If architecture is frozen music then music must be liquid architecture.
- Quincy Jones
• Ruling to increase performer earnings from recordings by up to 30%
• Decision could release millions of Euro back to performers
8th September 2020: In a landmark ruling today, the European Court of Justice paved the way for performers to receive an equal share on income earned from recordings. The ruling will mean that record labels will be forced to pay performers an increased share of revenue collected from the broadcast and public performance of sound recordings.
The decision will be a welcome boost for performers who have seen their earnings through live events severely affected due to Covid-19.
The legal action was taken by R.A.A.P., the Irish collective management organisation representing performers against P.P.I., which represents the three major music labels of Universal Music, Sony Music and Warner Music. R.A.A.P. challenged practices introduced by P.P.I. of diverting performer monies to record labels through a combination of devices effectively reducing a potential 50% share paid to performers, to approximately 20%. The Irish State was joined in the proceedings.
The ruling now makes clear that each time a musical work generates a payment to the record label for broadcasting or public performance, the performers on that recording are entitled to receive an equal share of earnings.
Following the judgement, R.A.A.P. Chairman Paddy Cole said it was a vindication of the actions that they had been forced to take to protect the economic rights of performers and look for a more equitable share of the royalties generated.
“At a time when the income of so many talented and gifted music professionals has been decimated by the Covid pandemic it is some good news that the European Court of Justice recognises the need to protect the economic welfare of performers.”stated Cole.
The matter will now go back to the Irish High Court, for a finding based on the judgment of the European Court, attention will then turn to the Irish government to amend the legislation.
The board felt it was appropriate to give members an update on the legal proceedings between RAAP and PPI.
We took the case initially because PPI decided - unilaterally - to change the basis on which the performers’ share of the licence fees collected by PPI was to be calculated. Not only did PPI seek to substantially reduce the payment by this new method but it clawed-back what it claimed were “over-payments” for previous years, despite the fact that all of those payments were agreed and signed-off on each year as per an agreement in place since 2003.
As soon as RAAP had commenced the legal case, PPI cancelled its agreement with RAAP and stated its intention to engage PPL in the UK to calculate the payments due to every performer on the disputed basis. RAAP was forced to take a second set of proceedings to establish that under Irish law the royalties payable to performers must be the subject of agreement and equally must be paid to RAAP, who can make the distribution according to its own rules. Performers are entitled to choose the collecting society that will represent them and PPI is not free to hand out important aspects of the management of performers’ Irish rights to a UK society dominated by the same three music majors that control PPI.
Until the legal issues are decided, PPI is making payments on the disputed basis. It has embellished its original arguments by developing additional reasons for further reducing payments to performers. The out-turn for the year end 2016 was that, of €11,147,500 collected by PPI, just €2,024,065 was paid to performers representing 18% of the gross. For 2017 the headline figures just provided by PPI show that of €11,446,378 collected, the disputed performer share will be just over €2.1m, again just under 19% of gross. These figures are derisory by comparison with the shares enjoyed by performers in all other EU Member States (except the UK), where a flat 50:50 share is the norm.
The costs of collection imposed by PPI (which performers are forced to share) in the period of the dispute have also escalated and are now at an average of 29.45% of the gross over the last two years. In EU countries the norm is 10-15%. Not alone are these figures an insult to performers but the distributions are calculated by reference to data that is woefully deficient in relation to Irish performances. It is RAAP that holds the most extensive and accurate database of Irish performers and RAAP which should therefore be determining the distributions.
There is a lot at stake in the proceedings. In terms of finance, to give you an idea, between the claw-backs and the deductions under the “new system” imposed by PPI there are sums on average of about €1.5m per annum for the period 2014-2018 in dispute. We are also contesting the right for PPI to keep money back for producers for the practice called “dubbing” (making copies of recordings to create playlists) which PPI arbitrarily decides and keeps for the producers – that runs from approximately €1m to €1.3m per annum. And finally we are contesting the exorbitant figures for expenses.
As important as the finance is, there is more at stake. The producers have acted in a way that is highly aggressive and predatory. Their behaviour proves the need for a performer society in Ireland to protect performers’ interests. If PPI were left to its own devices without RAAP to hold them to account, payments to performers would undoubtedly continue to reduce, would be inaccurate and would be subject to continuing huge costs.
We are depending on the courts to bring order and justice to the situation. It may be that the Irish legislation will be found to be faulty (and for this reason the State is joined in the proceedings). It is also likely that the issues will have to end up before the European Court of Justice.
We are also depending on the forbearance of our members while we attempt to establish the right to a fair share of the money collected by producers and to ensure that the management of performers’ Irish rights is not off-shored to a producer-dominated society in the UK under an arrangement that would make Irish performers unique in Europe, in having no effective representation at national level.
The reason for this letter
Last Friday, 21 October, we received a letter from Phonographic Performance Ireland (“PPI”) outlining a course of action on which they have already embarked which we believe to be unlawful. If not resisted, this will result in the destruction not only of RAAP, the non-profit performers representative organisation, but also of the basic right of Irish performers to control the management of their royalties and to choose the collecting society that they, as performers, wish to have manage their rights.
We have instructed a legal team in respect of the matter and a letter is now being sent to PPI requiring that they immediately step back from their stated position.
The purpose of this communication to you is to explain the circumstances and request that you join with us in using any influence you have with public representatives and colleagues who are members or directors of other collecting societies, including PPI, to campaign for PPI to reverse their stated intention.
In 2000, the Copyright and Related Rights Act gave performers extensive rights in the exploitation of their performances. Among the most commercially valuable of those rights is the right to ‘equitable remuneration’ when recorded performances are broadcast or played in public. The Act gave performers the right to recover this remuneration from the record producers, who already had a system of collection in place. The Act required this to be done on the basis of agreement between performers and producers as to the remuneration to be paid to performers.
An agreement governing the payment of equitable remuneration was reached between RAAP and PPI in 2002. Since then, RAAP has built a substantial body of data, on the basis of which it negotiated annually with PPI within the framework of the agreement, achieving continually improved payments to performers. It has extended its international reach to the point that it now pays out and receives revenue for performers with performers’ representative societies in over 50 countries.
The agreement with PPI operated reasonably well until 2013 when PPI made unilateral decisions in terms of payments they were no longer prepared to make to RAAP. These decisions were disputed by RAAP. The dispute was not resolved in correspondence and as you are aware, RAAP issued proceedings on 28th July last. These proceedings involve some complex issues of Irish and European and even international law but also some very basic issues about PPI’s willingness to transparently account for deductions made by PPI from revenue attributable to RAAP members and foreign affiliates.
Broadly, RAAP’s position in the proceedings can be summed up as follows: where PPI collects revenue for the public performance or broadcasting of sound recordings from licensees, performers should share that revenue equally with record producers; and any deductions made by PPI from the collection before distribution to RAAP need to be explained and justified to RAAP by PPI.
Last Friday, four days after RAAP’s successful application to have the proceedings admitted to the Commercial List of the High Court, PPI wrote to RAAP in terms which effectively deny the need for PPI to come to any agreement at all with RAAP in relation to the sharing of the revenue collected from licensees and which signal steps that will see PPI taking over RAAP’s functions, starving RAAP of funds, rendering it redundant and dictating to RAAP’s members what they each should receive by way of equitable remuneration.
The letter gives notice of termination of the 2002 agreement and indicates that after the notice period, it will leave calculation of what is due to performers in the hands of the UK body, Phonographic Performance Limited (“PPL”), which will presume to tell RAAP according to PPL’s own unstated, unnegotiated rules, which performers are to get what payments. PPI will remit those exact amounts to RAAP to be distributed as instructed. In the words of the communication from PPI’s solicitors: “PPL will calculate and allocate both the producer’s and performer’s distribution…… PPI will….tell RAAP who is to be paid, how much they are to be paid and where the payment is to be made to.”
If this occurs, RAAP will be starved of its raison d’etre and of funds to continue in operation. Performers will be left without a performers’ organisation to protect their interests.
We do not believe that PPI has the legal power to do this. We believe that its actions are not only in blatant breach of the Act, but of the Collective Rights Management Directive, the constitutional rights of RAAP members and European and Irish competition law.
As indicated above, we are writing today to PPI in these terms. If we do not receive confirmation that PPI will immediately step back from its intended actions, we will take additional legal action on your behalf and on behalf of RAAP itself to preserve the right of Irish performers to have their own collecting society, to choose which organisation they wish to manage their rights and to preserve RAAP’s right to exist to be available to protect the interests of performers.
What we ask of you
We ask that you add your voice to this effort and protest, in any way that is available to you, against the attempted destruction of RAAP and of your right to have your interests represented by a performer-focussed Irish organisation that is, and will remain, subject to the provisions that protect the rights of performers laid down in Irish and European law.
As our Board member Mary Black points out, it is to protect performers from predatory behaviour such as this that RAAP’s continued existence is vital.
As you know, we have had a long and mutually satisfactory partnership agreement with PPI since 2002, with regard to the fair and equitable sharing of licence fees collected by PPI on behalf of both producers and performers. Since 2013, however, that situation has changed radically. This has occurred through the unilateral actions of PPI, who have sought to alter the manner in which data has been analysed by agreement between us for many years, and then taken further action to withhold funds from the normal distribution on the basis of retrospective calculations. Over the past three years, the Board of RAAP has endeavoured through every means possible, in dialogue, discussion and dispute, to persuade PPI to desist from this approach and to make full restitution to RAAP of monies withheld. Unfortunately our best efforts have come to nought. We have therefore been forced to issue court proceedings to settle the matter.
Our case is against both PPI and the State.
The main thrust of our case against PPI concerns the apportionment between producers and performers of the licence fees paid by users to PPI for broadcasting, public performance and cable retransmission of performances. We contend that that the ‘Equitable Remuneration’ to which performers are entitled represents 50% of PPI’s income in respect of these uses less certain of PPI’s expenses and charges involved in the collection and distribution of such income. We also contend that these expenses and charges should be totally transparent and made available to RAAP for scrutiny.
PPI has held back in excess of €3 million for the period since 2013, and has indicated that it will continue to make further deductions into the future. It maintains that it is entitled to exclude from the distribution royalties paid for performances of foreign (mainly US) performers, allocating these sums instead to the very small number of US music producers it represents. We contend that, in addition to these deductions being in breach of the contract between us, PPI has wrongfully allocated sums as their costs and expenses of collection and deducted them from the licence fees paid by users before sharing the income with RAAP. These are the main points of our case against PPI. PPI insists that the changes in practice which they are attempting to force upon RAAP are justified by the wording of parts of current copyright law.
In so far as the State is concerned, we have represented to the Department of Jobs, Employment and Innovation (which has departmental responsibility for the legal rights deriving from copyright) that to the extent that the legislation could be called upon successfully by PPI, it is not in accordance with Ireland’s European and international obligations. In our proceedings we are therefore seeking a declaration that both European directives and international conventions require the right to remuneration of sound recordings to be equally accorded to performers and producers.
We believe that PPI has breached our longstanding agreement, to the detriment of performers. We also contend that performers’ rights under Irish law must be clarified and made compliant with Ireland’s European and international obligations. We regret that the only method of vindicating the rights of performers involves resort to the courts. However the attitude and actions of PPI have left RAAP with no other option.
We will keep you updated as necessary over the next number of months.
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And yet, notwithstanding the exponential growth and success of the online legitimate content marketplace, the revenue that most performers in the EU derive from on-demand exploitation is still negligible.
For many years we have been told to be patient, as the digital market was still growing, and that performers would be decently paid one day for these new uses.
However, 20 years into the digital revolution, and despite EU legislation aimed at protecting performers in this regard, performers are still not fairly remunerated for the making available on demand of their performances.
Most of us in Europe working in the sound recording and audio-visual industry must transfer all our rights to producers in perpetuity, including for on demand exploitation, in return for a one-off, upfront payment. Therefore, even where our recordings are successful, we seldom earn any additional revenue from it.
That is why performer organisations from across Europe, including AEPO ARTIS (the Association of European Performers Organisation), EuroFIA (the European group of the International Federation of Actors), FIM (the International Federation of Musicians) and IAO (the International Artists Organisation) are campaigning together for the introduction of new legal provisions in Europe granting all performers a fair share of the income that is generated when their work is made available on demand on the Internet.
We need new rules to guarantee that all performers get a fair payment wherever their work is seen or heard on-demand in the online environment. A new, unwaivable remuneration right for legal on demand uses should be granted to performers. This right would be collected from digital platforms that make the performances available on demand and subject to collective management.
The European Commission is expected to come forward with first legislative proposals in autumn this year. The coming weeks are therefore crucial in pushing the Commission to incorporate our concerns and claim in its legislative agenda.
Together we can make a difference..
We therefore invite all performers to unite and support the FAIR INTERNET campaign.
Please go to https://www.fair-internet.eu/ now and sign the petition.
Nick Mason of British band Pink Floyd said: "No more time must be wasted. The European Commission is currently preparing to modernise the EU copyright rules and any such effort cannot deny young people coming into our industry the chance to get properly paid for their work".
Speaking on the eve of the release of the European Commission's Digital Single Market Strategy, AEPO-ARTIS, EuroFIA, FIM and IAO call on the European Commission, the Parliament and the Council to take action as a matter of priority to ensure that performers get a fair share of online revenues through a new, unwaivable remuneration right for legal on demand uses of their work. This right would be collected from digital platforms that make the performances available on demand and subject to mandatory collective management.
Europe would not enjoy the vibrant cultural scene it does today and its creative content sector would simply not exist without performers. However, current legislation makes it easy for businesses to deny performers fair remuneration for the legal exploitation of their work online. All exclusive rights granted to performers under EU legislation are generally transferred to producers under contractual agreements.
Only a few 'featured performers' manage to negotiate the payment of mostly very low royalties for the exploitation of their performances.
Spanish actor Javier Bardem said: "An unbalanced industry, whose workers are not adequately protected, will fail sooner or later. What we ask is to be able to participate in the economic results of the works […]. We, the actors, are the most interested in the audiovisual works reaching the broadest possible diffusion and economic results".
Fran Healy of UK band Travis stated: "The opportunity to make streaming payments equitable for the artists who record and perform the songs we all love is one giant step towards a savvier, more sustainable music industry".
Nacho Garcia Vega of Spanish band Nacha Pop stated: "Performers all over the world start to be tired of this unfair situation. It cannot last much longer".
Swedish guitarist Janne Schaffer (55 ABBA tracks, 5,000 recording sessions) stated: "EU level action is urgently needed to guarantee that all performers receive a fair remuneration when their work is exploited online".
To register your support for this campaign, please go to https://www.fair-internet.eu/