema Selhi,Head of

115、 Policy and International at the Design and Artists Copyright Society(DACS),discussed:At the moment,we get a lot of royalties for relatively analogue uses for creative workphotocopying,reprography and educational broadcastingbut we have not followed the way people actually access,copy and download c

116、reative content.As we have heard,there has been a huge hunger for content and the way people use it.Our policy framework and our copyright framework has not kept up to date.6820.The UK Government has previously tried to legislate on private copying,albeit on a different basis to other countries.In 2

117、014,the Government made the Copyright and Rights in Performances(Personal Copies for Private Use)Regulations in order to provide an exception to the UK copyright framework for the copying of works made for private use(such as format-shifting,electronic storage or backing up)and non-commercial ends.6

118、9 65 Q15566 Q9367 Q9468 Q2169 The Copyright and Rights in Performances(Personal Copies for Private Use)Regulations 2014,reg.3 Creator remuneration 14Despite concerns,the Government insisted that the proposed exception had been narrowly drawnso that“if you lawfully own it,you can copy it,as long as y

119、ou do not give copies to other people”to,in theory,minimise harm to rightsholders.70 However,a report by the Joint Committee on Statutory Instruments drew the attention of both Houses of Parliament that“there will be a doubt whether the regulations are intra vires”on the basis that“no provision is m

120、ade in the draft Regulations for compensation”for rightsholders and that the Government would need“to satisfy a court that fair compensation should,in effect,mean no compensation”.71 Subsequently,judicial review of the regulations in the High Court concluded that the Governments inferences of“de min

121、imis harm”were inadequate given the evidence it received and that the exception was therefore unlawful.72 The regulations were quashed entirely a month later due to flaws in the consultation process itself.73 A press release by the IPO later announced that“the Government is not intending to take fur

122、ther action to reintroduce an exception”.7421.Other countries have taken a different position,implementing mechanisms to remunerate creators fairly for the private storing and copying of their creative works.Currently,45 countries require creators to be paid for private copying.75 This includes coun

123、tries that,similar to the UK,have significant cultural soft power and/or strategic economic interest in the creative industries,including Canada,Japan,France,Germany,Spain,Italy,Sweden and the USA;76 in the case of Germany,a mechanism has existed since the 1960s.77 This typically manifests as a smal

124、l levy on blank media and/or electronic devices,collected by CMOs,78 ranging from 0.1%(as in Spain until last year)to 1.3%(in France)of retail prices.79 In 2018 alone,private copying mechanisms generated for over 286 million in Germany,239 million in France and 110 million in Italy for creators.8022

125、.As a net creative industries exporter,UK creators also benefit from such schemes abroad.Data provided by BECS shows that,in 2021 alone,it received 8.3 million from foreign CMOs,more than 2.5 times greater than German CMO GVL,the next closest in terms of international revenue,due to the global popul

126、arity of British TV and film.81 In 2019,the difference was even more stark,with BECS receiving 5.7 million,almost 4.5 times as much as Spanish CMO AISGE,the next closest that year.82 In total,private copying remuneration from other countries is BECSs largest source of collections.83 In fact,compared

127、 to other types of statutory remuneration,private copying contributes 70 HL Deb,19 July 2014,cols 15531582 Lords Chamber71 Joint Committee on Statutory Instruments,Third Report of Session 201415,3rd Report-15 Statutory Instruments reported,HC 332-ii/HL Paper 972 R(British Academy of Songwriters,Comp

128、osers and Authors and others)v Secretary of State for Business,Innovation and Skills 2015 EWHC 1723(Admin),19 June 201573 R(British Academy of Songwriters,Composers and Authors and others)v Secretary of State for Business,Innovation and Skills 2015 EWHC 2041(Admin),17 July 201574“Quashing of private

129、 copying exception”,Intellectual Property Office press release,20 July 201575 The Smart Fund,The Smart Fund Report:Levelling up communities,creators and performers through innovative funding(24 September 2021),pp.89;see also Qq20176 Ibid.77 Q23;see also World Intellectual Property Office,Internation

130、al Survey on Private Copying:Law&Practice 2012(24 October 2012),p.378 Q2279 The Smart Fund,The Smart Fund Report:Levelling up communities,creators and performers through innovative funding(24 September 2021),p.1980 Ibid.,p.1181 British Equity Collecting Society Ltd(CRE0001),schedule 382 Ibid.83 Ibid

131、.,para 215 Creator remuneration almost 39%(63 million overall)of actors and performers revenuessignificantly more than the combined revenues from TV broadcasts(21%,34 million overall)and streaming(7%,11 million).8423.Introducing a statutory private copying scheme as an amendment to the copyright fra

132、mework in the Copyright,Designs and Patents Act 1988 would have two significant benefits for UK creators:Providing a new,additional domestic revenue stream,which advocates estimate will generate between 250300 million per year;85 Safeguarding payments from other countries with private copying scheme

133、s due to reciprocity of arrangements between the UK and those countries(and,given that the UK is a net exporter of creative works,will ensure a greater inflow to the UK creative industries than any outflow from domestic revenues to creators abroad).86As the UK is a net creative industries exporter,B

134、ritish creators will receive more in reciprocal payments from other countries than the domestic scheme would send abroad.24.On the safeguarding of payments,evidence from BECS and Directors UK in particular has indicated that payments from other countries may decline or be lost altogether due to a la

135、ck of reciprocity with the UK,affecting those whose IP is nonetheless exploited in those countries.87 Indeed,the national law of many EU countries specifically prohibits their CMOs from paying to third country counterparts where there are no statutory private copying schemes.Written evidence from Jo

136、hn Hollingworth disclosed that his private copying remuneration exceeded 2,500 in 2021 and 2022 but has since declined,while Red Dwarf and Death in Paradise actor Danny John Jules pointed out that“no matter how popular UK films and series are and how often our work is on TV in those countries,we won

137、t get the statutory payments we used to get and which we relied on to keep us going”.88 In order to meet these requirements,any UK scheme must similarly have a statutory footing.89Proposals for a private copying scheme25.Pre-empting the need to implement a private copying scheme to,at minimum,safegu

138、ard payments from abroad,a group of UK CMOs across the creative industries90 has developed a proposal for a statutory mechanism called the“Smart Fund”.Building on the“established principle in rights management that service providers pay rightsholders so that the users dont have to”,the Smart Funds b

139、ackers propose that“technology manufacturers would pay a small fraction of the value of each device they sell into a fund that can be paid out to creators,with a portion flowing to local community projects with 84 Ibid.,schedule 585 The Smart Fund,The Smart Fund Report:Levelling up communities,creat

140、ors and performers through innovative funding(24 September 2021),p.1986 British Equity Collecting Society Ltd(CRE0001);Directors UK(CRE0002)87 Q4;British Equity Collecting Society Ltd(CRE0001);Directors UK(CRE0002)88 Ibid.89 British Equity Collecting Society Ltd(CRE0001),paras 3790 This includes ALC

141、S,BECS,DACS,Directors UK and PICSEL(the Picture Industry Collecting Society for Effective Licensing,also representing visual artists).Creator remuneration 16a focus on digital creativity and skills”.91 In terms of payments to community projects,Reema Selhi cited similar schemes implemented in France

142、 and Germany,where“10%to 15%of that is deducted and goes into national arts and culture funding”such as“education,access to culture and access to music and schools”,and proposed that a UK equivalent“could be supplementary to Arts Council funding”.9226.Discussing the specific form that the scheme cou

143、ld take,however,Reema Selhi stated that the Smart Fund proponents were ultimately agnostic,as long as any scheme was adequate to trigger reciprocity with schemes from abroad:Because we are in a unique position outside of the European Union,we can cherry-pick from the best parts of the schemes overse

144、as.We can look to France,for example,where they decide who pays for their private copy levy through an independent commission,which is appointed by the Minister of Culture.Canada has a copyright board that decides what types of tariffs should apply to different devices;that could be,for example,the

145、Copyright Tribunal in the UK.93It was mentioned that France,for example,has recently applied the scheme to refurbished devices,94 whilst a 2022 ruling by the Court of Justice of the European Union held that fair use reproduction also applies to cloud storage and other cloud computing services.9527.D

146、uring our session with the Smart Funds proponents,we queried whether such a levy would be passed to consumers.Indeed,we heard that,during initial discussions between the CMOs and DCMS in 2022,Julia Lopez MPthe then-Minister for Digital and currently jointly Minister for Data and Digital Infrastructu

147、re and for Media,Tourism and Creative Industrieshad similarly raised concerns about the impact on consumers,leading to the former commissioning a“wide-ranging economic study on consumer impact”,exploring the inflationary impact on devices over a ten year period.96 This independent analysis by Fronti

148、er Economics of the data on the pass-through of private copying levies to consumers found that there was no empirical evidence that device prices are higher in countries that have higher per device levies(and in fact observed the opposite relationship to some extent)nor that changes in levy tariffs

149、result in equivalent changes in device prices.9728.This trend was observed,for example,for Apple products across France,the Netherlands and Spain,where the price remained the same across all countries despite the tariff levied at 1.5%,0.8%and 0.12%respectively;instead,demand and price were instead i

150、nfluenced by branding and reputation,within-country competitive dynamics,91 The Smart Fund,How will the Smart Fund work?,accessed 5 February 2024;The Smart Fund,The Smart Fund Report:Levelling up communities,creators and performers through innovative funding(24 September 2021),p.1292 Qq27893 Q2194 Q

151、2395 Dentons,Private copy levy for reproduction in cloud computing storage,30 March 202296 Qq24597 Frontier Economics,Pass-through of private copy levies to electronic devices:Analysis for DACS(14 October 2022),p.217 Creator remuneration marketing,cross-border constraints and menu costs.98 In fact,t

152、hese findings have been corroborated from Government-commissioned research,published in 2012 by the IPO.99 As Reema Selhi summarised:If anything,people in the UK still pay more for their devices than people in countries that have these levies in place and so there has been no risk of selling oversea

153、s.In some countries where the tariffs have changed over timeat one point a tariff had dropped down to almost zero after a court caseno saving was passed on from the consumer.We have also heard from one of our societies in Austria that,according to consumer research,because the private copy levies ha

154、ve been in place for so long,no one knows about them.100John Hollingworth similarly posited that“the amount of the levy would be down to the legislator and down to further discussions with different committees,but people would not mind paying 2 to 3 when they buy a smartphone or a smart TV or a simi

155、lar device every four,five or six years,if it guarantees that the actors who are able to be watched on that device benefit from that Smart Fund”.101 Disappointingly,our witnesses noted that,since the initial discussions in 2022,they have received no response either from the Department,from individua

156、l tech companies or from the trade body techUK.10229.Revenue from private copying from abroad is an important source of income for creators,remunerating them for the use of their works that is integral to the demand for electronic devices.Not only does a lack of such a scheme in the UK prevent Briti

157、sh creators from receiving payments from the domestic market,but it has also put their payments from abroad under threat due to a lack of reciprocity with other countries.We recommend the Government work with the UKs creative industries to introduce a statutory private copying scheme,which,at minimu

158、m,safeguards reciprocal payments from abroad,to be produced within the next twelve months.Artificial intelligence30.Even as threats to existing private copying arrangements require a focus on current technologies,emerging tech continues to be of concern to the creative industries.Our report on Conne

159、cted tech:AI and creative technology,published in July 2023,focused on the immediate threat to intellectual property in the creative industries posed by what we described as the Governments potentially disastrousand since abandonedproposals for a blanket exemption for artificial intelligence(AI)deve

160、lopers to use creative works to train their systems.103 This process,called text and data mining(TDM),creates datasets from internet-scale text and other media to identify and extrapolate relationships,patterns and trend from those data.98 Ibid.,pp.4599 Intellectual Property Office,Private Copying a

161、nd Fair Compensation:An empirical study of copyright levies in Europe(28 March 2012),p.7100 Q24101 Q26102 Qq256103 Culture,Media and Sport Committee,Eleventh Report of Session 202223,Connected tech:AI and creative technology,HC 1643,paras 2233 Creator remuneration 1831.AI developers have been vocal

162、in articulating their demands for a more permissive copyright regime:104 as recently as January 2024,Sam Altman,the CEO of the$100 billion company OpenAI,developers of generative AI tool ChatGPT,told the House of Lords Communications and Digital Committee that“because copyright today covers virtuall

163、y every sort of human expressionincluding blog posts,photographs,forum posts,scraps of software code,and government documentsit would be impossible to train todays leading AI models without using copyrighted materials”.10532.Creative industries and media organisations have voiced concerns that AI de

164、velopers have been exploiting their work illicitly,without seeking licence agreements with or providing fair compensation for rightsholders,and otherwise claiming that using creative works in this way is not copyright infringement.106 Similarly,a survey of visual artists about AI,published in Januar

165、y 2024,found that approximately 95%of artists felt that they should be asked,credited and compensated if AI models were or have been trained on their works,and 22%had already identified their work as having been used for AI training.107 84%of respondents to the survey said that they would sign up fo

166、r a licensing mechanism where they were paid for use of their work by AI.108 Summarising the findings,Christian Zimmermann,CEO of the Design and Artists Copyright Society(DACS),said that it was“imperative for the government to act,offering stronger protection for artists and their creations”.10933.O

167、ur previous report called on the Government to“work to regain the trust of the creative industries following its abortive attempt to introduce a broad text and data mining exemption”,such as by“being clear that licences are required to use copyrighted content in AI”and“acting to ensure that creators

168、 are well rewarded in the copyright regime”.110 We also recommended that the Government should“proactively support small AI developers in particular,who may find difficulties in acquiring licences”.11134.Since our Connected tech report,we have also explored the impacts of AI outputs on the creative

169、industries.Paul Clements,CEO of the Music Publishers Association(MPA),for instance,speculated that,although AI“might not yet be ready to compete effectively with human authored content,it will get there”and“certainly could be synchronised for music in a BBC TV drama,an ITV drama or something on Netf

170、lix”,which“in turn deprives creators of the combined revenues that they can collect from the use of their music”.112 Speaking about the impact of AI on visual artists,Reema Selhi stated that“a lot of artists see that their work has been ingested as part of AI training”and“then the outputs look so in

171、credibly similar to theirs that it effectively competes with them in the marketplace”.113 Craig Peters,CEO of image library Getty Images,which is suing an AI 104 Q87105“OpenAI warns copyright crackdown could doom ChatGPT”,The Telegraph,7 January 2024106 Q87;“British media and creative industries qui

172、zzed over AI risks to copyright”,The Financial Times,21 August 2023107 Design and Artists Copyright Society,Artificial Intelligence and Artists Work:A survey of artists on AI(18 January 2024),pp.810108 Ibid.,p.10109“New survey shows 89%of UK artists want the Government to better protect their work b

173、y regulating AI”,Design and Artists Copyright Society press release,18 January 2024110 Culture,Media and Sport Committee,Eleventh Report of Session 202223,Connected tech:AI and creative technology,HC 1643,paras 312111 Ibid.,para 31112 Q166113 Q3119 Creator remuneration image generator for copyright

174、infringement,described the Governments approach as“a bit of a perplexing trade-off”.114 Nicola Solomon,Chair of the Creators Rights Alliance(CRA)and CEO of the Society of Authors,asserted that there was a need for both“good licensing regimes”and“good enforcement mechanisms”to ensure transparency aro

175、und inputs and outputs and fair compensation for creators,and a bullish IPO“to stand up and say that it is copyright infringement”.11535.Actor John Hollingworth similarly stated that“AI is absolutely a real problem that is stripping jobs from British actors as we speak”.He highlighted three particul

176、ar areas of concern:Voiceover work,which is relatively well-paid and available for performers,but where they are already facing a wide-scale threat from AI-powered speech synthesisers(computer systems that produce human speech);116 Animation,impacting visual effects(VFX)artists and animators as well

177、 as performers;and Image rights in live action film and TV,with Mr Hollingworth describing how,for a major film,that“as part of the filming,all actors and scenic artists extras had to be scanned by a series of cameras to have our likenesses captured for the visual effects arm of the film,to animate

178、us,to take the actors body and composite together and create an army of thousands of people”,with no contractual clarity over how those scans might be used long-term.117Indeed,these concerns were one of the key disputes in the industrial action taken by the WGA and SAG-AFTRA against the AMPTP.118 Re

179、cent reports concerning voice actors in the video game industry suggest this will remain an ongoing issue in future.11936.In its response to our Connected tech:AI and creative technology report,the Government cited both its proposals for a voluntary code of practice on copyright and AI(through an in

180、dustry-led working group of rightsholders and AI developers)to codify rights to protect performers reputations,120 and its plans to explore the case for stronger protections for creators against generative AI as evidence of its work to rebuild trust with the sector.121 Notably,the Governments announ

181、cement of the working group stated that“if the code of practice is not adopted or agreement is not reached,legislation could be considered”.122114“Back UK creative sector or gamble on AI,Getty Images boss tells Sunak”,The Guardian,14 January 2024115 Q87116 See also:“How actors are losing their voice

182、s to AI”,Financial Times,1 July 2023117 Q14118 Q13;“Bargaining for our very existence:why the battle over AI is being fought in Hollywood”,The Guardian,22 July 2023119“Gaming voice actors blindsided by garbage union AI deal”,BBC News,11 January 2024120 These refer to the rights set out in the Beijin

183、g Treaty on Audiovisual Performances,which provides performers with an“attribution right”,where they can claim to be identified as the performer,and an“integrity right”,where they can object to any distortion,mutilation or other modification of their performance that would be prejudicial to their ho

184、nour or reputation.The Government had previously committed to implementing and ratifying the Treaty but had not taken any action on this until the publication of our report in August.A consultation on options,including draft legislation,subsequently ran from September to November and provisions are

185、now expected to come into force in the latter half of 2024.121 Culture,Media and Sport Committee,Third Special Report of Session 202324,Connected tech:AI and creative technology:Government Response to the Committees Eleventh Report of Session 202223,HC 441,pp.56122“The governments code of practice o

186、n copyright and AI”,Intellectual Property Office press release,29 July 2023 Creator remuneration 2037.Despite these initiatives,the Governments stance received criticism from the creative industries.The cross-sector panel of CMOs we heard from,for example,supported our report and recommendations.123

187、 Barbara Hayes,CEO of the Authors Licensing and Collecting Society(ALCS)has said that:it is disappointing that the Government has not taken this opportunity to reassure creators by accepting calls from the Committee to review licensing frameworks.Without a clear plan to review licensing schemes,or i

188、ndeed to develop a transparent copyright framework through properly administered licensing and permissions regimes,this remains a missed opportunity to reassure creators that their works will not be used without consent or fair remuneration in the development of AI and its outputs.124The MPAs Paul C

189、lements told us that“there is a huge black cloud hanging over us in that we do not seem to have been able to make progress with the UK Government or IPO yet on laying down a proper regulatory framework that protects the interests of creators,whether they be musicians,authors or screenwriters”.12538.

190、These criticisms were subsequently borne out when the Government published its response to the consultation on its AI Regulation White Paper,which announced that“unfortunately,it is now clear that the working group will not be able to agree an effective voluntary code”and that“ministers will now lea

191、d a period of engagement with the AI and rights holder sectors,seeking to ensure the workability and effectiveness of an approach that allows the AI and creative sectors to grow together in partnership”.12639.Despite our previous recommendations that the Government win back the trust of creators reg

192、arding their concerns over AI,its working group has not been able to bring forward a code of practice on AI and intellectual property.Although the Government asserted that it could consider legislating were agreement not reached,it has not indicated that it will do so.It is unlikely that simply cond

193、ucting a further period of engagement with the sectors,with no clarity over its overall aims,will have any meaningful effect.We are concerned that the status quo simply favours AI developers,given creators concerns that their IP is already being used in AI development without licence or any practica

194、l means of recourse.40.The Government must ensure that creators have proper mechanisms to enforce their consent and receive fair compensation for use of their work by AI developers.It should set out measurable objectives for the period of engagement with the AI and rightsholders sectors,which it has

195、 said ministers will lead on,and provide a definitive deadline at which it will step in with legislation in order to break any deadlock.We will continue to monitor developments in this area and recommend that our successor Committee do the same next year.123 Q30124“ALCS calls for greater safeguards

196、for creators and copyright”,Authors Licensing and Collecting Society press release,16 January 2024125 Q166126 Department for Science,Innovation&Technology,A pro-innovation approach to AI regulation:government response,CP 1019,6 February 2024,paras 293021 Creator remuneration 2 Freelancing and contra

197、ctual termsThe prevalence of freelancing41.Freelancers and the self-employed127 comprise a significant minority of the creative workforce.A 2017 report by the Creative Industries Federation(a predecessor to Creative UK)128 found that the roles that freelancers fill in the wider creative economy rang

198、e from creators themselvesincluding artists,designers,directors,photographers,producers,writers,and so onto engineers,programmers and riggers to agents,coaches,consultants and stylists.129 DCMSs economic estimates for its sectors,published in July 2023,classified 675,000 filled jobs in the creative

199、industries as self-employed during the 2022 calendar year out of a total of almost 2.4 million.130 Indeed,the rate of self-employment in the sector has remained around 32%(albeit varying somewhat between 28%to 35%)during the last ten years,compared to 16%for the economy as a whole.131 Statistically,

200、creative freelancers are more prevalent in Scotland and South West England and significantly less prevalent in Northern Ireland.132 The cultural sector,which DCMS defines as“those industries with a cultural object at the centre of the industry”and has significant overlap with the creative industries

201、,133 is even more reliant on self-employment than the creative industries,with approximately 47%of the UK-wide workforce working on a freelance basis in 2022,equivalent to 327,000 jobs out of 694,000.134Advantages of the freelance model42.Freelancing can have several benefits for creators and other

202、professionals in the creative industries.Primarily,freelancing may give creators more creative control over their work by being able to pursue the projects they want to pursue and reject other work.135 Beyond this,many creative professionals may have skills that are too specific or specialist for co

203、mpanies to need to employ on a full-time basis.The 2017 Creative Industries Federation report noted that animators,VFX artists,translators and other jobs were often 127 While the terms“freelancer”and“self-employed”are often used interchangeably,given that neither term is explicitly defined within em

204、ployment law,they refer to slightly different things.“Self-employed”people are those who are owners of a company or their own boss and are responsible for how and when they work but have few employment rights.“Freelancers”usually refers to people who are engaged by a company directly on flexible con

205、tracts,through their own company(overlapping with the self-employed)or through other companies.128 The Creative Industries Federation,a non-profit advocacy organisation,merged with Creative England,a publicly-and privately-funded screen sector agency,in November 2021 to form Creative UK.129 Creative

206、 Industries Federation,Creative Freelancers(17 July 2017)130 Department for Culture,Media and Sport and Department for Science,Innovation and Technology,Economic Estimates:Employment in DCMS sectors and Digital sector,January 2022 to December 2022,28 July 2023131 Q12;Creative Industries Policy and E

207、vidence Centre,National Statistics on the Creative Industries,28 June 2022;see also Q51132 Department for Culture,Media and Sport and Department for Science,Innovation and Technology,Economic Estimates:Employment in DCMS sectors and Digital sector,January 2022 to December 2022,28 July 2023133 Depart

208、ment for Culture,Media and Sport,DCMS Sector Economic Estimates:Methodology,8 December 2022.The cultural sector includes:film,TV,music and radio(all of which overlap with the creative industries);heritage(which overlaps with the tourism sector);arts and museum activities(both of which also overlap w

209、ith both the creative industries and tourism)and retail of music and video recordings,manufacture of musical instruments and reproduction of recorded media.134 Department for Culture,Media and Sport and Department for Science,Innovation and Technology,Economic Estimates:Employment in DCMS sectors an

210、d Digital sector,January 2022 to December 2022,28 July 2023135 Qq9 Andy Harrower,11 John Hollingworth;Creative Industries Federation,Creative Freelancers(17 July 2017),pp.102 Creator remuneration 22outsourced.136 Other professionals surveyed for the report noted that freelancing gave them the flexib

211、ility to work remotely,balance caring responsibilities(particularly for mothers,whose prevalence in the freelance workforce rose 79%between 2008 and 2016)and/or start and build a business around a creative passion.13743.Businesses across the creative industries,or those that contract creative profes

212、sionals,are also incentivised to rely on freelancers to a significant extent.Many creative industries businesses work on a project basis and therefore have differing job specifications between individual projects.138 As actor John Hollingworth,on behalf of BECS,explained:Often film and television co

213、mpanies are put together as special vehicles to limit their liability.They are put together as a legal tax entity to make the thing and then they are shut down quickly afterwards.That mechanism requires freelancers to come in and work for them.It happens a lot in film.The money is put together,it is

214、 corralled,it is green-lit,it is made and then that entity is disbanded afterwards.It is literally a special vehicle just to deliver that particular job.They work on a freelance model.139Freelancers can provide businesses with particular expertise and skills to a company and allow them to be more am

215、bitious in their projects.140 Businesses may also benefit financially by contracting freelancers because they do not need to pay employer national insurance contributions.141 Illustrating the sectors reliance on freelancing,pre-Covid statistics produced by the Creative Industries Policy and Evidence

216、 Centre(PEC),found that 41%of companies worked with as many or more freelancers than they had employees,and 75%of creative industries companies had worked with a freelancer in that calendar year.142Downsides for professional creatorsLack of choice44.John Hollingworth and Andy Harrower,CEO of Directo

217、rs UK,both posited that the theoretical benefits of creative control and flexibility only manifest for creators in certain subsectors,and even then,only in certain conditions(for example,there being a favourable climate for commissions and opportunities);otherwise,most professional,even well-establi

218、shed,creators face concerns about securing the next job even while contracted and may not have the luxury of declining work.143 A February 2024 report by the Broadcasting,Entertainment,Communications and Theatre Union(Bectu),a sector of the trade union Prospect,found that,in the freelancer-reliant s

219、creen sector,68%of film and TV workers are not currently working,mainly due to industry slowdowns.144 This 136 Creative Industries Federation,Creative Freelancers(17 July 2017),pp.102137 Ibid.,pp.134;see also Q9 Andy Harrower138 Qq9,48,51;Creative Industries Federation,Creative Freelancers(17 July 2

220、017),pp.102139 Q9140 Freelancers in the arts and creative sectors,House of Lords Library,9 June 2023141 Ibid.142 Creative Industries Policy and Evidence Centre,Freelancers in the Creative Industries(14 May 2021),p.1143 Qq2,9,11144 Bectu,UK film and TV industry:a sector in crisis(26 February 2024),p.

221、323 Creator remuneration was only marginally better than in September 2023,when 74%were not working.145 As John Hollingworth told us:“much of the job,both for me and for my agent,is based on trying to get the next job;it is a struggle”.14645.Many respondents to the survey underpinning the 2017 Creat

222、ive Industries Federation report noted that they had become self-employed after being made redundant or felt forced to become freelance for reasons of poor health,147 while another survey,undertaken by social enterprise Creative Access in 2023,found that disabled creative professionals were more lik

223、ely on average to go freelance due to redundancy or experiencing toxic working environments.148 As Caroline Norbury told us:“almost a quarter of disabled creative professionals become a freelancer due to negative experiences in a permanent role”and“disabled individuals are 30%more likely to be freel

224、ancing after negative permanent role experience”.149Poor rates of pay46.As with self-employed people outside the creative economy,creative freelancers may also lose access to employment rights such as holiday pay,sick pay,pensions and the minimum wage,which can impede maintaining a healthy work-life

225、 balance.150 Research based on surveys of freelancers working in the creative industries by the Association of Independent Professionals and the Self Employed(IPSE)in 2016 found that the average freelancer spent 15.5 days a year on average working for free and lost almost 5,400 to this unpaid work.1

226、5147.The issue of low pay is pervasive across both the public and private sector.Reema Selhi,Head of Policy and International at DACS,told us that,“from studies in the visual arts sector,we have seen that artists earn on average 2.60 an hour when they work in publicly funded institutions”.152 Creati

227、ve UK submitted that 54%of freelancers claimed that they had been offered a day rate or salary below their level of expertise or experience153 while the 2023 Creative Access survey found that half experience regular late payment.154 A submission from Directors UK noted that remuneration for director

228、s is deteriorating further,as freelancers pay rates have been frozen(and are therefore falling in real terms)while“six-day week contracts”and no overtime pay are becoming more common,despite paid overtime being standard for other key members of crew.155 Because of a lack of collective bargaining or

229、transparency around pay,pay negotiations can be undermined by fears of being undercut or undervalued.15648.Often,creators are encouraged to work for no pay whatsoever.From the 2016 IPSE survey,54%of respondents said that they had worked for free in the hope of“gaining exposure”a euphemistic term for

230、 theoretical payment in kind promising public 145 Ibid146 Q2147 Qq7,39,55;Creative Industries Federation,Creative Freelancers(17 July 2017),p.14148 Creative Access,Freedom or working for free?Freelancers in the creative economy(21 March 2023),p.5149 Creative UK(CRE0003)150 Directors UK(CRE0002);Free

231、lancers in the arts and creative sectors,House of Lords Library,9 June 2023151“Freelancers are Losing 5k a Year to Free Work”,Musicians Union press release,14 November 2016152 Q11153 Creative UK(CRE0003)154 Creative Access,Freedom or working for free?Freelancers in the creative economy(21 March 2023

232、),p.8155 Directors UK(CRE0002)156 Q55;Directors UK(CRE0002)Creator remuneration 24promotion of a creators workand 45%had worked for free to be associated with a reputable brand.157 Highlighting individual subsector trends,according to research by the Musicians Union,71%of musicians have been asked t

233、o work for free and 54%are regularly asked to work for exposure.158 Matt Dowling,chief executive of the Freelancer Club,a membership organisation campaigning to end exploitative unpaid work,has written that it is difficult to quantify whether exposure even leads directly to remuneration further down

234、 the line,saying that“most creative professionals will secure paid work at some point,so you cant draw a direct correlation”.159 Anecdotal evidence from workers in the creative industries suggests that requests to work for free do not desist even as creators become more established.160 One in five c

235、reative freelancers claimed during the IPSE survey that working for free was in fact standard practice in their subsector.16149.Freelancers also face structural barriers to progression.In the 2017 Creative Access survey,50%of respondents cited a lack of opportunities for training and professional de

236、velopment and a greater difficulty to progress or secure promotions as the biggest disadvantages to freelancing,after unpaid holiday(60%).162 As Nicola Solomon,Chair of the Creators Rights Alliance(CRA)and CEO of the Society of Authors,stated:One of the issues that has not yet been commented on is w

237、e have often heard DCMS called“the Ministry of Fun”.This is about people taking creative work seriously and what creators do seriously as work,and not being able to cite this fantasy of the artist and say,“You would do this anyway.You would do it for no pay.”163Working conditions50.As we have explor

238、ed previously in our report Reimagining where we live:cultural placemaking and the levelling up agenda,poor working conditions have also impacted the viability of the creative industries as a career.164 Nicola Solomon of the CRA and Caroline Norbury,CEO of cross-sector body Creative UK,highlighted s

239、everal practices where working conditions,contracts and terms of employment were often unfair,including:An array of contract formats,with many people on unwritten contracts,165 or elsewise a vast variety of terms of conditions and agreements creating,a culture of uncertainty and inconsistencies in t

240、he use of contracts;166 A general lack of support and training in how to handle contract negotiations or paperwork,coupled with prohibitions against union bargaining;167157“Freelancers are Losing 5k a Year to Free Work”,Musicians Union press release,14 November 2016158 Musicians Union,Empowering Mus

241、icians to Say No to Unpaid Work,accessed 4 September 2023159“Creative careers:is it ever worth working for exposure?”,The Guardian,9 July 2018160 Ibid.;see also Directors UK(CRE0002)161“Freelancers are Losing 5k a Year to Free Work”,Musicians Union press release,14 November 2016162 Creative Access,F

242、reedom or working for free?Freelancers in the creative economy(21 March 2023),p.9163“Freelancers losing 5k a year due to unpaid work”,Freelancer News,24 October 2016164 Digital,Culture,Media and Sport Committee,Third Report of Session 202223,Reimagining where we live:cultural placemaking and the lev

243、elling up agenda,HC 155,paras 59,623,805165 Q55166 Small Business Commissioner,Poor Payment Practice in the Creative Sectors:Actions for Change(April 2020),p.7167 Q5525 Creator remuneration A lack of proper accounting168 and consistent late payments,with the Small Business Commissioner finding that

244、41%of creative businesses and freelancers are consistently paid late,43%to 55%have never been paid for some work carried out and that avergae delays have been increasing;169 No HR support,which can lead to a lack of advice and poor outcomes when facing work-related issues;170 A lack of robust and co

245、nsistent action on bullying,harassment and discrimination,evidenced by the mixed response to the new Creative Industries Independent Standards Authority,including a disappointing lack of response from Apple and Netflix.17151.In response to our Reimagining where we live:cultural placemaking and the l

246、evelling up agenda report,the Government pointed to the fact that it had part-funded the PECs Independent Review into Job Quality and Working Practice in the Creative Industries as evidence of its commitment to tackling poor working conditions.172 Looking across four broad policy areas,the resulting

247、“Good Work Review”made several achievable recommendations,including to:strengthen social protections for creative freelancers;strengthen the voice of freelancers and marginalised groups;co-design Good/Fair Work Standards for the sector and introduce a tiered accreditation programme;and require all o

248、rganisations in receipt of funding or participating in major events sign-up to those principles.173 The Government has not taken steps to implement these recommendations in the year since,despite calls from across the sector to do so.174A freelancer-specific support52.The Creative Industries Policy

249、and Evidence Centre(PEC)has asserted that,because freelancers are not a specific category,they have historically lost out on major policy initiatives from government interventions on skills,immigration and post-Covid emergency support.175 As we set out in our report Reimagining where we live:cultura

250、l placemaking and the levelling up agenda,this is one of the key reasons why the sector fares so poorly in terms of geographic disparities and social mobility.176 The status of freelancers creates particular challenges where groups face structural barriers to inclusion and thus would benefit from su

251、ch interventions.Because of these issues,the PEC has concluded 168 Ibid.169 Small Business Commissioner,Poor Payment Practice in the Creative Sectors:Actions for Change(April 2020)170 Q48171 Qq4850,7685172 Digital,Culture,Media and Sport Committee,Sixth Special Report of Session 202223,Reimagining w

252、here we live:cultural placemaking and the levelling up agenda:Government Response to the Committees Third Report,HC 1104,p.19173 Creative Industries Policy and Evidence Centre,Good Work Review:Job Quality in the Creative Industries(22 February 2023).The four areas covered were:i)strengthening the ba

253、seline of protection for creative workers;ii)driving improvements in management capability;iii)enhancing professional development amongst the workforce;and iv)improving worker representation.174 Q58;Creative UK(CRE0003)175 Creative Industries Policy and Evidence Centre,Freelancers in the Creative In

254、dustries(14 May 2021);Freelancers in the arts and creative sectors,House of Lords Library,9 June 2023176 Digital,Culture,Media and Sport Committee,Third Report of Session 202223,Reimagining where we live:cultural placemaking and the levelling up agenda,HC 155,paras 59,623,817 Creator remuneration 26

255、that the current“one-size-fits-all”approach to creative industries and employment policymaking“doesnt work for creative freelancers”and has called for“targeted support for freelancers”for“the long-term health of the creative sector”.177Proposed solutionsA“Freelancers Commissioner”53.Voices across th

256、e sector have called for the Government to create a Freelance Commissioner to advocate for the needs of freelancers,including within the creative industries.Ahead of the 2020 Spending Review,a coalition comprised of the Creative Industries Federation,Federation of Small Businesses,IPSE and the union

257、 Prospect called on then-Chancellor of the Exchequer Rishi Sunak MP to establish a Freelance Commissioner and a Future Workforce Commission to“build more resilience into this workforce and ensure no worker falls through the gaps”.178 The group said that the proposed position would have a remit to“wo

258、rk closely with this group to drive change in government and business,turning ideas into action and eradicating red tape”.179 The proposal has since been endorsed by creative industries cross-and subsector trade bodies,as well as the PEC and parliamentarians,including the all-party parliamentary gro

259、ups for creative diversity,visual arts and writers.18054.The UK Government and devolved administrations have created a series of“commissioner-style”roles in recent years,and this trend is typical in other countries too,who have inspired and been inspired by the UKs creation of such posts.181 Whilst

260、commissioners are not technically a distinct type of position within government,the Institute for Government nonetheless identifies common themes attached to such roles,including providing“a degree of independent scrutiny of government activity”,“promoting a particular interest”and“giving under-repr

261、esented groups a voice”.18255.Several different commissioner models exist,including:individual commissioners,who are advocates of a particular constituency,such as the Victims Commissioner,Childrens Commissioner and Independent Anti-Slavery Commissioner;independent statutory arms length bodies(ALBs)

262、that monitor government performance in certain areas,such as the Equality and Human Rights Commission,Social Mobility Commission and the now-defunct Commission for Rural Communities;and“tsars”,non-statutory personal ministerial appointments to bring coherence and progress on an issue.183 These roles

263、 can be contrasted to officeholders with regulatory functions who nonetheless carry the title of“commissioner”,such as the Commissioner for Public Appointments and the Investigatory Powers Commissioner.56.Throughout our first oral evidence session,industry voices set out the prospective remit and fu

264、nctions,likely avenues of inquiry and the advantages of a Freelance Commissioner.177 Creative Industries Policy and Evidence Centre,One size cant fit all,4 May 2021178“Prospect joins call for new Freelance Commissioner”,Prospect press release,20 November 2020179 Ibid.180 Freelancers in the arts and

265、creative sectors,House of Lords Library,9 June 2023;All-Party Parliamentary Group for the Visual Arts,APPG Visual Arts Creative Freelance Commissioner Briefing,accessed 9 January 2024;All-Party Writers Group,APWG roundtable on Freelancer Commissioner proposal,accessed 9 January 2024181 Institute for

266、 Government,How to be an effective commissioner(February 2021),pp.101182 Ibid.,pp.810183 Ibid.,p.827 Creator remuneration Providing advocacy for freelance workers and expert knowledge of how the freelance sector intersected with the creative industries within government were considered most vital fo

267、r its remit.184 Richard Combes,Head of Rights and Licensing and Deputy CEO of ALCS,and Nicola Solomon also told us that a Commissioner should be given“genuine oversight”over policymaking in areas where freelancers are acutely affected,such as pay,taxation and benefits,pathways into industry and empl

268、oyment rights,with the power to make interventions on behalf of the sector.185 PEC also suggested that the Commissioner could to“come up with a strategy to ensure clear government communication of key policy initiatives to a fragmented freelancer workforce”.18657.Discussing prospective areas of inqu

269、iry for such a commissioner,Richard Combes agreed with the suggestion that consideration should be given to finding sustainable alternatives to apprenticeship schemes and to discerning how parental leave could be applied in freelancer-reliant subsectors.187 Reema Selhi posited that a commissioner wo

270、uld address the disparate departmental responsibilities for freelancers,which intersect with HM Treasury and the Departments for Business and Trade and Work and Pensions at minimum,alongside DCMS;188 this would contrast with DCMSs current engagement with industry through the Creative Industries Coun

271、cil,which engages only with DCMS ministers and officials.Richard Combes asserted that appointing a commissioner would also reflect a lesson learned from the problems highlighted by the pandemic where,“despite the programmes that the Government put in place to support work,many freelancers fell throu

272、gh the gaps due to qualification issues”.18958.Freelancers make up a significant portion of the creative workforce but lack a single clear voice representing their interests to Government.This has resulted in a decline in pay and conditions that will cause long-term harm to the sector.We recommend t

273、hat the Government appoint a Freelancers Commissioner,with appropriate powers and cross-departmental oversight,to advocate across Government in the interests of creative freelancers,and of other freelance and self-employed people more broadly.Fair contractual terms for creators59.The CRA,as a coalit

274、ion of 23 major creator-led groups,has been campaigning to address through their Pay the Creator and Fair Terms for Creators campaigns the disparity in pay between creative professionals and other sector workers and to tackle the inequality in bargaining power between creators and those who exploit

275、their work.The Fair Terms for Creators campaign in particular sets out seven CREATOR principles:Clarity:Clear,written contracts,negotiated promptly and with transparency,setting out the exact scope of rights that are granted/assigned/licensed over intellectual property184 Qq12,189,25,589185 Q12186 C

276、reative Industries Policy and Evidence Centre,Freelancers in the Creative Industries(14 May 2021),p.2187 Qq12,37188 Qq189,25189 Q12 Creator remuneration 28 Remuneration:Fair,equitable and unwaivable remuneration for each use or exploitation(e.g.,sales,broadcasts,rentals,streaming,etc)of work,includi

277、ng“bestseller clauses”where creators share in revenues if a work does far better than expected even if their rights were assigned Exploitation:“Use-it-or-Lose-it”clauses covering all modes of exploitation Accounting:Fair,understandable and comprehensive accounting clauses Terms:Reasonable contract t

278、erms,with adjustment mechanisms for new forms of exploitation,underpinned by reversion rights(i.e.,where transfers of copyright return to the creator after a set period of time)Ownership:Creators should be appropriately credited for all uses of their work,the integrity of artistic works should be re

279、spected and the ownership of moral rights(i.e.,the right for a creator to be recognised and their work attributed to them)should be unwaivable Reasonable:All contracts should be subject to a general test of“reasonableness”,with a list of defined clauses which are automatically deemed to be void and

280、a general safeguarding provision where any clause contrary to the requirement of good faith(i.e.,which causes a significant imbalance in the stated rights and obligations to the detriment of the author)“shall be regarded as unfair”.19060.Arguing for the feasibility of these principles,Nicola Solomon

281、 emphasised that they represent“points that are in other peoples legislation;they are not new”.191 Indeed,principles such as“clarity”and“reasonableness”,for example,equate almost entirely to the principles of“transparency”and“fairness”respectively,which are set out in the UKs Consumer Rights Act 201

282、5.192 Others,like“fair remuneration”,“exploitation”and“terms”are enshrined elsewhere in Europe,including France,Spain,Belgium,Hungary,Poland,Germany and Sweden.193 Summarising the perceived need for and practicality of the CRAs CREATOR principles,Nicola Solomon asserted:Every single one of these wor

283、ks well in other places and could be put together in a very simple way.These are things that good companies do.There is nothing radical in this.When we look to other organisations the responsible organisations will say,“Yes,of course we expect these things from contract terms,”but because this is a

284、world of dreams there are also plenty of cowboys out there.19461.Many creators experience poor working conditions,including inconsistent use of contracts and terms and conditions,uneven responses to bullying,harassment and discrimination and a lack of proper support,accounting,training and developme

285、nt.This compounds the poor pay available in the profession and its high barriers to entry.190 Creators Rights Alliance,Fair Terms for Creators,accessed 15 January 2024191 Q55192 Q56;see also Competition and Markets Authority,Unfair contract terms guidance:Guidance on the unfair terms provisions in t

286、he Consumer Rights Act 2015,CMA37,31 July 2015193 Q56;see also European Parliament,Directorate-General for Internal Policies of the Union,Contractual arrangements applicable to creators Law and practice of selected Member States,11 February 2014194 Q5629 Creator remuneration The Government should ac

287、knowledge and address issues around contracts and working conditions by implementing the recommendations of the DCMS-sponsored Good Work Review,using the sectors CREATOR campaign as a basis for fair working standards.Creator remuneration 303 Economics of music publishingThe complete reset of music s

288、treaming62.Our report on the Economics of music streaming called for a“complete reset”to address fundamental,structural problems within the recorded music industry and streaming economy.Some of the issues we highlighted included:Pitiful returns for performers,caused by unequal bargaining power with

289、the major record companies,a lack of transparency(undermining their ability to audit)and poor standards of metadata on streaming services,which we suggested could be rectified by a package of measures including statutory rights to contract adjustments,195 rights reversion196 and equitable remunerati

290、on(ER);197 Unequitable splits in revenues between recording(i.e.,performers and record companies)and publishing(music publishers,songwriters,composers and arrangers)rights198 to the music being streamed;The effects of the dominance of the major music companies on independent companies in the sector(

291、those with less than has less than five percent of the world market in recording and publishing);The consequences for rightsholders of music streaming services practices,ranging from biases and pay-for-play(payola)in playlisting and algorithmic curation,to the economic protections afforded to sites

292、that host user-generated content like YouTube,which protect(and incentivise)ad-funded business models that generate less income on average compared to subscription models.19963.This inquiry provided an opportunity to revisit lingering issues across music and streaming,given the prominence of musicia

293、ns remuneration in our Music streaming report.In particular,we focused on songwriters/composers and publishers(the creators and music companies respectively that own and control the rights in the underlying lyrics and musical compositions),which we did not consider in our previous follow-up session

294、195 A right to contract adjustment provides a means by which music creators can renegotiate their contracts if their royalty income becomes disproportionately low compared to revenues derived from the exploitation of their works or the duration of the copyright transfer proves to be excessive.196 A

295、reversion right provides a means by which music creators can terminate their contracts after a certain period of time or reclaim the rights to their music if it is not being exploited.197 Equitable remuneration,or ER,is a performer right,established in international law,that provides a statutory rig

296、ht to payment when their music is exploited in certain circumstances,such as when it is broadcast.The right to equitable remuneration cannot be waived or assigned as part of any contract agreement.There are different forms that equitable remuneration can take,and the treatment differs from country t

297、o country.In the UK,where ER applies and where an artist has signed a deal for less than a 50%share of income,the artists rate would be adjusted to equal 50%,reducing the label share,and could not be used to repay advances or other costs that are levied against their share of revenue.In Spain,where

298、ER extends to streaming(unlike the UK),the right is held against the streaming service and 5.6%of streaming income is shared out between artists.198 When recorded music is consumed in any fashion(sold,broadcast,downloaded,streamed,etc),two bundles of rights are exploited simultaneously:the recording

299、(or“master”)rights,which are the copyright in the sound recordings of the performance and associated“performer rights”that protect the performers economic interests;and the song(or“publishing”),which are the copyright in the underlying lyrics(literary works)and the copyright in the musical compositi

300、ons,including melody,rhythm,harmony and timbre(musical works).199 See:Digital,Culture,Media and Sport Committee,Second Report of Session 202122,Economics of music streaming,HC 50;Digital,Culture,Media and Sport Committee,Fifth Report of Session 202223,Economics of music streaming:follow-up,HC 87431

301、Creator remuneration and report.200 Our Music streaming report also provided a comprehensive overview of the copyright framework,the advent of music streaming,streaming services business models and the music industry revenue share model for reference.201Progress to date64.Several witnesses to our in

302、quiry noted the promising work that has come from the Governments ability to convene stakeholders into working groups in order to solve the practical issues facing creators.This has led to the publication of a voluntary code of practice on transparency and an industry-wide agreement on metadata.202

303、In tandem,these should help rightsholders,including creatorsand particularly songwritersto be paid,correctly,in a timely fashion and with greater accountability.203 The efficacy of these measures will rely on industry take up,204 and we expect the Government to continue to monitor this into the next

304、 parliament.The Government has also published research on Music creators earnings in the digital era,streaming services algorithms(by the Centre for Data Ethics and Innovation),contract adjustments and rights reversion and,most recently,equitable remuneration(published by the IPO).205 Following a le

305、tter from ministers in response to our Music streaming report,the Competition and Markets Authority(CMA)launched a market study on competition in the music and music streaming markets,which reported in November 2022.20665.Recording rightsholders have also taken voluntary measures,most notably with t

306、he three major record companies having disregarded unrecouped balanceswhereby the performers royalties have not offset the up-front costs and advance payment covered by the labelfor legacy artists on pre-2000 deals.Dr Hyojung Sun,Lecturer in the Business of Creative and Cultural Industries and co-au

307、thor of the IPO-commissioned Music creators earnings in the digital era report,which explored how creators earn money through streaming,noted that this measure“would not have been possible without the Committees intervention”.207 However,as VV Brown pointed out,unrecouped balances have not been disr

308、egarded by the majors for songwriters and composers,meaning that music makers on the publishing side have not benefitted as performers have.208Proposals for further action66.Despite these positive developments,however,Dr Hyojung Sun told us that there was“a long way to go before we can say that the

309、music industry has been reset”.209 Professor David Hesmondhalgh,Professor of Media,Music and Culture at the University of Leeds and co-author of the Music creators earnings in the digital era report,added that,because 200 Ibid.201 Digital,Culture,Media and Sport Committee,Second Report of Session 20

310、2122,Economics of music streaming,HC 50,Chapter 2 The dominance of digital music;Chapter 3 Creator remuneration;and Annex 2 Music streaming service models.202 Department for Culture,Media&Sport and Intellectual Property Office,The governments work on music streaming,accessed 21 February 2024203 Qq94

311、 Dr Sun,127 Merck Mercuriadis,149 Paul Clements;see also Q104 Nile Rodgers204 Intimated in Q149205 Department for Culture,Media&Sport and Intellectual Property Office,The governments work on music streaming,accessed 21 February 2024206 Competition and Markets Authority,Music and streaming market stu

312、dy:final report,29 November 2022207 Q94208 Q160;see Paragraph 62 and Fig.1 for the distinction between recording and publishing rightsholders.209 Q94 Creator remuneration 32of“tensions between stakeholders things seem very slow,and they seem to involve matters that are somewhat marginal to the real

313、power issuesthe real issues concerning creator remuneration”.21067.Reflecting on Music creators earnings in the digital era research,Professor Hesmondhalgh acknowledged that the recorded music industry,which was devastated by digital piracy in the early 2000s due to the emergence of illegal download

314、s,has likely recovered to pre-2000 levels,while Dr Sun explained that framing the issues in“pay per unit”(i.e.,per stream)terms was unhelpful.211 Instead,both academics told us that the most contentious area regarded the share of revenues accruing to the recording companies(the“split of the pie”)rel

315、ative to performers,publishers and songwriters,and the“winner takes all”market created by the confluence of digitisation of music consumption,caused by the market power of the size of the majors catalogues.212 This has come at the expense of working artists relative to back catalogue,and of“the long

316、 tail”of new,up-and-coming,independent and less-promoted professional musicians relative to a select few superstars.21368.We heard that there needs to be greater policy focus on distributing revenues fairly,such as by introducing equitable remuneration for performers,using streaming services systems

317、 to push money and consumer attention down the“long tail”and tackling stream-ripping(where pirates use unsanctioned software to record legitimate streams of music for unauthorised playback and distribution).214 With relevance to the work on contract adjustment and rights reversion,Dr Sun added that“

318、in the States they have termination rights,but the US music market is stabilised,and we have found that those legal provisions tend to be a prompt for music creators to go back to their labels or publishers and resit or renegotiate their terms”.215 We note that our original report made comprehensive

319、 recommendations in all these areas that should be revisited by the Government and industry in future.21669.We welcome the Governments ongoing commitment to the reset of music streaming which we have advocated and note the recent metadata and transparency codes agreed by the working groups it led.Th

320、e Government must now maintain this momentum in light of the finalised publications of research into“Music creators earnings in the digital era”,“Equitable Remuneration(ER)in the Streaming Age”and“Contract adjustment and Rights reversion”.The Government must take stock of the results of the extensiv

321、e research it has commissioned and look at how it can drive fundamental reform of music streaming with a package of measures designed to make streaming work for all.70.Alongside publication of the equitable remuneration research,the Government announced the terms of reference and membership of its C

322、reator Remuneration Working Group(CRWG).The CRWG was formed in response to our recommendation that Government needed to build on the momentum created by its transparency and metadata 210 Q95211 Qq978212 Qq94,978213 Qq94,979214 Qq130,162;see also Qq105 Dr Sun,165 VV Brown,Paul Clements215 Q115216 Dig

323、ital,Culture,Media and Sport Committee,Second Report of Session 202122,Economics of music streaming,HC 50,paras 19,5977,126,1523,1867;on equitable remuneration,see further:Digital,Culture,Media and Sport Committee,Fifth Report of Session 202223,Economics of music streaming:follow-up,HC 874,paras 712

324、33 Creator remuneration working groups and focus on the central issues of remuneration,contracts and performer rights.217 The terms of reference state that the CRWG will review the evidence base,explore matters raised by industry representatives and“where possible and appropriate,seek cross-industry

325、 action on creator remuneration from music streaming”.21871.Despite comments from the BPI suggesting otherwise,219 the equitable remuneration research does not set out explicit conclusions against any particular model for equitable remuneration other than the“broadcast model”.220 The“broadcast model

326、”refers to the characteristics of ER that apply to radio,where the performer share is increased to a 50:50 split with the record label(only in instances where their royalty rate is less than 50%)and are paid irrespective of costs levied by the company against the their share.221 However,as the resea

327、rch notes,artists on a rate greater than 50%,such as independent artists,would receive less money,as a portion of their revenue would be paid to non-featured artists such as backing singers and session musicians and administration fees to their collective management organisation PPL.Irrespectively,t

328、his means that a“partial broadcast model”(applying a 50:50 split where music is not selected by the useri.e.,for playlists or algorithmic selections)or a“Spanish model”(where the right to an additional payment is made,either against the streaming service itself or the recording rightsholder)could st

329、ill be considered;indeed,we concluded that these models were more compelling in our original report.22272.However,the Council of Music Makers has raised concerns that Governments selected composition of the CRWG has resulted in only a quarter of the membership representing creators.223 Instead,half

330、of the group members come from record companies and music publishers,including two record label trade bodies(the BPI and Association for Independent Music)and four labels themselves(the three majorsUniversal,Warner and Sonyplus Beggars Group).224 Record producers are not included,despite concerns ov

331、er producer pay being raised in the IPOs Music creators earnings in the digital era report,225 while a further five members either represent both creators and labels/publishers(pan-industry body UK Music and collective management organisations PRS for Music and PPL)or none(YouTube and the Digital En

332、tertainment and Retail Association).73.We welcome the Governments publication of the terms of reference for the Creator Remuneration Working Group and expect to see tangible steps to improve musicians remuneration and performer rights in the next twelve months.However,we note concerns that the group

333、s membership leaves creators themselves with a minority 217 Digital,Culture,Media and Sport Committee,Fifth Report of Session 202223,Economics of music streaming:follow-up,HC 874,para 12218 Department for Culture,Media and Sport&Intellectual Property Office,Creator Remuneration Working Group(CRWG):Terms of Reference,19 February 2024219“ER report divides industry ahead of first meeting of remunerat