Intellectual property rules are an attempt to strike a balance between conflicting public interests and the need to provide economic incentives. However, companies should find commercial success through new products, not new legislation.
An advertisement in last Thursday’s Financial Times demanded “fair play for musicians” and was signed by thousands of people whose names rarely appear in this newspaper – Sir Cliff Richard, Sir Paul McCartney and Sir Simon Rattle. The advertisement raised more questions than it answered. Why the FT? And why, amid the mass of print, was there no explanation of the issues or mention of the company principally responsible for the campaign? Here is the story.
EMI was probably Britain’s most innovative business of the 20th century. It pioneered television, sold the first commercial computer, made the breakthrough in transferring technology from defence electronics to medicine that put a scanner in every hospital and, in the 1960s, transformed the popular music industry. But – and this is a very British story – the company’s inventive capability was never matched by its manufacturing strength or commercial acumen. EMI exited television and computing in the face of powerful competition and never recovered from its trouncing by GE in the medical equipment market. Music is, today, its main activity.
The 1950s split the generations as kids learnt to love music their parents hated – Elvis Presley, rock and roll. George Martin was the innovative genius behind EMI Records. He scored hit after hit and signed the group that would transform popular music, help make swinging London the capital of cool – and create shareholder value. The Beatles.
Copyright in sound recordings lasts for 50 years and usually rests with the record company rather than the artist. The benefits to the signatories of last week’s advertisement, if any, will be derived from the – confidential – terms of their 50-year-old recording contracts. Rights in music and lyrics are governed by different rules to that of recordings. Between now and 2020 copyright in recordings from the golden era of British popular music will gradually expire.
In 1998, the Disney Corporation persuaded US Congress to extend the company’s exclusive rights to Mickey Mouse and its stable of cartoon characters. EMI has sought to emulate Disney’s success, along with its tactics. The 1998 legislation is linked, by the well informed, to Disney, but is publicly associated with Sonny Bono, the congressman who enjoyed a previous career as part of the singing duo Sonny and Cher. Pressure on the government – ostensibly led by Sir Cliff – was a principal reason for the government to commission the Gowers review of intellectual property, which reported last week.
Intellectual property rules attempt to strike a balance between conflicting public interests in the desirability of distributing new ideas and creative material as cheaply and widely as possible, and the need for economic incentives to develop ideas and new creative material. Once the argument is framed in those terms, it is obvious that extending the terms of existing copyrights leads to monopoly and higher prices while doing nothing for incentives. Perhaps, although it does not seem very likely, prospective rivals of The Beatles were deterred by the knowledge that copyright in their recordings would last only 50 years. If so, we are all poorer for it, but there is nothing anyone can do now.
Andrew Gowers puts forward the principle that there should generally be no retrospection in the amendment of economic interests in copyright. Indeed, once the issue is framed in terms of the balance between rewards for artists and companies and a vibrant cultural domain, it is evident that 50 years of exclusivity is not too short but too long. Most people whose recordings are still current after 50 years have already done well out of them, but most recordings from the 1960s are no longer available at all. Mass market publishers have little commercial interest and the real need is for archiving and reissue.
For two decades, large companies have pressed persistently and generally successfully for extension of intellectual property rights. But the tide has begun to turn. Companies should find commercial success through new products, not new legislation. The scholarly and creative communities have gradually come to realise that the interests of their publishers are not necessarily identical to their own, even if musicians are slow to catch on.