Lennon was right about music and the man

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The notion that extending intellectual property rights in the music industry would provide pensions for ageing and impoverished crooners is an engaging fantasy.

Charlie McCreevy, European commissioner for the internal market, recently announced his intention “to propose to the College [of commissioners] that its term of copyright protection for European performers be increased from 50 to 95 years”.

It is just possible that Mr McCreevy does not understand that copyright on recordings does not vest in performers but in producers, which are in almost all cases record companies. But we can be certain that Guy Hands, whose Terra Firma is the new private equity owner of EMI, Britain’s leading record company, does. So it is no surprise that Mr Hands welcomed the Commission’s proposal to extend sound recording copyright. However Mr Hands’ statement applauded the plan not for its benefit to his shareholders, but on behalf of European artists.

Intellectual property is a new asset class for investors. The music created when British artists transformed popular culture in the 1960s is especially valuable. Since the revenues from extensions will flow through to the bottom line, owners of these rights find it worthwhile to devote substantial resources to lobbying for them. Since this cause is devoid of merit and receives no public sympathy, investors have retreated into the shadows and recruited well-known musicians to front the case.

That is the simple story. The detail is more complex. There are two main copyrights in popular music: copyright in the songs and copyright in the recordings. The right to the songs belongs to the composer and lasts for 70 years after his or her death. The right to the recording belongs to the producer and in Europe lasts for 50 years from the date of the recording.

Both rights can be assigned. Most Beatles compositions, for example, were transferred to a company called Northern Songs. The shares have passed through many hands, including those of businessman Robert Holmes à Court, Michael Jackson and the Sony Corporation. The sound recordings are mainly owned by – you’ve guessed it – EMI. Paul McCartney owns the rights to “Love Me Do” not because he composed the song or because he sang it, but because he bought them from Mr Jackson.

Performers derive their income not from copyright but from their contracts with record companies. Session musicians, like technicians, will normally simply be paid for the jobs they do, but featured artists will generally earn royalties. Normal practice is to pay an advance against royalties. In most cases, this is the only payment ever made, because the advance is not covered by the subsequent royalties.

The vast majority of recordings cease to have any commercial value within a few years and are available only in libraries. Extension of copyright buries such recordings still more deeply in dust, because they cannot be used without the permission of people who have no continuing interest in their old songs, and may indeed be dead. However, the few works that are still available after 50 years were mostly major hits and some performers, their advances repaid, may now be earning royalties. In this indirect way, a few successful artists might derive some benefit if copyright extension allowed record companies to earn higher revenues.

It is possible that Mr McCreevy is really talking about performing rights in sound records. These are a product of the scheme that shares revenues from pubs, clubs and broadcasters between publishers and artists, and they give a share of revenue to session musicians.

But the notion that extending these rights would provide pensions for ageing and impoverished crooners is an engaging fantasy. The typical annual payout is a few pounds – perhaps enough to buy a drink as musicians listen nostalgically to the recordings they performed, but whose copyright they do not own.

There is a case for proposals that might strengthen the rights of musicians against record companies, but that is definitely not the result of copyright extension. If those 1960s veterans understood better what was going on, they might echo the comments of the greatest performer of the era. As John Lennon lost control of his own compositions, he raged against the men in suits sitting on their “fat arses in the City”.

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