According to out-law.com, record labels would have to set up special funds to pay royalties to session musicians under copyright reforms proposed by EU Commissioner Charlie McCreevy.
The article gives an in depth analysis of what musicians can expect if the proposal actually becomes a law under EU.
The money for the funds would come from McCreevy's proposed extension of the term of copyright in performances from 50 to 95 years. McCreevy said that a percentage of record companies' increased revenues from this change should be paid into the fund to go directly to session musicians.
"I have no concern for the famous names ? although they too will benefit ? the measure is aimed at the thousands of anonymous session musicians who have contributed to much loved and listened to sound recordings," said McCreevy.
Session musicians are hired hands who, unlike members of bands, are generally paid a flat fee for a recording session and do not benefit from any publishing royalties unless they have helped to write a song. Though they are entitled to performance royalties, these tend to be far lower.
McCreevy wants extra money earned from a copyright extension on performances to be earmarked for them. He said it was to prevent the sudden withdrawal of royalty income late in a musician's life after the 50 year period has elapsed.
"This is particularly hard as it happens at a time in life when they are getting older and probably not working as much," said McCreevy. "And the music business is not the type that comes with a pension scheme."
One of the objections to the extension of performance copyright is that most recordings that are 50 years old or more have fallen into disuse and are earning performers no income. Keeping them in copyright protection prevents other people from benefiting from the recordings by, for example, using the material in new ways. It also prevents an artist releasing his own material if a record label has neglected it.
McCreevy has found a partial solution to that problem by proposing that new "use it or lose it" clauses be inserted into contracts. "This means that if the record company does not make the sound recording available on the market for a certain time, performers can get their rights back," said McCreevy. "Not only will this give performers another chance to earn money on their performances, it will also mean that more music is on offer to the public."
McCreevy has also proposed a fundamental change to the nature of the recording contracts after a 50-year period. Under normal contracts a record company will pay for recording a record, promoting it and some of the costs of a tour. They will also often pay artists an advance on royalties.
The company will recoup that investment from a performer or songwriter's royalties before any are paid to the musician. In some cases the musician never sells enough copies of a record to pay all that money back, and so never receives any royalty payments.
McCreevy said that this should change once 50 years has elapsed. "Once the extended period kicks in, the performers who have not managed to reimburse the record company for its investments in them will benefit from a 'clean slate'," he said. "In this way they will enjoy all the royalties for the extended period even if they did not ever qualify for them in the initial period."
Recent UK Government intellectual property policy has been heavily informed by the Gowers Review of intellectual property which was carried out on behalf of HM Treasury by former Financial Times editor Andrew Gowers.
He rejected the extension of copyright in sound recordings to 50 years. In face he told podcast OUT-LAW Radio that he considered reducing it to less than 50 years.
"Our conclusions were roundly criticised by the music industry in particular for actually doing the non-revolutionary thing of leaving the status quo in place, i.e. 50 years' term protection for sound recordings," he said. "I could have made a case for reducing it based on the economic arguments."
"We certainly considered it, and if you look at the report that came from the academics that we commissioned to examine the arguments and examine the evidence they also argued very robustly that 50 years could be arguably more than enough," said Gowers. "In the end we took the politically prudent course. To be honest reducing it in any case would be a very big international debate. It would stand very little chance of making headway in Europe."
McCreevy said that he was backing an extension to protect the interests of performers and the cultural life of Europe.
"Performers deserve respect for their huge contribution to European culture. They also deserve to finally accede to their just position in the hierarchy of intellectual property rights," he said. "To encourage innovation and promote respect for intellectual property ? we have to ensure that the economic benefits of creativity and entrepreneurship go to those who are innovative, creative and show entrepreneurial spirit," he said.