BPI – Written Evidence (JTN0030)

Introduction

  1. The BPI is the representative voice for the UK’s recorded music industry, including the three major record labels (Sony Music, Warner Music and Universal) and over 400 small, independent labels. Our members account for more than 85% of all recorded music consumed in the UK. We organise the BRIT Awards and the Mercury Music Prize, own the Official Chart and through our charity, the BRIT Trust, support a range of music related charities and organisations, with the biggest benefactor being the BRIT School, a state school in Croydon focusing on music and the performing arts.

 

  1. The BPI is part of the extraordinarily successful British music industry – worth £5.2 million to the UK economy as well as giving the UK’s enviable ‘soft power’ around the world.  Record labels have experienced five years of successive growth, and 7.3% growth in 2019 alone, generating trade revenues of over £1bn, plus overseas export earnings of around £500 million.  The UK is well positioned to grow its global music revenues considerably, not least as digital streaming increases and key markets grow; the success of UK artists makes the UK ideally placed to share in this anticipated global growth, with the potential to double export income to £1bn by 2030.

 

  1. A strong IP framework is the bedrock of current and future success of the music industry.  This ensures that everyone in the music community benefits – it prevents illegal or unauthorised sharing of music; and ensures that value flows to all parts of the music value chain.  The UK enjoys a gold standard IP regime, and as we seek to forge new global partnerships, this should form the benchmark in future trade agreements.

The UK and Japanese music market

  1. Japan is a significant music market - the second largest market in the world and by some margin the biggest Asian market in revenue terms – and is therefore important in absolute earnings.  However, as 2019 data shows, Japan is only the fifth most important market for UK income, generating some £20.8 million – less than 5 per cent of the total. Market growth in Japan is relatively slow (due to relatively late adoption of music streaming) but have significant potential for growth.  It should therefore be seen as a market with significant potential if the right conditions are provided for.

 

  1. Many UK artists achieve big breakthroughs in Japan. Ed Sheeran enjoys a high profile and the Arctic Monkeys’ Tranquility Base Hotel + Casino achieved a top 10 placing,  Sam Smith has a dedicated following and the choir Libera has attracted a substantial fanbase. Catalogue listening from heritage acts such as Elton John, David Bowie, and Queen are also popular. 

Trade agreement priorities

  1. The BPI wishes to highlight two priority areas for any future trade agreement with Japan, both of which exist in UK law and are important for the creative sector.

 

Public performance and broadcast rights

 

  1. Both the United Kingdom and Japan have ratified the relevant international copyright treaties providing minimum standards of protection and national treatment for each citizen. However, Japan has declared a reservation to the WIPO Performances and Phonograms Treaty which restricts the protection for sound recordings. 

 

  1. In practice, this means that – unlike in the UK – performers and record labels are not paid royalties when music is broadcast or played in public places (such as shops, bars, restaurants, nightclubs etc).  Such public performance and broadcast income account for some 14% of global music income – higher in many countries, including the UK at around 17%.  There is therefore considerable scope for the UK – as well as the Japanese music sector – to benefit from the introduction of public performance and broadcast rights. We note that this was not agreed to in the EU-Japan partnership, but that a commitment was made to continue to keep the issues under review: “The Parties agree to continue discussion on adequate protection for the use of phonograms for all communication to the public, giving due consideration to the importance of international standards regarding protection for the use of phonograms.” 

 

  1. A UK-Japan trade agreement would provide an ideal opportunity to introduce this right and UK negotiators should be urged to prioritise this in trade discussions.   The failure to pay royalties on broadcast and public performance represents an unfair subsidy to domestic broadcasters, nightclubs and commercial premises and unfairly deprives UK artists and songwriters of payment for their work.

 

Website blocking

 

  1.                     Japan has taken considerable steps in recent years to tackle illegal and copy-right infringing activity, and this is welcomed by the music industry.  However, we understand that website blocking is considered only a last resort, with limited commitment from the Japanese government to introduce website blocking powers. 

 

  1.                     In the UK, policy makers and industry have gone to considerable lengths to introduce measures to combat copyright infringing activity.  Amongst this, website blocking enables orders to be issued by ISPs to prevent customers accessing copyright infringing services in an efficient and cost-effective manner.   The number of overseas websites containing infringing music content makes website blocking a particularly effective way of tackling this activity. As well as upholding the overall strength of the UK’s approach to infringing content, we recommend that website blocking is specifically encouraged to be included in any future FTA. 

 

  1.                     The BPI trusts these headline recommendations are useful to the House of Lords Sub-Committee’s deliberations, and would be willing to provide further information or answer any questions you have

4 September 2020