Despite announcing its best annual financial results in the organization's 78-year history with total license fee income jumping 7% in 2011, speakers at today's (June 13) annual general meeting for PPL, the licensing body representing U.K. labels and performers, lambasted the London Summer Olympic Games and large global digital media owners came for failing to properly compensate music creators.
The vitriol came as PPL's total license-fee income jumped 7% to £153.5 million ($238 million) in the 2011 calendar year. The PRO also saw distributable revenue grow 5% to £130.8 million, broadcasting and online revenues increase 7% to £66.2 million and public performance increase 10% from to £55.0 million. PPL chairman Fran Nevrkla tempered the good news, however, by pointing out that many music users still fail to pay fully for the repertoire of PPL members and other rights owners
Nevrkla acknowledged the music publishing industry's successes in fighting for stronger copyright laws citing recently passed European Union legislation extending the term of copyright protection from 50 to 70 years and the passage of the UK's Live Music Act bill passed in January which loosens performance restrictions for small bars and clubs. He also expressed his satisfaction with the Chinese government's recent announcement to review its national copyright law and introduce equitable remuneration when broadcasters use copyrighted works.
The PPL chairman saved his spleen for this summer's London Olympic Games' organizers for apparently asking members of the country's Musicians' Union to play for nothing. He criticized the "disgraceful practice whereby musicians and singers are getting blackmailed into performing for no remuneration while also having to waive their rights from future use of their recordings. This is true of many sporting events, cultural occasions, various fund-raising activities and so on. I hope you find these practices are deeply shameful," he told the audience of PPL members gathered at London's Kings Place.
Although he did not directly condemn Apple, Amazon, Google, eBay, Facebook and others by name for failing to pay fully for the legal use of music, he illustrated the unfairness of multi-billion dollar Internet businesses that relied on U.K. music but paid only a tiny fraction of their income in taxes owed to Britain.
Because of tax loopholes for offshore companies, "the Big Five Internet firms paid only 0.8% tax on U.K. profits," in 2010, Nevrkla said quoting from This Is Money, an Associated Newspapers' website.
Nevrkla urged the current U.K. coalition government to be more robust about the implementation of the 2010 Digital Economy Act, which originally was instigated by the former Labour government, which is now in opposition. He declared: "Let's remind those in power that success such as Adele's or JK Rowling's is underpinned by a healthy disciplined copyright environment."
His comments were supported by the event's keynote speaker John Alty, CEO/comptroller general of the U.K. Intellectual Property Office (IPO), which advises government ministers about IP and copyright issues.
Alty said the IPO will be working closely with the Office for National Statistics to ensure a more accurate reading of how much is invested in U.K. music. "Recent re-evaluation of investments in the U.K. music industry indicated it was £1.3 billion ($2 billion) in 2009 several times the previous estimated value of £176 million ($273 million)."
And PPL CEO Peter Leathem admitted it has been a challenge persuading certain music users to pay an equitable rate for the use of repertoire after they had become accustomed to using it freely or for very low rates. An example was the music played at nightclubs and bars that use DJs and belong to the Association of Licensed Multiple Retailers (ALMR), he said. Attempts to explain why remuneration is obligatory to the ALMR members have not gone down too well, he disclosed.
"I can understand why the ALMR didn't understand our proposals, "Leathem said. " I recognize we're in a tricky situation where we ask customers to pay for something they already have. But it is a fair price that we seek and nothing more."