1. The Value Gap and the new EU Copyright Directive proposal Xenia Iwaszko, LLM Director of International Trade, IFPI Ciudad de México, 13 de Noviembre 2018

2. Music Industry in the Digital Age

3. 57 1,300 IFPI – representing the recording industry worldwide
Legal and trade policy
Antipiracy operations and litigation
Industry data and market analysis
Communications
Technical standards development
Work with member companies, 59 National Groups and over 75 recording industry Music Licensing Companies (MLCs) to improve protection of recorded music 57
countries with
national organisations
IFPI Offices
1,300
National Groups
Affiliated music licensing company
members worldwide

4. A portfolio business, majority digital…
Music anytime, anywhere
Revenue Mix In 2017
Digital accounts for
54%
of total revenues*
Hundreds of digital music services
Millions of venues open to the public
Thousands of TV, radio, cable and satellite broadcasters
And many other licensed business partners
($17.3bn total revenues*)
Physical
Streaming
Performance Rights
Downloads
Synchronisation
Other Digital

5. The Value Gap & ISP safe harbours
IFPI’s insight team recently looked into the impact of blocking in ten countries worldwide
Summary of findings and focus on 3 countries

6. The Value Gap
The mismatch between the value of music to certain online platforms and what they pay content owners.
Results from the lack of legal clarity allowing some platforms to claim to be mere “hosting services”
Services claiming the protection of safe harbours either refuse to enter into licence agreements, or offer “take it or leave it” terms that vastly undervalue music rights

7. The Value Gap
The mismatch between the value of music to some online platforms and what they pay content owners.

8. Share of ‘on-demand’ streaming time by method:
Services claiming the protection of safe harbours either refuse to enter into licence agreements, or offer “take it or leave it” terms that vastly undervalue the music licensed. The staggering difference between industry revenues from these services and those entering into licence agreements in the usual way illustrates the scale of the market distortion caused by the Value Gap.
UUC video streaming sites such as YouTube were responsible for more than half – 52% – of global on-demand streaming time.
YouTube alone made up 47% of on-demand streaming listening time.
This is a key data point for campaigning on the value gap. It is a strong demonstration of the importance of YouTube and can be compared to the relatively low amounts returned to artists and record companies from the site.
The distribution was similar across all region.
While paid streaming was used by slightly fewer respondents (see slides 22 and 23), it accounted for more listening time than free streaming. This is unsurprising as more committed music listeners are more likely to pay for a streaming subscription.
Source: Q17. In a typical week, how many hours do you spend listening to music in the following ways?
Base: All listening 1+hrs per week (excluding those over 70 hours) (n respondents)

9. The Value Gap in the EU
IFPI’s insight team recently looked into the impact of blocking in ten countries worldwide
Summary of findings and focus on 3 countries

10. The Value Gap in the EU
All 3 EU institutions (the EU Commission, the Council, the European Parliament) have recognised the need to address the Value Gap problem.
Ongoing “trilogue” negotiations about how to structure the solution (Art.13).
Key legal elements at play:
Definition of activities making a service an “online content sharing service provider”
Confirmation that a service falling within that definition communicates to the public
Confirmation that the hosting safe harbour does not apply to an OCSSP
Any additional obligations (e.g. preventive measures) or express exclusions?

11. Gracias! Consultas?