Remunerating Authors and Performers –
Are Statutory Fair
Compensation Provisions Sufficient?
Associate professor Irina Eidsvold-Tøien and Prof. Ole – Andreas Rognstad
Outline
The facts:
Remuneration in the digital area for creative actors
The background:
Legal and technological reasons for the situation
Suggestions for sollutions
Changes in the law. Examples in
Norwegian Law
«WHAT NOW – tHE IMPACT OF DIGITIZATION ON THE nORWEGIAN MUSIC INDUSTRY», Ministry of culture 2019
Author
Figur 1. A classic value chain
Performance Production Distribution End Market
Streaming services have a huge market share
– and it is growing
Source: IFPI
How do you usually listen to music?
Four out of five people use streaming services
Source: YouGov 2017
What streaming platforms do you use?
5
Sales according to form of reception
Sources: Menon's accounts database, Statistics Norway, Association of Norwegian Theatres and Orchestras
Rightholders Recorded music
6
Sales according to form of reception
Sources: Menon's accounts database, Statistics Norway, Association of Norwegian Theatres and Orchestras
Rightholders
29%
Recorded music
7
Sales according to form of reception
Sources: Menon's accounts database, Statistics Norway, Association of Norwegian Theatres and Orchestras
Rightholders Recorded music
8
Sales trends
Source: Menon's accounts database, Statistics Norway, Association of Norwegian Theatres and Orchestras
Performers and authors receive a small share of sales
Streaming services reduce author and performers shares at their expense
Concerts appear to have become slightly more important, but this is only because the other cash flow is reduced. The
concert income then become a greater part of the total income
2011
2017
The gender difference in income groups for music-related activities in 2007 and 2017
Source: Survey
10
25.11.2021
Summary of findings
Streaming services pay less to artists and authors - both through SoMe channels and when selling individual songs on Spotify / Tidal or the like- than similar income
stream in the physical stage
Why did it happen, and how do we evaluate what is fair?
Legal and technological background for the loss of income for authors and performers
Associate Professor Irina Eidsvold-Tøien, BI Norwegian Business School
Technological changes
Digital technology and access to larger bandwidth
Internet/digital technology used differently than today; more a transport conduit then than a market
Then Yahoo and Amazon. No Facebook, Twitter, YouTube and Spotify
Streaming services like Spotify, Tidal and Apple-music:
Market centric business model supports “winner takes it all”
artists and fans pay for music they do not listen to
non-featured performers are excluded from the payments also, in conflict with business models for records when you paid for the music you listened to
User centric business model unlikely to accomplish the goal of increasing featured artist payments, much less non-featured performer payments that still amount to nothing in this model
in addition, high transaction costs
15
Associate Professor Irina Eidsvold-Tøien, BI Norwegian Business School
Average percentage for royalty payments from record companies to artists
10
Why is a weak market position for creatives a problem?
The ecosystem of copyright depends on payment for services in order for more to be produced, NCA § 1 Applies to authors, performers, and producers to a certain degree
Content should be valued fairly
Services that do not recognise the value of the content attract users at the expense of licensed providers
this drains the system and prevents creative development
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Associate Professor Irina Eidsvold-Tøien, BI Norwegian Business School
Possible solutions:
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Associate Professor Irina Eidsvold-Tøien, BI Norwegian Business School
How can the market be more balanced and secure the creatives a fair share?
“a key principle of copyright is that
creators and performers should be able to share in the income generated through the economic exploitation of their works and performances”
- European Copyright Society
“Performers rightly have the feeling that they are doing all the work of creating the music,
recording the music, promoting the recordings and driving fans to the platforms — yet everyone seems to be getting rich except the performers”
-Wipos standing committee, july 2021
What is “fair”?
The definition of fair depends on one's position
Market structure and statutory regulation
Statutory regulation of the rights of authors and performers has a relatively strong foundation in EU directives
20
Associate Professor Irina Eidsvold-Tøien, BI Norwegian Business School
How can the market be more balanced and secure the creatives a fair share?
EU- report on remuneration of authors and performers:
There are two ways of strengthening author and performers position in the market:
more income (new arenas qualify for payment)
changing the split of the income between producers and performers /authors in favor of the creatives
- EU 2015/0093- report on fair remuneration, s. 61
Increase the volume by deciding that more use is relevant for payment - DSM art. 17- previous unsure if the platforms were liable for presenting the content
Change the split between the recipients of remuneration for use (contractually)
Fair remuneration, art. 18- appropriate and proportionate part of income
DSM states legal premises for the contract- DSM art. 19, 20; “fair remuneration”, transparency and an adjustment clause, statues to control and compensate if the sales become bigger than expected Increase the payment for “communication to the public”, DSM art. 18.
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Need for further steps to assure «fair remuneration»
“equitable remuneration are best fulfilled by a streaming remuneration in the nature of a communication to the
public royalty that is outside of any recording agreement , is not waivable by the performer and it is collected and
distributed by performers’ CMOs ”
Wipos standing committee, 2021
“unwaivable right of remuneration that authors or performers cannot transfer (except upon death or for administrative
purposes to a CMO) and that could be managed and collected by CMOs ”
- European Copyright Society 2020
Concrete example from Norwegian law - compulsory collective licensing by CMOs
“unwaivable right of remuneration”
“cannot transfer (except upon death or for administrative purposes to a CMO)”
“managed and collected by CMOs”
Necessary with a settlement body for “fair –remuneration”!
Gramo- remuneration rights in NCA § 21 (recordings)
Tono- composers rights
Norwaco- audio visual rights
