House of Commons Culture Sport and Media Committee issues inquiry report

April 15, 2024

The House of Commons Culture Sport and Media Select Committee has published its report into creator remuneration.

The report points out that despite although the UK creative industries are important and enjoy global success, professional creators are struggling to make a living. Many people in the sector experience precarious rates of pay, employment conditions and contractual terms. There are many short- and long-term factors, including falling real-terms funding, new technologies and the legacy of Covid-19 and associated public health measures. The Committee launched its inquiry to explore issues around fair remuneration and working conditions across the creative industries and consider possible solutions.

The Committee further says that as new means of consuming creative content have become the norm, creators across the sector have experienced persistent declines in their royalties and residuals. Royalties can provide income smoothing, financial certainty, greater career flexibility and support during retirement for those who receive them. Royalties have been depressed by digital distribution in the UK, which pays out less to creators (if at all) compared to other modes of distribution. Simultaneously, gaps in the UK copyright regime, where creators are not compensated for private copying, whereby users download, store, copy and share content on digital devices, means that payments from abroad are under threat due to a lack of reciprocity with other jurisdictions. The Committee recommends that the UK government introduce a private copying scheme to safeguard those payments from abroad and provide a new, sustainable stream of income for creators.

The Committee also considered recent policy implications regarding the impact of the development of AI, which it has previously discussed in last year’s report on Connected tech: AI and creative technology. It says that it is particularly disappointed that the government’s working group on AI and intellectual property has failed to come to an agreement between the creative industries and AI developers on creators’ consent and compensation regarding the use of their works to train AI. It calls on the government to ensure that creators have proper mechanisms to enforce their consent and receive fair compensation when their works are used by AI systems.

In addition, the report scrutinises the prevalence of freelancing within the creative industries. Freelancing has several theoretical advantages, such as allowing creators to choose projects they pursue. However, freelancing can also leave creators vulnerable to economic downturns, unable to access rights to annual leave, parental leave and sick pay and lacking other forms of employee support. More broadly, many creators experience poor working conditions, including inconsistent use of contracts and terms and conditions, uneven responses to bullying, harassment and discrimination and a lack of proper support, accounting, training and development. As a result, the Committee recommends that the government appoint a Freelancers’ Commissioner with appropriate powers and cross-departmental oversight to promote the interests of creative freelancers and address wider issues around contracts and working conditions.

Finally, the Committee has revisited its work on music streaming to review progress on its recommendations in its Economics of music streaming report. The report explores the practical implications of the government’s work to date, which has included the commissioning and publication of relevant research, formation of several working groups and recommendation for a market study by the Competition and Markets Authority. Reflecting on its current programme, the Committee urges the government to bring forward a package of reforms based on its research and revisit the membership of the recently-formed Creator Remuneration Working Group to give music makers a stronger and fairer voice in group discussions throughout the Group’s timespan. It also notes that songwriters and publishing rightsholders more broadly continue to receive pitiful returns from streaming, despite their importance to the streaming economy.  Consequently, it recommends that the government bring forward measures to provide incentives for an optimal rate for publishing rights to fairly remunerate music makers for their work.

The Government has two months to respond.