Music Rights and the Inflight Entertainment Industry
Iain Kemplay – Head of International Licensing, PRS for Music, UK
Mark Isherwood – Rightscom Limited, UK
Frankfurt – Wednesday 12th May 2010
Presentation outline• General principles of copyright
• Copyright in music
• Administration of music rights
• Music rights organisations
• What does this all mean for IFE
• So, what’s changing?
• Why is the topic important today?
• The value of music
General principles of copyright• Copyright one of a range of concepts that
are protected under IP legislation
• Others include patents, trade marks, trade secrets, designs
• Two main treaties which govern copyright: - Berne Convention of 1886- Rome Convention of 1961
General principles of copyright• World Intellectual Property Organisation
focused on internet and new technologies
• 1996 treaties
– Copyright Treaty
– Performers and Phonograms Treaty
• Spawned
– Digital Millennium Copyright Act (US)
– European Copyright Directive
Copyright in musicWhat is protected? For how long?
Musical works
Sound recordings (separate from themusical work(s) on them)
Performers
Published editions
From creation to 70 years from the death of the last creator
50 years – USA 90 –after year of release
50 years after year of performance
25 years after year of publication
What are the restricted acts?
The owner of the copyright in a work has the exclusive right….
• To copy the work• To issue copies of the work to the public • To rent or lend the work to the public• To perform, show or play the work in public• To communicate the work to the public (includesbroadcasting and electronic transmission)• To make an adaptation of a work or do any of the above in relation to an adaptation
Copyright in a work is infringed by a person who without the licence of the copyright owner does, or authorises another to do, any of the acts restricted by copyright
These apply to musical works and sound recordings:
What does this mean to IFE?• Almost always all movies, videos, TV
programmes and games will come to IFE producers “all rights cleared”
• Means all contributors (including performers) have given permission for inclusion of their “contribution” and its playback by passengers
• This usually includes copying of musical works and sound recordings into the movie, video, TV programme or games
What does this mean to IFE?• IT DOES NOT cover the public
performance of copyright musical works and sound recordings included in the movie, video, TV programme or game!!!
• The permission of the owner(s) of the musical work(s) and sound recording(s) is required for this public performance
What does this mean to IFE?• All audio-only programming including CD
selections need the permission of the copyright owners for
• The copying of the musical work and sound recording AND
• The public performance of the musical work and sound recording
Administration of musical works• In droite d’auteurs territories composers
assign performing and reproduction rights to– Musical work rights societies who carry out
performing and reproduction right licensing
• Prevalent in Continental Europe, Japan and Latin America
• Rights society actually owns the rights
Administration of musical works• In copyright territories composers assign
performing rights to – Musical work rights societies who carry out
performing right licensing• And reproduction rights to music
publishers who (as far as IFE is concerned)– Authorise a music rights society to licence
reproduction of the musical works• Broadly applies to Anglo-American works
Administration of musical works• Music rights societies enter into reciprocal
agreements with other such societies around the world in respect of each set of rights
• This creates a network of rights flowing from around the world into each territory
• So a performing rights society based in Europe can– Issue a performing right licence for its territory in
respect of the worldwide repertoire
Administration of musical works• Not all copying rights are passed to
societies
• IFE usage is generally included in most society authorisations– So a society can issue copying licence for
worldwide repertoire for its territory
• Not in the US, Canada, most of Asia and some others– Licences have to be obtained from publishers
Musical Work Performing Right: Europe
PRS GEMA SACEM
John HillFranz Schmit
Francois Dupont
Assignment AssignmentAssignment
Reciprocal Agreements
Membership Membership Membership
EMI Music Publishing Ltd.
EMI Music Publishing Gmbh
EMI Music Publishing SA
Representation Representation Representation
Sub-publishing Agreements
PRS
GEMA
SACEM
Worldwide Repertoire
From Worldwide Societies
Musical Work Copying Rights: Europe
MCPSPRS GEMA SACEM
Franz Schmit
Francois Dupont
SDRM
Assignment Assignment
John Hill
EMI Music Publishing Ltd.
Assignment
Reciprocal Agreements
Representation
Membership Membership
EMI Music Publishing Gmbh
EMI Music Publishing SA
Representation Representation
Sub-publishing Agreements
GEMA
MCPS
EMI Music Publishing Ltd.
Anglo-AmericanRepertoire
Repertoire of Droit D’Auteurs
Societies
Anglo-AmericanRepertoire
EMI Music Publishing SA
Administration of sound recording and performers performing rights
PPL GRAMEX
Simply RedAcqua Smurfs
Universal Music Group Ltd
SENA
Assignment Assignment
Representation
Reciprocal Agreements
Membership Membership
Representation Representation
Universal Music Group ApS
Universal Music Group N.V.
Distributions Agreements
Membership
The exceptions• In Australasia, Japan and some other parts of
Asia and in parts of Latin America it generally works the same way as in Europe
• In the US and Canada licences may be direct with individual publishers or through a society representing some publishers
• In the rest of Asia, the rest of Latin America and Africa licences will generally be direct from individual publishers or a collective trade association (e.g. Hong Kong, Singapore)
The exceptions• In the US no performance right for sound
recordings or performers except when the performance is digital (e.g. internet radio)
• The sound recording society network of reciprocal agreements is not as advanced as for musical works
• In some territories no societies exist even though copyright legislation does– Middle East, parts of Africa
• Means all licensing done direct!!!
The exceptions• This means there may be repertoire gaps
in licences– Generally not a problem with any Anglo-
American repertoire– Nor the local repertoire of operation– But some problems with some Asian, Latin
American and African repertoire
Music rights organisations
• PRS for Music– PRS and MCPS – 1914
and 1911– 65,000 publisher,
composer and author members
– Access to over 10m works– International affiliates in
170 territories– 2009 processed over 1bn
bits of data
• PPL– Created in 1934 by EMI
and Decca– Now 3,000 record
companies– Stephen Carwardine & Co.
case– 2006 saw merger of
PAMRA and AURA – 42,000 performer member
In the UK, there are separate organisations to represent the interests of the owners of the musical works and the sound recordings
Benefits & challenges• So, collectively we represent and can
provide licences for the use of the vast majority of music available
• There are similar organisations in most other territories in the world and of comparable size
• Via representation agreements with each other, any of us can provide access to the worlds favourite music
Benefits & challenges• Benefits
– To our members – in a world where their music is used in various ways by many businesses
– To licensees – the time, cost and resource needed to individually licence
– We can provide blanket access on standard terms via one trusted party on a multi-service, multi-territory basis
– BBC – premium value to collective licensing of rights
• Challenges– But this is not quite true –
situation in USA– Interests of major members– Challenges of technology– Uneven copyright
legislation– RTL vs. GEMA
Copyright Tribunals• These exist in some form in most
legislations
• Designed to resolve disputes on terms and fees between licensors and licensees
• So if any licensee is being “unreasonable” you have CT to fall back on
• However– Frequently expensive– Slow!
Approaches to licensing• Not surprisingly, different societies in
different territories take different approaches and put different values on licensing
• For example– PRS: pence rate per passenger– BUMA: square metres– STIM: rate per aircraft– GEMA: annual rate
So what’s changing?• This is compounded by the development
in technology and the application and interpretation of rights
• Which rights apply, what restricted acts are being undertaken, in what territory and who is liable
• These are challenged both in acceptance and interpretation by licensees
So what’s changing?• This could be a cost issue, a liability issue
or even a lack of awareness issue
• But in an age when production of in flight content has broadened to reflect the territorial capability of the marketplace, this makes music rights licensing even more complex and challenging
Let’s use other music• The thought which must pass through
many content producers’ minds is– If it is this difficult, why don’t we use some
other music?• There is some validity to this argument;
let’s look briefly at the options:– Specially commissioned– Out of copyright music– Unsigned artists/bands– Buy-out music – Creative Commons
Let’s use other music• These are increasingly used as an
alternative source of music– Cheaper and fully rights cleared
• But if you want to enjoy the use of the worlds best loved music……….
Why are music rights important to you today?
• ‘…the increasingly relevant world of music licensing for airlines’
• This is a really interesting topic – the value of music to airlines and the value of music itself
• We are discussing this today, not just because it is complex but principally because it is highly relevant and important to the IFEC content provision airlines are increasingly providing
Why are music rights important to you today?
• There is no obvious side step around music rights if airlines want to use the worlds best music – and you do!
• Thought it would be interesting to explore this further
Growth of inflight entertainment• 1921 Aeromarine Airways - ‘Howdy
Chicago’
• 1936 Hindenberg – provision of a piano
• 1962 PAN AM – first airline to use tv monitors
• 1975 Braniff International Airways – first Atari video games– and now the acronym has moved to IFEC
Growth of inflight entertainment• Emirates – ICE system provides
– Access to plane’s external cameras– Live business, news and sport headlines– Phone, SMS and email– 1200 channels of premium entertainment
• And the importance of music to these services– It is a key part of or can be integrated into all
of them • Example – US Airways Airbus A320 trial
Airline investment• I had not appreciated the investment that
airlines make in their inflight entertainment provision
• The following are thought provoking– Systems safety and regulation – ‘The vast majority of airlines that we talk to
look at IFEC as an investment rather than a cost’ Neil James, Executive Director at Panasonic Avionics
Airline investment• Installing IFEC systems ranks second in cost
behind aircraft engines
• Recognised as an ancillary revenue stream but most importantly of building customer loyalty
• ‘Today (2005) Emirates’ typical investment in inflight entertainment systems equates to nearly US$10m per aircraft’ Patrick Brannelly, Emirates
• British Airways invested £80m in 30,000 seatbacks in September 2009
Value of music to airlines• No empirical evidence to qualify but the
message appears to be: – Music helps relax people and make them
more comfortable – It’s a key part of keeping them entertained
and of communicating with them – This is important to a customer service
business – aerophobia is believed to effect 1 in 5 people
• ‘A happy passenger is a repeat passenger’ (Avionics magazine 02/10)
Value of music in itself• Music production and consumption makes
up a significant part of the World’s creative economy– In the UK alone this figure is £6bn (2008)
• Research by Will Page, Chief Economist for PRS for Music, shows that – In 2009 the UK bucked the perceived
downward and fatal trend in music royalties– Value from traditional retail sales was
collapsing but music in business was growing by a far greater degree
Value of music in itself• The substantial development of IFEC systems
and their capacity for content is reflective of this
• Alfred Hitchcock – ‘If the music and the visuals say the same thing, then the music is not working’
• Let’s remember the extraordinary lengths that performers, songwriters and musicians can go to record their songs and the powerful effect music has on each of us
Myths!• If you only use 30” of a work you don’t
need a licence– Not true
• Using music helps promote it– Maybe, but not relevant to licensing
• If a record label sends me a CD I can use it without licence– Not true a licence will still be required
Summary• Music rights are complex and particularly
so in today’s worldwide businesses
• The complexities reflect – The structure of copyright– It’s provision under law– The continually developing technological
environment and changing basis under which rights owners want to be represented
• But – it is clearly necessary and worth it.
One take away
Performing Right Society
(e.g. PRS, GEMA, ASCAP, CASH, APRA
etc.)
Phonographic/Performer Society
(e.g. PPL, GVL, PPCA, CPRA, ABRAMUS etc.)
Mechanical Right Society
(e.g. MCPS, SDRM, AMCOS, HFA etc.)
ORMusic Publishers
Phonographic/Performer Society
(e.g. PPL, GVL, PPCA, CPRA, ABRAMUS etc.)
ORRecord Companies
PublicPerformance
Copying
Musical Works
Sound Recordings/Performers
Final observations• Along with many businesses, airlines play
an increasingly important role to provide access to an audience– To be seen to support and respect intellectual
property – Participate in providing new revenues for
creators to create• Aircraft provide a captured audience of
millions per day• There is an interesting dialogue to
continue….
Questions!!!!
Music Rights and the Inflight Entertainment Industry
Iain Kemplay – Head of International Licensing, PRS for Music, UK
Mark Isherwood – Rightscom Limited, UK
Frankfurt – Wednesday 12th May 2010
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