Consultation outcome

Extension of rights in sound recordings and performances to foreign nationals

Updated 5 November 2024

Summary

The UK is party to various international agreements on copyright and related rights. Under these agreements, the UK extends protection to works (such as music and books) and performances from other countries. In return, those countries provide protection to works and performances from the UK. This enables the UK creative industries to secure remuneration when their music, books, films and other creative media are used abroad.

The government intends to change how certain rights are extended to foreign nationals, to ensure UK law works for both creators and users and is consistent with the UK’s international commitments. This consultation seeks your views on how we should do so and the impacts this will have.

This consultation will be open until 22 March 2024. You should submit your responses via the Citizen Space platform.

Background

1. Copyright protects creative works, such as books, music and visual art. The copyright framework seeks to promote the creation and dissemination of creative works for the enjoyment of the public. It does this by giving those who invest time, effort and money into creating works the exclusive opportunity to commercialise them, in order to incentivise and reward that creation.

2. Sound recordings and performances are among the subject matter protected in UK copyright law. UK law gives producers of sound recordings (such as record labels) exclusive rights to control the copying, making available online, broadcasting, and public playing of their recordings, among other uses.

3. UK law also gives the performers involved in a sound recording (such as musicians and vocalists) similar rights. However, in the case of broadcasting and public playing – for example, where a song is played on the radio, or music is played in a nightclub – the performers involved have a right to an equitable remuneration for that use, rather than an exclusive right. This means that performers do not have a legal right to control the broadcasting or public playing of a sound recording of their performances, but they are entitled to be paid equitably for these acts.

4. The rights of broadcasting and public playing are sometimes referred to as public performance rights (PPR). These rights are administered in the UK by PPL, the UK collecting society for producers and performers of recorded music. PPL issues licences to users of music, such as radio stations and public venues, allowing them to play recorded music to the public.

5. Licensing revenues are distributed by PPL to its members, the amounts distributed reflecting how often and in what circumstances individual recordings have been played. For each recording, revenues are typically split equally between the producer and the performer(s), according to the principle of equitable remuneration.

6. PPR is a valuable source of income for the recorded music industry. In 2022, PPL collected over £188 million for the broadcasting and public playing of music in the UK.

7. Not every country provides PPR. Some countries do not provide PPR at all, while others provide more limited forms of PPR. In the United States, for example, producers and performers are paid for certain digital transmissions of their recorded music, such as some types of internet radio, but not for other forms of broadcasting and public playing. The UK’s treatment of recordings and performances from such countries is the focus of this consultation.

Eligibility for rights in sound recordings and performances in UK law

8. In UK law, a sound recording is eligible for copyright protection, including PPR, if the producer is a national or resident of a qualifying country, or if the recording is first published in a qualifying country. “First published” includes any publication within 30 days of the original publication, and publication refers to the distribution of physical copies of a recording (for example, in vinyl or CD format).

9. A qualifying country is a country that is party to a relevant international agreement on copyright. This includes the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (the Rome Convention) and the WIPO (World Intellectual Property Organization) Performances and Phonograms Treaty (WPPT).

10. Most commercially released recorded music is ‘first published’ in at least one qualifying country. As a result, most commercial recorded music qualifies for copyright, including PPR, in the UK. This is the case even where the country of nationality of the producer does not provide PPR to UK nationals. This means that most producers of commercially released music can license and secure remuneration for use of their music in the UK, including broadcasting and public playing.

11. UK law applies different eligibility criteria for rights in performances. A performer is eligible for rights in their performance if they are a national of a qualifying country, or if their performance is given in a qualifying country.

12. Performers’ eligibility for PPR is subject to further restrictions. In some cases, a foreign performer only qualifies for PPR in the UK where and to the extent that the country of origin of the performance (where the performance took place, or the country of nationality of the performer) provides PPR to UK nationals. This is known as the principle of ‘material reciprocity’.

13. The different treatment applied by UK law to sound recordings and performances means that the performers involved in a foreign sound recording will often enjoy more limited rights than the producers of the recording.

14. This is especially true of PPR. It is not uncommon for a foreign record label, as the producer of a sound recording, to be entitled to PPR in the UK while the foreign performers involved in the recording are not. This means that the UK PPR revenues for some foreign recordings accrue solely or largely to the record label (although contracts between featured artists and record labels can mean that some of those revenues end up being paid through to the featured artists involved in a recording).

15. For example, because the US only provides public performance rights for certain digital transmissions of music, US performers are only entitled to equitable remuneration for equivalent uses in the UK. But US producers are entitled to remuneration in most circumstances where their recordings are broadcast or played in public in the UK, despite equivalent protection not being available to UK producers in the US.

What are the issues to be addressed?

16. The government is considering changes to the law to align eligibility for PPR across foreign sound recordings and foreign performances.

17. At present, UK law restricts foreign performers’ eligibility for PPR on material reciprocity terms but provides PPR to foreign producers on a broad basis. While the international treaties on copyright allow parties to apply material reciprocity in respect of PPR, they require greater consistency between the treatment of performers and producers than UK law currently provides.

18. Because the UK provides PPR to foreign producers on a broad basis, UK users of foreign music, such as broadcasters and shops, gyms and nightclubs, have to pay to play music from certain countries even though users in those countries do not pay to play British music.

19. This results in costs for UK users of foreign music, likely in the tens of millions of pounds per year, that do not have any clear corresponding benefits to the UK creative industries, to UK users, or to UK consumers.

20. Those costs might be reduced or avoided if the UK chose instead to restrict eligibility for PPR on a material reciprocity basis for both producers and performers. Restricting eligibility for PPR in this way could also mean more licensing revenue is available to be shared between UK record labels and artists. It may also encourage other countries to introduce comprehensive PPR, as a means of securing reciprocal PPR revenues from the UK.

21. Alternatively, we could choose to give foreign performers similar rights to those currently enjoyed by foreign producers. This seems unlikely to have significant impact on UK users, labels or artists, but would change the distribution of payments between those foreign labels and artists.

22. This consultation considers and invites comments on the different approaches.

Other intended changes not subject to this consultation

23. On 16 July 2023, the UK signed the Protocol on the Accession of the United Kingdom of Great Britain and Northern Ireland to the CPTPP (the Comprehensive and Progressive Agreement for Trans-Pacific Partnership). The Protocol is the treaty concluded between the UK and the CPTPP signatories which outlines the terms and conditions for the UK’s accession to the CPTPP.

24. In order to comply with obligations in the CPTPP, some changes to UK legislation are required with regards to rights in performances. These changes are necessary for the UK to accede to CPTPP and must be made before accession.

25. This will involve expanding the eligibility criteria for rights in performances to ensure that a performance is eligible for protection in UK law if it is contained in a qualifying sound recording or, for live performances, if it is carried on a qualifying broadcast.

26. These changes will be made by the Trade (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) Bill, which is currently being considered in Parliament. This will be accompanied by secondary legislation. Both the changes in the Bill and the accompanying secondary legislation will take effect when the CPTPP enters into force for the UK.

27. These changes are not the subject of this consultation, but they are noted here because they will affect how the options on PPR would be implemented in UK law.

28. Depending on when CPTPP comes into force for the UK, the changes in the Bill and accompanying secondary legislation could come into effect before the government implements the outcome of this consultation (although the government aims to avoid this by implementing the outcome of this consultation at the same time as the CPTPP Bill takes effect). If this is the case, the Bill and accompanying legislation will result in changes to how we provide PPR to foreign nationals that we may later change further when we implement the outcome of this consultation.

29. The changes arising from the Bill and the accompanying legislation should not be taken as an indication of the government’s long-term approach to PPR.

What are the government’s aims for PPR?

30. The government is seeking to:

• ensure that UK law is consistent with the international treaties on copyright and related rights to which the UK is party
• reduce costs to UK broadcasters and other users of foreign music, if this can be done without significant costs to the UK creative industries or UK consumers
• increase revenues for the UK creative industries, if this can be done without significant costs to UK users and consumers

Options under consideration for PPR eligibility

31. Below is a summary of the options we are considering in relation to eligibility for PPR. This is followed by a discussion of the possible impacts of each option and questions on which we are seeking your input.

Option 0: maintain the status quo

32. This option would mean maintaining the effect of existing law. Foreign producers and foreign performers would continue to be subject to different rules on eligibility for PPR. This is the counterfactual against which other options are assessed.

Option 1: Provide PPR to producers and performers of sound recordings on a broad basis

33. This option would mean providing PPR to the producers and performers of any sound recording that is produced by a national or resident of, or which is first published in, a country that is party to the Rome Convention or WPPT. These are the grounds on which producers of sound recordings currently qualify for PPR in the UK. This option would treat foreign performers in the same way that the law currently treats foreign producers. It would result in an expansion of the pool of foreign performers who qualify for PPR in the UK.

Option 2: Provide PPR to producers and performers of sound recordings on material reciprocity terms

34. This option would mean providing PPR to producers and performers of sound recordings only where and to the extent that the country of nationality of the producer of the recording provides PPR for UK nationals. In effect, it would treat foreign producers in a similar way to how the law currently treats foreign performers. This would result in a significant narrowing of foreign producers’ eligibility for PPR in the UK.

Option 3: Apply Option 1 to pre-existing sound recordings and performances, and apply Option 2 to new sound recordings and performances

35. This option would mean applying the changes in Option 1 to any sound recordings and performances made before the changes enter into force. This would result in an expansion in the pool of foreign performers who qualify for PPR for pre-existing sound recordings.

36. Any sound recordings and performances made after the changes enter into force would instead be subject to the rules in Option 2. This would result in a significant narrowing of foreign producers’ eligibility for PPR in new recordings in the UK.

37. Sound recordings and performances created after this change enters into force would therefore be subject to narrower eligibility criteria for PPR than those created before these changes enter into force.

What are the impacts of the options?

38. In this section, we summarise what we consider to be the likely impacts of each option. The estimated impacts and the methods and assumptions underpinning them are set out in more detail in the Impact Assessment published alongside this consultation.

39. Our estimates are uncertain. Your responses to the questions set out in this section and the evidence you can provide will help us improve the quality of our analysis and support the government’s decision making.

Option 0: maintain the status quo - Questions

40. This option is the counterfactual against which other options are considered.

41. Under this option, UK law would continue to provide PPR to foreign performers and foreign producers on different terms. This would continue to lead to circumstances where a producer of a recording can qualify for PPR in UK law, but the performers involved in that recording may not qualify for PPR.

42. We believe that the treaties on copyright and performers’ rights require greater consistency in how countries provide PPR to foreign producers and foreign performers than would be the case under this option. As such, we do not intend to take this option forward. However, we welcome your views on whether you agree with this assessment.

Question 1. Do you consider the way UK law currently provides PPR to foreign nationals to be consistent with the UK’s international obligations, including those in the Rome Convention and the WPPT? Why or why not? If not, what are the changes needed to bring UK law into line with those obligations?

Option 1: Provide PPR to producers and performers of sound recordings on a broad basis - Questions

43. This option would mean that all producers of sound recordings that are entitled to PPR in the UK would need to pay an equitable share of the PPR revenues to the performers involved in the recording.

44. These changes would only affect sound recordings for which this is not already the case. There would be no direct impacts on, for example, music involving only UK performers, because those performers are already entitled to an equitable share of PPR revenues in the UK. There would also be no impacts on performers from countries which provide PPR to UK performers, as they also already receive PPR under existing UK law.

45. Instead, this option would affect both foreign performers who are currently not entitled to PPR in the UK and the producers that own recordings involving those performers.

46. In practice, we expect these impacts to be concentrated on music owned by US record labels. This is because US performers are generally not entitled to PPR in the UK and because US music is especially popular in the UK. Other foreign music will either not be affected by these changes (because the performers already enjoy PPR in the UK) or any impacts are likely to be small (because that music enjoys only limited popularity in the UK).

47. We expect US record labels to face significant costs under this option relative to the counterfactual, because they would need to share a greater proportion of their UK PPR revenues with their performers. Over the period 2024-2033, we estimate that these costs would equal £230 million. These impacts would continue beyond 2033, but we have not modelled beyond this date due to uncertainties over how revenues might change in future.

48. Those costs would correspond to a gain over the same period of £230 million for US musicians (split between featured artists and non-featured artists).

49. UK record labels and UK artists that work with foreign performers who are not currently eligible for PPR could face some costs under this option for the same reasons. However, we do not expect those costs to be large, as we expect this situation to be relatively uncommon.

50. More broadly, we do not expect this option to result in substantial costs or benefits for UK creators, users or consumers of copyright works. For example, we would not expect this change to result in music licences becoming more expensive for UK users, who would continue to pay for and enjoy access to the same music. Instead, we expect this change to primarily result in a redistribution among foreign record labels and foreign performers of the music licence fees paid by UK users.

51. This option would be consistent with the requirements of the Rome Convention and the WPPT.

Question 2. Do you agree with the assessment of the impacts of Option 1? If you disagree, why?

Question 3. Do you have any other comments on Option 1?

Option 2: Provide PPR to producers and performers of sound recordings on material reciprocity terms - questions

52. This option would mean that foreign producers and performers would only qualify for PPR where and to the extent that the country of nationality of the producer provides PPR for UK nationals. This change would be applied to both pre-existing and future sound recordings.

53. We expect the direct impacts of this option to primarily arise in relation to US music. Under this option, most US recorded music would cease to qualify for PPR, except in the case of certain digital transmissions (e.g., non-interactive internet radio) that are protected in US law.

54. UK broadcasters and those that play music in public in the UK, such as shops, nightclubs, and gyms, would no longer need to pay to license US (and some other foreign) recorded music for broadcasting and public playing (except as noted above).

55. This could result in substantial savings for UK broadcasters and those that play music in public. It could also result in indirect costs or gains for the UK music industry. These impacts will depend on how recorded music licence prices adjust and on whether and how UK users change the music they play following this change.

56. For our analysis, we assume that recorded music licensing costs for UK users decrease under this option, reflecting that their licences would now cover a smaller music repertoire.

57. We assume that users do not change what music they broadcast or play in public in response to this option (i.e. users continue to play the same amounts of UK music as before).

58. We estimate that, over the period 2024 to 2033, this would result in:

• savings for UK broadcasters and those that play music in public of £233 million and £263 million respectively
• additional revenues of £270 million to be split equitably between UK producers and their artists
• reductions in UK revenue for US rights holders of £820 million

59. These impacts would continue beyond 2033 but we have not quantified them.

60. However, these estimates are uncertain and depend heavily on our assumptions (which are set out in full in the Impact Assessment accompanying this consultation).

61. In particular, under this option, UK users might choose to play less UK music in favour of US (and certain other foreign) music, because it would be cheaper for them to do so. This might place downwards pressure on licence prices for UK recorded music or result in fewer licences being sold. While this might result in greater savings for UK users, this would be at the expense of UK producers and performers, who might face costs under this option that outweigh any gain. This would be damaging for the UK music industry, including for investment in new UK artists, and could have knock-on consequences for UK consumers and for UK music exports.

62. This option would also likely require that users and PPL (the UK collecting society for producers and performers) negotiate new licences. These licences would likely become more complex (given that only some recorded music would be within scope of the licences), which could mean significant upfront and recurring administrative costs for UK users and the UK music industry, which might limit any gains.

63. The substantial reductions in revenue for US record labels under this option could restrict their ability to invest in new artists. While this will primarily affect US musicians (rather than UK musicians), it may in time affect the quality and quantity of music available to the UK public.

64. Additionally, changing the eligibility criteria applied to rights in pre-existing sound recordings, after record labels and artists have already invested in the making of those sound recordings, could damage investor confidence and harm investment in new music. While this risk is challenging to assess and quantify, it could be significant. A reduction of investment in new UK music would directly harm the UK music industry and UK consumers, who might see a lower quality or quantity of music in future.

65. Together, this means that while this option might deliver significant savings to UK users and could benefit the UK music industry, it also seems to carry risks to the UK music industry.

66. This option would be consistent with the requirements in the Rome Convention and WPPT.

Question 4. How will/should licence prices for the broadcasting and public playing of recorded music change under this option?

Question 5. What would be the benefits of savings for UK broadcasters or those that play music in public under this option?

Question 6. What would be the benefits or costs in terms of increased or reduced remuneration to UK record labels and performers under this option?

Question 7. What upfront and ongoing administration and legal costs (such as the costs of renegotiating licences) might arise under this option? Can you quantify these?

Question 8. Do you think this option will cause users to reduce the amount of UK music they play? If so, why, and to what extent will this effect take place? How will this affect the UK music industry?

Question 9. How might the costs on foreign (especially US) record labels under this option indirectly affect the UK music industry or UK consumers?

Question 10. Do you have any other comments on Option 2?

Option 3: Apply Option 1 to pre-existing sound recordings and performances, and Option 2 to new sound recordings and performances - questions

67. This option aims to secure some of the benefits to UK users and the UK music industry seen in Option 2 without changing the eligibility criteria applied to rights in pre-existing sound recordings.

68. This would lead to some similar effects to those seen in Option 2, but the costs and benefits would be of smaller magnitudes.

69. If this option led to an equivalent reduction in PPR licence prices as assumed in relation to Option 2, we estimate that this would result in the following impacts over the period 2024-2033:

• savings for UK broadcasters and those that play music in public of £112 million and £127 million respectively.
  
• gains of £130 million to be split equitably between UK record labels and artists.
  
• reductions in revenues and costs on US record labels totalling £515 million.
  
• gains of £119 million for US artists whose performances are contained in pre-existing sound recordings

70. This could lead to similar indirect effects as set out for Option 2, such as:

• broadcasters and businesses that play music in public may choose to play more new US (and other foreign) music at the expense of UK music, on the basis that it is cheaper to do so. This could be damaging to the UK music industry
• UK users and PPL are likely to need to renegotiate their licences as a result of this option. That process is likely to become more complex (and therefore more costly) under this option, which could dampen any gains that might otherwise be realised under this option
• the substantial costs on US record labels under this option could restrict their ability to invest in new artists. While this will primarily affect US musicians (rather than UK musicians), it may in time affect the quality and quantity of music available to the UK public

71. As with Option 2, the scale of these indirect effects is challenging to assess, but we expect these impacts to be smaller in scale than the indirect impacts that might arise under Option 2.

72. Additionally, unlike Option 2, this option does not affect the status of protection for pre-existing sound recordings. As such, this option should avoid the risks associated with this described in relation to Option 2.

73. This Option would be consistent with the requirements in the Rome Convention and WPPT.

Question 11. How will/should licence prices for the broadcasting and public playing of recorded music change under this option?

Question 12. What would be the benefits of savings for UK broadcasters or those that play music in public under this option?

Question 13. What would be the benefits or costs in terms of increased or reduced remuneration to UK record labels and performers under this option?

Question 14. What upfront and ongoing administration and legal costs (such as the costs of renegotiating licences) might arise under this option? Can you quantify these?

Question 15. Do you think this will cause users to adjust the amount of UK music they play? If so, why, and to what extent will this effect take place? How will this affect the UK music industry?

Question 16. How might the costs on foreign (especially US) record labels under this option indirectly affect the UK music industry or UK consumers?

Question 17. Do you have any other comments on Option 3?

Proposed approach

74. The government believes some change to the law in this area is necessary for consistency with the treaties on copyright and performers’ rights. As such, we do not intend to take forward Option 0. But we welcome views on whether you agree with this assessment and could revisit this option in light of those views.

75. Of the options to change the law, the government does not favour Option 2. This option appears to carry risks to the UK music industry, including that removing protections for pre-existing sound recordings could undermine business certainty and reduce investor confidence in the music sector.

76. The government is currently considering Options 1 and 3. Both are consistent with the requirements of the Rome Convention and WPPT. Option 3 could also secure significant savings for UK broadcasters and those that play music in public, as well gains for UK record labels and artists. However, the impact of Option 3 (and Option 2) depends on factors such as how music licence prices will adjust, and whether and how consumption of UK versus foreign music will change. Depending on these factors, this option could result in unacceptable costs to the UK music industry. If such costs are likely under Option 3, Option 1 is likely to be preferable as a relatively low-risk alternative.

77. These uncertainties are why we are running this consultation. We want to understand better the impacts of each option, so we can ensure that our approach supports both UK users and the UK creative industries.

Question 18. What is your preferred option and why?

78. Our questions for you are set out again in the next section. Wherever possible, please provide evidence to support your comments. We will take your responses into account when deciding on our approach, which will be published in due course after the conclusion of this consultation.

Consultation questions

Option 0

Question 1. Do you consider the way UK law currently provides PPR to foreign nationals to be consistent with the UK’s international obligations, including those in the Rome Convention and the WPPT? Why or why not? If not, what are the changes needed to bring UK law into line with those obligations?

Option 1

Question 2. Do you agree with the assessment of the impacts of Option 1? If you disagree, why?

Question 3. Do you have any other comments on Option 1?

Option 2

Question 3. How will/should licence prices for the broadcasting and public playing of recorded music change under this option?

Question 4. What would be the benefits of savings for UK broadcasters or those that play music in public under this option?

Question 5. What would be the benefits or costs in terms of increased or reduced remuneration to UK record labels and performers under this option?

Question 6. What upfront and ongoing administration and legal costs (such as the costs of renegotiating licences) might arise under this option? Can you quantify these?

Question 7. Do you think this option will cause users to reduce the amount of UK music they play? If so, why, and to what extent will this effect take place? How will this affect the UK music industry?

Question 8. How might the costs on foreign (especially US) record labels under this option indirectly affect the UK music industry or UK consumers?

Question 9. Do you have any other comments on Option 2?

Option 3

Question 11. How will/should licence prices for the broadcasting and public playing of recorded music change under this option?

Question 12. What would be the benefits of savings for UK broadcasters or those that play music in public under this option?

Question 13. What would be the benefits or costs in terms of increased or reduced remuneration to UK record labels and performers under this option?

Question 14. What upfront and ongoing administration and legal costs (such as the costs of renegotiating licences) might arise under this option? Can you quantify these?

Question 15. Do you think this option will cause users to reduce the amount of UK music they play? If so, why, and to what extent will this effect take place? How will this affect the UK music industry?

Question 16. How might the costs on foreign (especially US) record labels under this option indirectly affect the UK music industry or UK consumers?

Question 17. Do you have any other comments on Option 3?

Overall

Question 18. What is your preferred option and why?