European Commission Consultation 2014 Artist

You are an artist or professional or amateur innovator

Digital technologies and the Internet have enabled a greater number of individuals to create new forms of art and to innovate, while at the same time to increase the size of the public they can reach. Copyright legislation in its current form, has for too long confronted innovators and the public. It should be enforced and guaranteed in relation with cultural industries as they are today, taking into account that alternative forms of financing, which are compatible with online sharing, already exist.

Back to the previous page

To prepare your response, we recommend that you read the following proposals:

6. Resource pooling: new financing sources adapted to digital culture and its many contributors and projects

The increase in the number of creative individuals, observed at every competence or quality level, raises unprecedented challenges for the sustainability of creative activities. Attention or reception time can not grow at a similar pace: only demographic growth and the liberation of time for individuals can contribute to its growth, while other factors (media diversification, investment in producing works) may reduce it. Mechanically, the average compound attention time for a work will progressively decrease, until a new balance is reached between production and reception. Such a situation will impact the financial resources that can be collected by various channels and their respective share in the remuneration or financing of creative activities. These transformations occur in a context where the appreciation of creative and expressive activites is stronger than ever, as a consequence of a growing involvement of individuals in them. The willingness of a great number of citizens to contribute to their sustainability is certain However, this willingness is accompanied with an at least as strong rejection of the capture of income by distributors, pure financial investors or organizations without added-value for the contemporary creative endeavours. Sources of remuneration or financing that limit individual use, put in place surveillance mechanisms or install transaction costs in the path of use are even more rejected.

Which sources can we use to ensure that the growth of digital culture will be sustainable in the context descrived above? The following table outilines the potential and drawbacks of various mechanisms, with an indication of how they can or not extend to a greater diversity of contributors and works, and how much that can serve to identify and promote interesting works.

Source	Probable evolution of share	Examples and degree of distribution diversity
Public employment (salary and statutes)	↓ or =, cf. point 13	wide distribution
Public subsidies	↓ or =, cf. point 13	diversity variable according to policy
Parafiscal resources with curated management	↓ or =	ex: film funds in France, tax shelter or credit, part of home copying fees used for support to creative activities, limited diversity
TV production obligations (France)	↓	limited diversity
Sales and rental of contents to end-consumers	↓ or =	variable diversity depending on market organization, cf. point 8
Intermediation services financed by advertising	↑ or =	search engines, social networks, concentrated on large audiences
Cultural mediation	?	Limited resources but essential to quality detection in a universe without upfront filters
Commercial licensing	=	limited but extensible diversity
Human services	↑	ex : art teaching, concerts, theater viewings, conferences, etc. Wide diversity for teaching, dependant on market organization for theater viewings and concerts, cf. point 8
Voluntary resource pooling	↑	cooperatives, participative financing, support subscriptions : real diversity but limited by capabilities of platforms to attract donors
Society-wide statutory resource pooling	= or ↑	creative contribution, basic income, wide possible diversity, uncertainty on existence of the schemes

Some statutes of public employment such such as teaching and research positions play a major role in the existence of a diverse culture, including for digital culture. Both their numbers and the freedom of those occupying them are threatened. Their existence merits all our attention. Beyond this, three mechanisms have the potential of significantly contributing to the sustainability of a many-to-all cultural society. Each implements a form of resource pooling, but at a completely different scale. These three schemes are: voluntary cooperative resource pooling, statutory contribution organised by law but managed by contributors and basic income allowance.

Cooperative resource pooling (artist and author cooperatives, production and publishing cooperatives, participative financing intermediaries such as kickstarter or KissKissBankBank, etc.) undergoes an exciting development. It already plays a key role to federate efforts in creative communities or to pool funds for potentially orphan projects (f.i. documentaries, investigative reporting, useful software without immediate business models, etc.). One can consider that author and artist cooperatives and related editorial and publishing structures are the natural model of development of creative communities in digital culture. It is urgent to provide them with a more favourable tax and regulatory framework. This risks nonetheless not being sufficient to collect the needed resources. Can participative financing scale up to that level? There are significant doubts on this possibility, whether one consider scenarios with many participative financing intermediaries or with a few very large ones. The doubts arise from the fact that only dominant intermediaries can attract large groups of donors, and that their project presentation surface is limited. As a result the great majority of projects are not promoted on front page or by communication mechanisms and can count only on their preestablish networks.

Resource pooling organized by law (with a statutory contribution) is of a fundamentally different nature than tax or parafiscal mechanisms with public or curated management such as public broadcasting fees, the "avances sur recettes" scheme for movie production in France, or the sums allocated to support to creative projects or festivals within the home copying fee systems. In society-wide resource pooling, all funds are allocated by contributors, either through the preferences expressed or as a funtion of voluntarily recorded usage. In the Creative Contribution scheme advocated by the author of this document and supported by various coalitions of musicians, film players, consumer unions and NGOs, the collected sums are allocated:

• to support projects (production of works, project setup) and organizations (cooperatives, cultural mediation),
• to remunerate/reward contributors to works that have been shared outside markets.

The sums are allocated in the first case on the basis of preferences expressed by contributors, in the second case on the basis of data stored by voluntary users about their non-market use in the public sphere (P2P sharing, recommendation, posting on blogs, etc.). The flat-rate contribution is of the order of €5 per month per household in developed countries. This limited sum (at most 4% of the cultural consumption of households) of course means that the scheme does not aim at replacing the other resources listed above. The aim is to provide an additional resource, specifically adapted to digital culture and its great number of contributors.

This limitation has led other proponents to defend a scheme whose motivations go well beyond cultural activities, but which could play a key role in their sustainability: the inconditional basic income allowance. Also called existence income or citizenship income, it would be a sum distributed without any condition to every adult in some geopolitical or citizenship area. Every person could then allocate freely one's time to work leading to additional income or to non-market activites.

The three schemes just described are three possible compromises between ease of implementation and scale of the results. They also differ by their more specialized or more generic nature. This text's author judges that the creative contribution is particularly relevant for the years to come: it can support voluntary resource pooling and prepare the ground for more general schemes. Other policy proponents have different views. Public policy has the duty to explore how it could put in place or support each of these schemes.

7. Legal requirements for fair publishing and distribution contracts

One must absolutely defend the rights of authors and other contributors to creative works against what copyright has become. Dozens of treaties, directives and laws similarly invoke authors to justifiy measures that despoil the great majority of them and restrict in parallel the rights of the public who appreciates their works. The recent French law on out-of-publication works (pending review by the Constitutional Court) is an extreme case. This law ignores and tries to prevent any form of non-market access, it centers solely on the commercial exploitation of out-of-publication works, submitting them to collective licensing managed by a collecting society dominated by publishers. Authors are left only with the possibility to opt out of the system. The public is deprived of any form of non-market access to works, which is in reality a key purpose of the law as seen by publishers, in particular when orphan works are concerned.This extreme case illustrates a much more general situation. A recent English bill goes exactly in the same direction.

One must renew urgently with the approach of Jean Zay. In the digital era, one must impose equitable terms towards authors, contributors and the public, not just for commercial publishing but also for commercial distribution. The basis for these equitable terms, to be enshrined in contract law, would be:

• A separate contract for digital publishing rights, with a limited duration corresponding to the reality of fast-changing digital technology and usage.
• In the case of a mixed edition (paper or other carrier and digital edition), the rule of a return to authors of rights as soon as one of the modalities is no longer available (with a reasonable delay after notification by the author, at most six months). It is not acceptable for the simple availability of a digital version to make possible for publishers to keep paper editions out-of-print for as long as they wish.
• Forbidding distribution platforms to impose terms that exclude the non-market distribution of works by their authors.
• Minimum royalty levels for authors and other contributors in commercial exploitation of their work, taking in account the strong reduciton of costs in digital publishing.

None of these conditions would constitute an obstacle for innovation in publishing. On the contrary, it would create a more open ground for experimentation.

9. Reform of collective management

If one follows the approaches tabled in this document, collective management will play an important role for collecting and redistributing sums originating in the commercial exploitation of works by distributors. This can not happen without a radical reform of the governance of collecting societies. The European Commission initiated a reform process recently materialized by a directive proposal with one part on cross-Europe music licensing and one part on the general governance reform of collecting societies. This proposal has some merits, in particular the imposition to allow for a separate management for various types of rights, which will permit authors to regain more power on exploitation rights and the non-market dissemination of their works. However, the governance side of the proposal is very disappointing.

The directive proposal does not solve the structural problems in the collecting societies governance that make them instruments of an unfair distribution of the collected funds:

• The existence of a censal vote system connected to elections by colleges, often separating large benefitters from small. This situation frequently leads to a coalition of publishers (or other assignees of rights), stock owners of rights and heirs of deceased artists holding the majority of votes, with authors or artists contributing to future creation having only a minority of votes. The principle of one person/one vote must apply.
• A total lack of transparency on the statistical distribution of the redistributed sums (ranked sums by decreasing order, distinguishing between sums redistributed to living artists and those distributed to assignees and heirs). This data must be of compulsory publication and auditable by representatives of authors, artists, consumers and users.
• The treatment of the "undistributed" sums due to too small amounts, to a difficulty in localizing the benefitters, or because funds were collected for works on which the society did not hold management rights. These sums are either stored or redistributed to the other members, prorata of their income, which amounts to a significant subsidy of the wealthiest by the poorer or the public. This is not compensated by the measures in favour of small recipients that have been put in place by some societies.

The Members of the European Parliament will have to amend the proposal text to ensure it achieves at least a proper treatment of the issues listed above.

13. Cultural public funding and tax reform

Among the infrastructures that make possible cultural activities, the resources of public action play a key role. They represent 30 to 50% of the financing of cultural activities depending on countries, maybe more if one accounted better for the contribution of indirect financing through statutes of teachers, researchers or similar jobs. Local government plays an increasingly important role, even though in some countries, the State continues to establish frameworks and models. The recent evolution of public financing raises serious questions. Public financing in the strict sense is at best stagnating, with a parallel multiplication of specific parafiscal fees feeding funds whose allocation is trusted to private or institutional players or expert committees.

Public financing plays a key role in making possible diffuse cultural activities through education, support to places and spaces, cultural mediation, long-lasting support to artistic networks. For all of this, resources are lacking. The parafiscal funds are often captured by instutionalized players, in a context that is not favourable to a renewal of forms and styles. This contributes to a distrust or rejection of specific cultural levies. Finally, in centralized countries such as France, the concentration of public aids on some large structures in the capital city constitute a major injustice.

Beyond the new mechanisms discussed in point 6, one needs to:

• Drop the inefficient gesticulations such as the Google tax once proposed in France, and act on the fundamental parameters of tax resources in general.
• Clarify in which domains public financing plays a key role and must be maintained or amplified.

For the first point, it is absolutely necessary to revisit the definition of the country of origin that establishes the location of tax for the profits of transnational companies (whatever is their assumed nationality). Tax on profits as well as VAT must take place in the country of consumption (acquisition of licences, distribution of advertising messages, access to an on-line service), as soon as the turnover in this country is above a threshold chosen to make sure that these provisions will not harm the international development of SMEs (for instance one or several millions euros). This approach is motivated by considerations that go well beyond the cultural domain, but it will be much more beneficial for culture than efforts to tax specific companies chosen for their nationality while trying ot protect their national equivalents.

For the second aspect, long debates will probably be necessary for outlining a new perimeter of public action, but one can already identify three domains where it is particularly relevant:

• To contribute to the basic conditions of cultural activities, in particular those conditions that enable individuals and small groups to engage into a durable exploration of creative paths without managerial constraint. The keyword is decentralization (towards local government) provided that resources are also decentralized (not just responsibility) and that the local actions are not small imitations of the central ones.
• To preserve and make available and usable the cultural heritage in all its facets. This task can and must today proceed in collaboration with the many societal projects for digitizing and making available the digital heritage. This collaboration will require the adoption of free use terms for the digitized works, including for commercial uses. Its impact will be as positive than the present public-private partnerships' is harmful: it will prevent the rampant reproprietarization of the public domain, and turn the public cultural institutions into trustees of the public domain instead of driving them towards participating into its privatization.
• To make possible for some costly projects and structures to exist, distributing them on various territories and submitting their activity to a critical debate.