A new report entitled Streams & Dreams Part 2 – The Impact of the DSM Directive on EU Artists and Musicians, written by the independent music business researcher Daniel Johansson (Inland Norway University of Applied Sciences) and published on June 13th, proves the ineffectiveness of the DSM Directive.
Based upon a survey of 9.542 artists from 19 EU countries, conducted by AEPO-ARTIS and its members in collaboration with IAO, this is one of the most substantiated reports ever done on issues related to performers in the music industry. The report is available here.
The report focusses on the provisions in Chapter 3 (“Fair remuneration in exploitation contracts of authors and performers”) of the directive, which oblige Member States to guarantee artists effective rights: to receive appropriate and proportionate remuneration, to receive transparent information on all exploitations of their recordings, to claim additional remuneration and recover rights from record labels in certain situations, and to request alternative dispute resolution.
It came as no surprise to AEPO-ARTIS that the DSM directive has had almost no positive impact on EU performers:
Appropriate and proportionate remuneration: only 5.1% of signed artists considered their streaming revenue to be satisfactory. Transparency: 77.6% of musicians still do not receive the transparent information from labels that they are legally entitled to receive, despite article 19 obliging record labels to produce this information proactively. Alternative dispute resolution: The possibility of alternative dispute resolution (designed to avoid costly litigation and minimise hostility between those in dispute) has barely been used and when it was, a majority of artists (60%) did not find it helpful.
The author reaches the conclusion that: “This report has primarily demonstrated that, although Articles 18-22 were designed and implemented in national legislation to strengthen the position of artists and musicians in the market, gaps in the effectiveness of the legislation still remain. Consequently, this report suggests that additional measures are required by the EU, its Member States, and the music industry.”
Unlike their approach to article 17, the European Commission has failed to give any official guidance on how to implement chapter three. It appears that they have been relying on the belief that a literal transposition of Chapter three would address the problem identified by the directive, i.e. the weak position of performers (and authors) and that the goal of fair remuneration would be achieved. Moreover, by starting an infringement procedure against more than 20 Member States, they have pushed many towards a literal transposition.
Overwhelming evidence now shows that this believe is naïve and it would be a dereliction of duty for the Commission to continue to rely on it. They now have a responsibility towards performers to intervene in a meaningful way.
But Members States are not let of scot-free either.
Now that the French government has evidence that the satisfaction of French artists with streaming revenue (2.94%) is lower than the EU average (5.1%), are they willing to wait for the Commission to take action? Is the Irish government willing to ignore the fact that not a single Irish artist expressed satisfaction with their streaming revenue? Does the Portuguese government consider it relevant that more than 1.000 of their artists felt strongly enough to freely give their time to complete a survey? When 95.44% of their artists consider the way streaming revenue is shared to be unfair, does the Portuguese government believe it is acceptable to remain inactive?
The author of the report describes one specific situation in which the intervention of the Commission is “imperative”. With regard to session musicians, who receive no remuneration for streaming, he stated that:
“As session musicians do not possess a remuneration right for streaming, it is imperative to provide EU-level recommendations on whether Member States should introduce such a remuneration right.”
For too long, artists have endured stakeholder dialogues, consultations and ultimately a lack of willingness on the part of the Commission to take decisive action. The question of a remuneration right for session musicians could hardly be more straightforward. The Commission is fully aware that session musicians receive no remuneration at all from streaming. They are fully aware that there is no legal impediment to such a right. They are now aware that five years after the adoption of the DSM Directive 87.6% of artists consider the way streaming revenue is shared is not fair. It is now purely a matter of political will.
When mechanisms that rely on the responsibility of the industry to achieve a policy goal fail, focus needs to be put on mechanisms that allow policy makers to take responsibility. And those can be found in article 18 of the directive. It is well known that several Member States have introduced additional remuneration mechanisms that have an effect that goes beyond the contracts that performers sign and benefit the artistic community as a whole.
It is clear that an effective implementation of article 18 is essential if performers are to see meaningful change. A report fed by the voices of 9.542 performers makes this an irrefutable fact. It is up to the Commission now to take this fact serious and push its Members States towards an effective implementation. It is up to the Member States to not wait for that push to become shove.
