In a keynote address at Canadian Music Week, Graham Henderson, President and CEO of national recording industry association Music Canada, has called for fundamental reforms to how music is valued, to close the ‘value gap’ and return viable livelihoods to music creators worldwide.
Graham Henderson pulled no punches in stating that digital technology companies had used creators to build extraordinary wealth, leading to a gutting of the creative class, and that the time had come to redress this imbalance.
Increasingly known as ‘the value gap’ this imbalance is the difference between the amount earned by using the work of creators, and the amount that potentially could be returned to them.
To understand this situation, Graham Henderson examined music’s recent history’s “There was a widespread belief that the digital era would usher in a utopia for both musicians and consumers. In return for the collapse of their traditional marketplace artists were told they would make more money from concerts, merchandise and other means. This was an epic leap of faith with virtually everything riding on one thing – the promise of digital technology.”
Early international copyright treaties assumed the correct balance would be found to “supercharge a digital economy” for the benefit both of creators and consumers. To do this, creators would have to forgo copyright revenues to enable these new technologies to establish themselves in the marketplace. In return creators would be better off by having access to a large and more diverse market place.
“This was the promise of the golden age.”
However, it never eventuated. In fact, a near collapse of the industry ensued. To this day “more than 80 percent of writers in Canada earn income that is below the poverty line, and that is just outrageous” he said. “Artists work longer hours for scandalously less money … an implosion of career opportunities for those who had devoted their lives to cultural expression”.
Graham Henderson questions the supremacy of a market unfettered by governments, where digital corporations amass fortunes without seeking permission, with little regard for consequences.
This problem extends well beyond creators, spreading across multiple sectors in the new economy. “Musicians are struggling at a time when music is generating fabulous amounts of money” but little of this finds its way back to those who made it.
Henderson singled out YouTube as a major culprit, paying royalties eighteen times lower than that of streaming companies such as Spotify. This trend extends across multiple technology platforms.
“The gutting of the creative class over the past two decades has been presented as an inevitability. It is time we question this supposition. We must resist the idea that we cannot change the circumstances in which we live.” In noting the value of a social democracy, and the multiple benefits this great tradition delivers, he said “we can deploy it to restore the balance”.
In rebutting the claim by tech companies that copyright exceptions foster innovation offering economic benefits to all, Graham Henderson points to evidence by Australian researcher Dr George Barker who “found that digital technologies and the internet were associated with sharply reduced demand, prices and sales, and consequently, to lower investment and employment.”
There are positive signs the damage can be redressed, with a turnaround in global music sales driven by growing streaming subscriptions, and governments finally recognising the extent of the problem and beginning to act.
The latest Global Music Report by recorded music association IFPI states that the “Value Gap remains (the) biggest challenge to sustainable growth.” Chief Executive Francis Moore noted “The whole music community is uniting in its effort to campaign for a legislative fix to the value gap and we are calling on policymakers to do this. For music to thrive in a digital world, there must be a fair digital marketplace.”