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Sony Music UK chairman and CEO Nick Gatfield has revealed that telecoms companies will be a “huge partner” for the major label in future when it comes to establishing creative and innovative music services - but the government’s Digital Economy Act must evolve by 2014 if copyright holders are to be protected against online piracy.
Speaking on a panel at UK Trade & Investment’s Creative Content Summit at The British Business Embassy on Tuesday, Gatfield reminded delegates that digital services are responsible for 50% of music revenue and 80% of overall consumption of music.
“That’s clearly where the audience is, “ he said. “The question for us is, ‘How can we monetise that to [create funds to] invest in further artist development and encourage Government to build a framework to protect rights holders?’”
“Something we’re a big believer in at Sony is creative innovation with a myriad of digital platforms,” he added.
“Certainly telecoms companies look like they’ll be a huge partner for us with the advent of 4G. It’s about really looking for strong commercial solutions. I think that’s the future.”
Gatfield later told Music Week, “I would argue that a lot of the commercial services offered by telecoms in the past have been fairly poorly handled and low profile and they haven’t gained traction. I find that extraordinary.
“There’s an awful lot that we as an industry can bring to the telecoms business in terms of what consumers want. They understand their customers but we understand music consumers and I think there’s a real value to us working together to create compelling commercial offerings.”
Gatfield argued that IP protection is just as important but expressed fears that the current evolution of digital technology was happening far too quickly for the government’s Digital Economy Act – which won’t have an impact until 2014 at the earliest.
“When we started this journey of legislation five years ago, an awful lot of our attention was focused on peer-to-peer [distribution], which evidence suggests is waning,” he said. “We haven’t really addressed the mobile space but that’s clearly where consumption will be going and where the pressure point is.
“My fear is that the legislation might be largely redundant when it does come into effect. It’s got to evolve.”
Gatfield, however, reiterated that legislation alone won’t be enough: “The best anti-piracy measures you can build are compelling commercial services.”
The Sony Music UK boss suggested that Google could become an important creative partner for the music industry in future, despite the tussle that has taken place between the two sides when it comes to establishing roles in the battle against copyright infringement.
“The debate surrounding internet piracy is still technology versus creativity and it shouldn’t be,” he said. “We need to have a symbiotic relationship.
“I honestly believe that Google is a responsible company. There’s a slight difference of opinion regarding search engine optimisation and site prioritisation but it’s an ongoing debate.
“As Google comes to launch Google Music here, that debate will pick up pace and I’m sure we’ll work out a solution.”
Vaizey rejects music tax breaks for IP protection focus
The Minister for Culture, Communication and the Creative Industries Ed Vaizey spoke of his delight about tax breaks being offered to TV, animation and video games at the UKTI’s Creative Content Summit - but didn’t see the need for similar credits to be extended to the UK music industry.
“We’re still continuing to invest in our creative industries and I was delighted that the chancellor confirmed that we’re introducing tax credits for television, animation and video games in our last budget,” Vaizey told delegates from Britain’s creative industries including theatre and publishing. “There is no better time to come to the UK, to invest in the creative industries.”
When Music Week asked Vaizey why the music industry was yet to see tax breaks of its own, he replied, “We’re focusing on implementing video games, high-end drama and animation tax breaks. We don’t want to introduce them just for the sake of it, we want to introduce them to ensure that we have a competitive investment environment for these very important industries.”
Labour deputy leader Harriet Harman said at the beginning of July that the Government needs to reward investment in the music industry as it does in film and video games, expressing interest in the BPI’s idea of corporation tax breaks for A&R investment and R&D.
Vaizey said, however, “I’m not aware of music industry tax breaks that exist around the world. I’d be happy to see why [Harman] thinks that’s necessary when they don’t exist in other jurisdictions.
Minister for Culture, Communication and the Creative Industies Ed Vaizey
“We’re great supporters of the British music industry, we do a lot of work with IP protection, which is a big issue. In that sense we’re strong supporters of one of our most successful industries.”