15,000 artists warn EC not to fix the ‘Value Gap’ in favour of major labels

15,000 artists from across Europe have released a statementwarning the European Commission against proposing new legislation regarding the ‘Value Gap’.

Issued via their representative body the International Artist Organisation (IAO), the statement notes that using the majors’ proposed amendments to fix the ‘Value Gap’ (aka the issue with user-generated media sites) won’t be the silver bullet the digital economy needs.

Explained in the letter, the ‘Value Gap’, also known as the ‘YouTube Question’, “concerns the zero or extremely small payments for the exploitation of copyrighted works when platforms use ‘safe harbour’ exceptions to copyright law in all or part of their service offer.”

The IAO brings together artist organisations from 10 countries across Europe representing over 15,000 artists.

IAO President and CEO of the UK’s Featured Artists Coalition, Paul Pacificosaid no platforms or labels should be able to use “contractual gymnastics” to deny emerging stakeholders to profit from their works.

“Yes we must pull together to ‘increase the size of the so-called cake’as we are constantly told, but to ignore how that cake is being cut at the same time would be to ultimately take the artists’slice off the table,” said Pacifico.

The statement, published yesterday, is addressed to EC president Jean-Claude Juncker, vice president Andrus Ansip and the commissioner for digital economy and society, Günther Oettinger.

“Usage on YouTube is indeed vast and in terms of functionality it is all too close to services which pay up to ten times more,” the letter reads. “YouTube argues that there are key and fundamental differences in their consumer proposition that justify their business model as not comparable with what the record labels call ‘fully licensed’ services. YouTube states that it is ‘fully licensed’. This is clearly confusing.”

The letter also notes Non Disclosure Agreements (NDAs) between labels, platforms, trade bodies and European competition law are a major obstacle for IAO when it is negotiating deals for artists.

“We are told in bilateral conversations on both sides of the Value Gap that Non Disclosure Agreements (NDAs) around the Labels’ licenses mean that meaningful progress with individual companies towards a fair and transparent market cannot be discussed with artists.

“Equally in discussions at trade body level, we are told that competition law prevents a ‘whole of market’ solution.”

It behoves the European Commission to ensure any new legislation regarding the ‘Value Gap’ give equal opportunities to artists, songwriters, performers and other small businesses.

“We have recommended to artists across the globe that they support the Labels in their quest to review value- gap legislation on Safe Harbours both in Europe and the USA,” the letter reads. “However we must be careful to make sure that this review includes the whole value chain and that the results are not just to pass value one link down the chain where it stops with the Majors.”

To help resolve the ‘Value Gap’, the IAO is requesting the following four pillars be included in the EU’s copyright review of the Digital Millennium Copyright Act (DMCA) and safe harbour reform:

1. Transparency through the value chain where we have a financial interest
2. A Fair Share of Value being generated by our work
3. A Duty of Care from our intermediaries through the value chain
4. Updated remuneration rights to reflect the realities of consumer behaviour in digital

The letter follows another letter signed by 58 members of the European Parliament. The MEPs’ letter was also addressed to President Juncker and called on the European Commission to clarify the status of online services, which are protected by safe harbours inproviding access to creative works.

The letteralso follows deep criticism in the US from Katy Perry, Trent Reznor and Nikki Sixx’s band Sixx:AM, and anotherletter signed by more than 180 people and delivered to US Congress. Its signees includiedartists Taylor Swift, Troye Sivan and Paul McCartney, industry players like the NMPA and Kobalt, and the big three record labels, Sony, Universal and Warner.

In various statements to media over the past few weeks, YouTube has maintained it is a music industry ally.

“The voices of the artists are being heard, and we’re working through details with the labels and independent music organizations who directly manage the deals with us,” it told Music Business Worldwide. “Having said that, YouTube has paid out over $3 billion to the music industry, despite being a platform that caters to largely light music listeners who spend an average of one hour per month consuming music — far less than an average Spotify or Apple Music user.”