May 14, 2010 | Paul Sanders

The Music Industry Needs Fair and Open Markets, Not Regulation

This is the third in a series of articles looking at the challenges the new government faces. Paul Sanders is the co-founder of Playlouder MSP, the iconic British enabler of music and ISP partnerships, Paul takes an active role in industry bodies and Government relations. He is also a member of ORG's Advisory Council.

The music industry has some real challenges, and the last decade has shown that, by itself, it is unlikely to be able to meet them.

This is the ORG website; you are not likely to find here the usual complaints about freeloading filesharers destroying opportunities for artists and blighting the creative industries' digital future. Instead here's a much more pro-business and pro-artist agenda for the five year coalition to consider, and it is one which does not need mass surveillance, consumer 'education' campaigns, and regulation. Nor does it require Ofcom to spend millions of pounds of public money studying how close Sisyphus is to the top of the mountain.

So what should the new Government do to make a real and lasting improvement to opportunities for artists, creative industries, and consumers?

Music licensing is already complicated, and the music industry is progressively making it more difficult. Each track is a bundle of many rights for different uses, owned by different people, and each right is duplicated in each country around the world. The music industry has failed to come forward with either a collective licensing body or an effective wholesale marketplace to give would-be buyers a reasonable and efficient way to get what they need for the services they wish to launch.

So, point number one is to help EU commissioner Neelie Kroes deliver a single market for rights. This is what she said recently: "We must do better. Creating the legal Digital Single Market will lead to a wealth of options for citizens. It will strike a blow against piracy and benefit authors and artists. And it will do this without endangering the open architecture that is essential for the internet. It is obviously common sense to fix problems like this."

Unsurprisingly I can't put it any better myself.

But the five year coalition can go one better. Not only should the digital market be single, it should also be open and fair. Nobody can blame companies for trying to get the best deal they can, but even with the best intentions it is sometimes too easy to overstep the mark. The list of ways music rights owners can line their own pockets at the expense of artists, investors in and developers of music services, and other music stakeholders, is a long and unedifying one. It might temporarily be good for the company concerned, but it is bad for the market and bad for business.

This is what an organisation of independent record labels said when MySpace Music launched: "We remain extremely concerned that with MySpace Music the major record labels are acting not only as competitors, but through their equity stakes in the venture, as the clients/end user as well." 

It is not the Government's job to set the price, or to force companies to buy and sell what they don't want or need, but Government can make sure that market abuse is investigated and dealt with, and that we all meet in the marketplace under the same fair rules. So point number two is to make sure that the digital market is fair and open to all, from new artists and songwriters just starting out, through to the hundreds of small record labels who make our music scene so vibrant, to the established bigger indies and majors and music publishers alike. Fair markets mean more opportunities for everyone.

Lastly the f-word. Unlicensed filesharing is bad for the music industry, and sets up bad incentives all the way through to the consumer. Copyright law already makes clear what is allowed and what is not, and provides mechanisms for both injunctive relief and redress. Access to justice is a fundamental right for copyright owners as it is for all of us; it would be invidious to suggest otherwise.

The International Confederation of Music Publishers had this to say in response to a public consultation on the Europe 2020 strategy: "Individuals engaged in illegal activity online must be made aware that they cannot hide behind the principles of privacy and net neutrality to shield them from the legitimate enforcement of the law." Yet instead of the legitimate enforcement of the law, music industry lobbyists are asking for extra-legal processes and regulation.

The sort of measures that got hustled through in the dying days of the last administration had all the hallmarks of the past; big databases, technological fixes for market problems, layers of regulation, arbitrary target setting, mass spying on ordinary people, and privatised law. If a Digital Single Market that is demonstrably fair and open fails to do what Commissioner Kroes hopes, and legitimate enforcement of the law is shown to be either too onerous or ineffective, then and only then should the Government consider stepping in to limit our rights as citizens and as creators.