Early risers (i.e. 10am) at Midem today were treated to an appearance by Michel Barnier, European Commissioner for internal market and services, in a session entitled ‘Music for Everyone’, with a keynote from Barnier followed by a panel session.
Barnier kicked off by citing the music industry’s importance to Europe – a 6bn-Euro market that has spawned digital startups including Spotify, Deezer, Last.fm and 7digital.
But he also talked about the challenges facing the industry. “Europeans are often frustrated at not being able to access online the diversity of content offered in other member states, even though they are prepared to pay for it,” he said.
“The availability of some of the most popular online music providers is still very uneven between member states. How can it be, for example, that some of them are not available in Italy or Poland? And that only three out of the 20 most popular operators may be accessible from certain member states?”
Barnier was keen to stress that there are challenges on all sides of the digital music ecosystem: labels and publishers invest in artists only to see their work immediately made available on pirate sites, while startups trying to launch pan-European services are stymied by “the compartmentalism of national markets”.
“Whether consumers, investors or entrepreneurs, it is incomprehensible that Europeans are finding on the Internet obstacles that we have been trying to break down in the physical world for more than 50 years,” said Barnier.
“While it should not be a convenient scapegoat, copyright must no longer form part of these obstacles. It is not a stumbling block, it should be a modern effective tool for supporting innovation.”
Barnier went on to talk about the European Commission’s Licences for Europe initiative, aiming to get rightsholders and digital services together to solve challenges including pan-European access to online music services, and legal questions around user-generated content.
He also talked collecting societies, noting the importance of their work across Europe, but also the complexity of a market with 30 different societies, all operating under different rules.
Barnier hoped that the EC’s directive on collective rights management will remove the barriers for digital music services looking to operate across Europe.
“It will mean a step forward not only for the 250-plus online music service providers in Europe, but also for all those whose services incorporate music, like TV channels and video-on-demand services,” he said. “All of these players need multi-territorial licences.”
Barnier said the EC isn’t ignoring the question of piracy: “Copyright is an essential driver in the creative process, but a right which cannot be respected is of little use,” he said, before moving on to a pet hate of music rightsholders: piracy sites funded by advertising.
“Is it acceptable to tolerate advertising revenues being gobbled up by a service provider who foster the free sharing of illegal music files?” he said.
“Based on the results of a consultation we have launched, we will decide whether improvements to the European legal framework need to be proposed… We must find solutions that protect and improve the domestic market, stressing the fight against infringements on a commercial scale, in accordance with the principle of ‘follow the money’.”
Barnier also said that he’s keen to drive the “re-legitimisation” of copyright through dialogue with the music industry and digital services, as well as through new legislation if necessary.
“We cannot give free rein to the illusion that everything is free, and we cannot give the impression that in an age where file duplication is infinite and instant, that unlimited sharing of protected content is a natural right, particularly when profit is the objective [of the pirate sites].”
Songwriter and journalist Helienne Lindvall responded to the speech, saying that “it’s good to hear a voice from Brussels that understands and supports authors and songwriters, because sometimes we fell a bit left out in the cold.”
She went on to say there are certainly unresolved issues on the availability of music. “Some collecting societies are a lot better than other collecting societies. I would welcome more transparency and accountability,” she said.
“I would be happy if there were fewer collecting societies that would be more efficient and transparent, or at least be accountable to Brussels or to somebody.”
She also talked about the “incredible success” of Spotify in her native Sweden, where it has helped the industry bounce back from its sales lows in recent years.
But she also pointed out the need to “make those services thrive by doing something about illegal services – you cannot have a healthy market if you have a part of that market which is unhealthy and free… It doesn’t matter how many great licensed services we have if we don’t do anything about the other side.”
Lindvall also talked about the personal difficulties she’s encountered trying to get songs she’s written taken down from unlicensed services like Grooveshark, and the brick wall she’s come up against when every takedown seemingly generates more uploads of those tracks.
“I was once told by a politician that I could tke them to court. With what? Certainly not with the revenues that I make from YouTube,” she said, raising a knowing laugh from the audience.
Andrew Jenkins from Universal Music Publishing gave a major’s perspective, saying the infrastructure in Europe has to be gotten right.
“We had 200 years of national licensing essentially, and then in the last seven years we’ve had multi-territory licensing in Europe,” he said. “We’ve had to make a lot of changes.”
Jenkins suggested that initiatives like the Global Repertoire Database (GRD) is trying to tackle these issues.
“The best thing we can do for cultural diversity is to make sure that everybody who does write works gets paid for writing works,” he said. “We have to as an industry solve those infrastructural problems.”
Jenkins also addressed the costs of creating the GRD, saying it will provide good value for money (unsurprisingly, of course – he’s involved in the project).
“Spending 50m Euros creating a database seems like a lot of money. Actually, in the scheme of [industry revenues of] 3.6bn Euros a year, it’s tiny.”
Music manager Paul McGuinness weighed in next, welcoming the thrust of Barnier’s speech, and the work of the EC.
“The truth about collection societies that no one really mentions is that not only do their tariffs vary enormously around the world, but also their standards of integrity vary enormously,” he said.
“When we talk about the availability of licences not being sufficient, very often we’re using that as a euphemism. Very often the people seeking licences suffer from let’s call it an ‘integrity deficit’. That’s the reason they don’t get licences, and they should not.”
He also talked about the rise of legal services like Spotify and Deezer “where there’s no question of integrity… where there is a question, and I include YouTube, these are the main distributors and are going to become more important in the years to come.”
But he echoed the criticism of other managers and artists about the money coming from these services. “Up until now, even for very big artists the sums of money passing through those services are quite trivial… they’re very small indeed,” he said.
“You could say that these services are mainly a promotional medium. I hope they grow and prosper, because they are legitimate, but we’ll have to wait and see about that.”
And then McGuinness returned to a previous bugbear: Google.
“I don’t want to engage in Google-bashing, but there is a sense of unease across Europe, across the world about Google,” he said. “Google have been making encouraging noises about restricting illegal sites or directions to illegal sites for acquiring music. The noises are very encouraging, but I’d like to see some action. It’s as simple as that.”
McGuinness wasn’t just Google-bashing, though, as he said. “Google have brought so much to civilisation in terms of spreading knowledge and informing the world. I know they’re ingenious, we all know they’re ingenious,” he said.
“But they are making money from directing people to piracy sites… I wish they would apply themselves and their extraordinary ingenuity to the micro-transactions that occur every time somebody listens to a piece of music over the internet. They can do it… There is a sense of unease, and a feeling they’re not really doing what they could be doing in this space. And I would like them to hurry up a level.”
Barnier was asked about Google. Cue a long pause.
“We’ve said how important Google is and other operators – usually American – they’re very important players, they have a positive role to play in dissemination, in education,” he said.
“And in general terms, what I believe is that in the Internet ecosystem we need to change how values are distributed. What’s going on today is not fair for creators, for authors, for writers. They’re not being paid, and when they are being paid, it’s not properly for the work which they have done. They’re not protected.”
Barnier also talked about the balance for sharing reveneus from the digital ecosystem as “a new subject on the table in Brussels”, appealing for input from all quarters. Yes, in other words, he nimbly dodged the Google question. But then worked his way back to it.
“If we don’t stick together [as Europeans] we will be lost. We will be subcontractors, under the influence of the Chinese and American economies.”
Axel Dauchez, CEO of streaming service Deezer was next to speak, professing himself as a big fan of the new EC initiatives, and of copyright itself. “It’s not only protecting the content, it’s protecting the platforms. We are not protected enough.”
However, Dauchez said he was very optimistic about the evolution of digital music services, but “very pessimistic about the diversity of it – the number of European platforms is decreasing month after month in every country… The consolidation has already started, and the risk is there.”
He highlighted some key copyright issues that Deezer is facing. First, complexity. “We are now live in 180 countries, and we have to deal with this mess of the publishing world, and it is very, very complex,” he said.
“We are dealing with publishers and collecting societies worldwide, and they cannot even tell us what we are buying!.. The fees are not clear.”
Dauchez focused on the problems facing European digital music services, as they try to compete against some of the big global players, particularly Google and Apple.
“I think there is one cancer: it’s been said about Google a little bit before,” he said. “What I think the key word is is discrimination… Am I a competitor to YouTube? Should I have the same deals as YouTube? Of course. When I am discussing with collecting societies and publishers can I say ‘just give me the deals that YouTube has’? Of course not.”
Dauchez said the same applies to iTunes, including the fact that Apple makes its money from hardware sales rather than just from digital music – yet a company like Deezer can’t ask for the same deals Apple gets when signing licensing agreements.
“This will kill the innovation, this will kill the local players. We are already under huge discrimination because of VAT, and because of the size of our market compared to the US… We need to be protected against discrimination on copyright.”
That, in 1,900 words, is the gist of the discussion.