Remuneration breakdown

During lockdown, performances and arts have become more important than ever. Fortunately, we are able to enjoy these from the comfort of our own home via streaming. However, the creators of this content, performers and artists, are not getting their fair share of the income generated by streaming platforms. Jonathan Benton and Ana Gallego report on a recent webinar that looked at how to address this issue.
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By Jon Benton and Ana Gallego

Jon Benton, Content Editor, and Ana Gallego, Junior Reporter, at The Parliament Magazine.

09 Dec 2020

The Coronavirus pandemic has locked everyone inside this year, taking its toll on us all. Fortunately, to help us get through this, we can take advantage of streaming platforms offering countless TV shows, movies and music - all at the click of a button. Platforms such as Netflix and Spotify have seen their subscriber bases shoot through the roof – with Disney Plus registering a massive 75 million global subscribers since launching just a year ago.

These millions of subscribers have translated into massive profits for platforms, however those who create this content are not benefitting, thanks to an outdated system based on contracts that compels them to sell their exclusive rights for a modest lump sum that does not take into account the ways new digital markets and platforms exploit their work. Deprived of their fair share of the profits, and with COVID-19 restrictions prohibiting live performances - another source of income – artists and performers are struggling to make ends meet.

A recent webinar organised by the Association of European Performers’ Organisations (AEPO-ARTIS) looked at this very issue and asked: how can we create a sustainable creative eco-system in Europe to ensure performers can reap the benefits of the booming digital market?

“[Article 18] obliges Member States to ensure that performers and authors receive appropriate and proportionate remuneration for all exploitations of their performances – including streaming” Tilo Gerlach, AEPO-ARTIS President

The answer, according to the panel, lies in the implementation of the 2019 Copyright Directive, in particular its Article 18 which, explained AEPO-ARTIS President and host Tilo Gerlach “obliges Member States to ensure that performers and authors receive appropriate and proportionate remuneration for all exploitations of their performances – including streaming”. Or in other words, Member States should put in place mechanisms that effectively result in money flowing to the performers from digital revenues.

“This is not just a law, but rather a statement of an idea and an ideal,” explained German Greens MEP Niklas Nienaβ, who helped open the debate. The founder of the Cultural Creators Friendship Group in the European Parliament believes Article 18 can open the door to a European level social safety net that “ensures artists and performers can get work insurance, retirement plans, healthcare benefits and even parental leave payments.” He also argued that a minimum wage in the artistic and performance fields should be established, “because that’s just fair”.

Similarly, European Commission Head of the Copyright Unit, Marco Giorello, described Article 18 as “ground-breaking” for European artists and performers and authors. “For the first time in European legislation we have a comprehensive set of provisions addressed to improving the remuneration of authors and performers,” he added. Yet the method for this appropriate and proportionate remuneration has been left deliberately vague.

The Article, which had been added to the Copyright Directive by the European Parliament, was weakened during Trilogue talks with Member States in Council because, explained Giorello, “The situation of musicians and performers in the audio-visual sector may not be exactly the same as writers and authors in the publishing sector.

So, national governments needed some flexibility to allow them to take into account the specificities of the sector in the implementation.” This flexibility that Giorello referred to can be manifested in many different ways. Professor Raquel Xalabarder, from Universitat Oberta de Catalunya, in Spain, explained, “We know Article 18 obliges Member States to secure appropriate and proportionate remuneration, but at the same time it obliges them to use different mechanisms to secure them.” She encouraged Member States to not simply “copy-paste provisions, they should do something else and make use of these different mechanisms.”

Perhaps the most useful mechanism at their disposal, said Xalabarder, would be the establishment of residual remuneration right “because this remuneration survives the transfer of the exclusive exploitation right from the artist to the producer”. In this situation, she explained, “once this transfer is done, and once the producer is done licensing the work for which the rights have been transferred for the performance, then the licensee is going to be paying via a collective management organisation (CMO) that remuneration directly to the author or performer.” A mechanism that is already existing in EU law as was confirmed by Marco Giorello.

“We’re not compensating for any damage, we’re just securing that authors and performers will benefit from the exploitation of their works” Professor Raquel Xalabarder, Universitat Oberta de Catalunya

In Spain such a remuneration right is already in operation also for digital uses. According to José María Montes, Director of Legal and International Affairs at Spanish CMO, AISGE, the Spanish model has “not only secured compliance with Article 18 of the Copyright Directive, it also has had no impact on the market or on the subscription fees paid by consumers. On the contrary, I need to stress that this system provides a fair and a very much needed balance between all interests.” He also revealed that Spanish provisions allow them to collect on behalf of French, German, British and Italian performers, and others around the world, with profits distributed through their national CMOs.

Bruno Boutleux, Managing Director of French CMO ADAMI, on the other hand, warned attendees that it was essential to monitor Member States implementation, saying, “The Devil is sometimes in the detail”. He revealed that in the French government’s proposal “there is a list of exceptions to this principle, which is so long that in the end nothing changes. The law will change but in practice nothing will change.”

However, Niklas Nienaβ told attendees that they can count on MEPs to keep an eye on implementation and take further steps if necessary. “It should be ensured though that if Article 18 is not followed, as it’s against the law, then we will sue under the European Court of Justice. That’s the standard procedure.”

Among the closing remarks, Professor Xalabarder reminded attendees of what the key issue was all about: “It’s a remuneration, not a compensation. We’re not compensating for any damage, we’re just securing that authors and performers will benefit from the exploitation of their works.”

Member States have until June 2021 to bring into force national laws implementing the directive.

You can watch the whole event here:

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