'Contractual Gymnastics' and the Value Gap: International Artist Organization Asks European Government to Intervene

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Another day, another letter addressing what artists and their representatives see as a fundamental problem with user-generated media sites.

Less than 24 hours after fifty-eight members of the European Parliament petitioned the European Commission (EC) over safe harbor provisions, user-generated services like YouTube find themselves facing renewed pressure from the music industry.

"We have recommended to artists across the globe that they support the labels in their quest to review value-gap legislation on safe harbors both in Europe and the USA," reads a letter sent today (June 22) to the EC from the Paris-based International Artist Organisation (IAO) -- a non-for-profit trade body representing artist organizations in 10 European countries, including the UK's Featured Artists Coalition (FAC) and the French music artists guild (GAM). IAO says it collectively represents the rights of over 15,000 artists.

Entitled "Artists and the Value Gap," the letter adds to the ever-growing number of protests towards YouTube in opposition to the relatively small revenues it pays artists and rights holders.

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"It is difficult to argue against the Value Gap and the headline figures are stark," states the letter, which is addressed to EC president Jean-Claude Juncker, vice president Andrus Ansip and the commissioner for digital economy and society, Günther Oettinger and is signed by IAO president Paul Pacifico.

"Usage on YouTube is indeed vast and in terms of functionality it is all too close to services which pay up to ten times more," continues Pacifico, adding that despite its "unique promotional opportunities" the high level of music consumption on the platform "is difficult to reconcile against the proportion of revenue that usage delivers back to artists."

"If we are sharing the value we collectively generate then neither platforms nor labels should be able to use contractual gymnastics to remove value from the table and deny the stakeholders further down the value chain their fair and legitimate share from the use of their works," proclaims the letter, which cites NDAs between labels and platforms and European competition law among the obstacles that it faces in negotiating a fairer deal for artists.

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As a result, the IOA says "legislative intervention is absolutely necessary" and outlines four demands to be implemented as part of the European Commission's current copyright review. They include transparency, addressing the value gap, a duty of care throughout the value chain and revised remuneration rights for artists and rights holders.

"Without these we face a digital future in which it is very difficult to see how creators can build sustainable careers," the letter concludes.

In a response provided to Billboard, YouTube writes that they and other digital platforms "are not the enemy. YouTube is working collaboratively with the music industry to bring more money to artists beyond the $3 billion we've already paid out to date. The overwhelming majority of labels and publishers have licensing agreements in place with YouTube, and choose to leave fan uploads up on the platform and earn money from them 95 percent of the time. YouTube's rights management system Content ID goes above and beyond what the law requires to help rights owners manage their content on YouTube, with fan uploads driving 50 percent of their revenue today. Ultimately we believe that by providing more transparency into payouts to artists we can address many of these concerns."

The IOA's letter follows an ever-growing wave of criticism directed towards YouTube and the safe harbor provisions that shields it from copyright infringement liability. Earlier this week, Taylor Swift, Paul McCartney, Carole King were among 180 performers and songwriters who signed a print advert -- co-ordinated by manager Irving Azof and published in three influential Washington D.C. publications -- calling for reform of the Digital Millennium Copyright Act (DMCA), a law which contains safe harbor provisions.

In April, Katy Perry, Christina Aguilera, Lionel Richie, DeadMau5, Garth Brooks and Jon Bon Jovi were among hundreds of signatories of a petition addressed to the U.S. Copyright Office for similar legislative reforms that, they say, are essential "to bring about balance."

The story is the same in Europe, where trade bodies and music companies have been lobbying the EC to tackle safe harbour regulations as part of its ongoing review into copyright.

"Unless we can fix the value gap problem we are doomed to bump along at two or three percent growth, as opposed to having the real returns on the explosion of music consumption. If we don't fix the value gap then whatever we do we will not be able to pull ourselves out of the mire," IFPI chief executive Frances Moore told Billboard earlier this year.

The EC's revised copyright framework proposals are expected in the fall.


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