Help Tackle the Value Gap in the Music Industry

Dear Colleague,

I write to you regarding an opportunity coming up this week in the European Parliament to tackle the serious issue of the “value gap” that exists in the UK and EU music industries.

The value gap is the mismatch between the value obtained by digital service providers, such as YouTube, from the use of music on their platforms and the revenue returned to the artists, composers and businesses that created the music.

In our 2017 General Election manifesto the UK Labour Party recognised “the serious concern about the ‘value gap’ between producers of creative content and the digital services that profit from its use”, and committed to working “with all sides to review the way that innovators and artists are rewarded for their work in the digital age.”

The music industry is worth £4.1 billion to the UK economy and supports 120,000 jobs. It is a very important sector that makes a huge financial as well as cultural contribution to our country. The value gap threatens the health of the industry and in particular the livelihood of creators who are seeing diminishing returns on their creative output.

User-upload streaming services such as YouTube pay only a fraction of the royalties of other music services despite being the most popular source of music consumption by far. This significantly reduces the amount of money composers and performers receive for their creative endeavours from user-upload streaming platforms when compared with other services such as Spotify and Apple Music.

This week various committees will vote on their opinion on the proposed Directive Copyright in the Digital Single Market which addresses this issue. The IMCO Committee already adopted its opinion on the proposed Directive Copyright in the Digital Single Market, the CULT and ITRE Committee will vote on its opinion on Tuesday 11 July. Amendments are also expected to be put on the table in the other Committees (LIBRE) next week. The JURI Committee is discussing amendments to its report on Wednesday 12 July and has a vote currently scheduled for Tuesday 10 October.

I urge you to support amendments that improve the UK and European music industry’s ability to tackle the “value gap”. Article 13 of the proposed Directive has been designed for these purposes.

This important issue within the music industry is also part of a wider policy concern that big tech companies and social media platforms are not behaving in a responsible way towards creators and rights holders, and are abusing their market dominance. We have seen just weeks ago in Google’s refusal to accept any responsibility following their unprecedented anti-trust fine that they are not recognising their broader responsibilities to the industry and refuse to recognise their monopolistic tendencies. It is up to all of us, as Parliamentarians, to try and make them realise their responsibilities and act on them.

This is a unique opportunity to get the law right. It will ensure the music industry can continue to flourish, breaking new acts and bringing joy to millions of fans. It will also ensure the digital market can develop in a legitimate way.

I hope you agree and will support the amendments this week and going forward.

Yours,

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Tom Watson MP
Labour’s Shadow Secretary of State for Digital, Culture, Media, and Sport

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