Britain to Reject Copyright Extension

A report commissioned by the British treasury is recommending not to extend the term of copyrights on recorded music from 50 year to 95 years, an extension pushed by Cliff Richard–excuse me, Sir Cliff Richard–the “British Elvis.” The proposed extension would apply only to recording artists; the British copyright for composers is currently 70 years after the composer’s death. Peter Jamieson, chairman of the British Phonographic Industry, bemoaned the report’s recommendation: “There can be no rationale for discriminating against performing artists . . .” Failure to extend copyright would mean that recordings of, say The Beatles, would begin to lose copyright protection in 2012, the 50th anniversary of their release of Love Me Do.

The difference in treatment between copyrights for recording artists and composers is noteworthy, yet it is hard to be find any policy other than selfishness in quotes such as this, from music journalist Neil McCormack: “You can make a record in 1955 and have been getting royalties . . . Suddenly they’re gone.” Well, yes. Copyrights–in Britain as in the U.S.–have never been perpetual. Their goal is to protect and foster creativity by granting the creator a limited monopoly, not an irrevocable annuity. One who recorded a song (or composed a score, wrote a book, painted a picture, or otherwise followed her muse) in 1955 or 1965 or 1975 was, obviously, sufficiently motivated and protected by the then-existing term of copyright to create. Extending the term of their protection now does not foster new creativity in the artists protected. It extends the monopoly to the few without obvious benefit to the many and further erodes the longstanding distinction between intellectual property (limited in scope and duration) and real or personal property.

Musical copyright terms ‘to stay’, BBC News, 27-Nov-06

Microsoft-Universal Royalty Agreement

Microsoft yesterday announced a licensing deal with Universal Music Group under which Microsoft will pay Universal royalties of about $1.00 per unit from sales of its new Zune portable music player, in addition to royalties on downloads from Zune’s online store. Universal said that it would, in turn, pay about half of the royalties it receives to its artists.

This licensing deal represents a shift in industry practices. Apple, for example, pays music companies a royalty on sales from its iTunes online music store but pays nothing on sales of iPods. The recording companies have been trying to get a piece of hardware sales because royalties from online music purchases are only a small piece of the Apple pie. Each iPod contains, on average, about 20 songs purchased from iTunes. At about 4 megabytes/song, that works out to about 80 megabytes — about 1/12th the capacity of the $79 one gigabyte iPod Shuffle or 1/1000th the capacity of the $349 top-end 80 gigabyte model. Apple sold 14 million iPods in the last quarter of 2005 alone, and over 42 million total since introducing the iPod.(1) That’s a lot of non-revenue-generating capacity for record companies to ignore. $1.00 per unit may not seem like a lot compared to the royalty potential in even 11/12ths of the capacity of the iPod Shuffle but it is $1.00 more than the record companies get now.

The Microsoft-Universal deal sets a benchmark for other music industry deals with Microsoft. If the Zune is successful these deals will put pressure on Apple to consider similar deals. Apple has had considerable leverage in its negotiations over music rights because of its 42 million + units sold, but every Zune purchase that results in an unsold iPod shifts the balance of power.

Jeff Leeds, Microsoft Strikes Deal for Music, The New York Times, 09-Nov-06; (1) Mike Musgrove, Big Hit of the Holidays: 14 Million iPods Sold, The Washington Post, 11-Jan-06.