Regulating for creativity and cultural diversity: the case of collective management organisations and the music industry

Abstract

This paper explores the role of intermediary institutions in promoting creativity and cultural diversity in the music industry, and the impact of cultural policy on the performance of those intermediaries. It reviews some of the existing literature on the relationship between economic conditions and innovation in music, and argues that too little attention has been paid to intermediaries. Focusing on collective management organisations (CMOs) as one example of overlooked intermediaries, we illustrate, by way of comparison, the different priorities and incentives that drive CMO practice. These variations, we suggest, are important to appreciating how CMOs operate as intermediaries in different territories. We then turn our attention to recent attempts by the EU to reform CMO practice as part of its Digital Single Market project. The fact that the CMO has been an object of reform is indicative of its importance. However, there is more at stake here: the reforms themselves, in seeking to change the role and behaviour of CMOs will, we suggest, have profound consequences for the market in music in Europe, and for creativity and cultural diversity within that market.

Keywords:

• Digital Single Market
• collective management organisations
• music industry
• creativity
• cultural diversity
• EU

Acknowledgements

Versions of this paper have been given at the IASPM Conference, Gijon Spain, 24–28 June 2013; the CRASSH Copyright Conference, University of Cambridge, 28–29 March 2014; the IASPM UK–Ireland Conference, Cork, 12–14 September 2014; the Workshop on ‘Creativity and institutions’, University of Cambridge, 9 December 2014; and ‘The economics of creativity and competition’, CREATe/CCP Conference, UEA, 4–5 February 2015. We are very grateful for the comments and the suggestions we received at all these events. A particular debt of thanks is owed to Ruth Towse for her comments on an earlier draft, and for the comments of two anonymous referees on a later version.

Notes

1. Or more accurately, ‘originality’, since the law is silent on creativity. With thanks to Ruth Towse for this point.

2. Council of Europe statement on Values, available at: http://www.coe.int/en/web/about-us/values.

3. See http://www.authorsocieties.eu/uploads/Modules/Library/rapport-benabou_gestion-collective-(2)-2.pdf.

4. These could be reinstated, but only if all member states agree.

5. See, by way of contrast, the Irish Music Rights Organisation (IMRO) which states that it is ‘prominently involved in the sponsorship and promotion of music in Ireland’ (IMRO website: http://www.imro.ie/about-imro/).

6. WMPCA then established its own CMO, Eos, to negotiate directly with the BBC, the main broadcaster of Welsh language music and other programming. The resulting impasse led to a hearing before the Copyright Tribunal.

7. It is important to note that STIM and ASCAP deal in performing rights only; GEMA, SACEM and PRS deal in licensing, performing and mechanical rights; SGAE and SACE manage music and audioviual rights. Our thanks to Frances Lowe of PRS for Music for drawing our attention to these differences.