Department for Culture, Media and Sport Creative Industries Division 2-4 Cockspur Street London SW1Y 5DH www.culture.gov.uk 1 November 2001 Dear Mr Webley, Thank you for your email of 14th October to the Secretary of State, regarding the Government's policies towards the UK music industry. I have been asked to reply on her behalf. It appears that we did not receive your original letter/email of 10th September which you refer to. I would like to begin by saying that the Government values the enormous contribution that music makes to both the UK economy and to our cultural environment. We recognise the diversity of the music industry and are working closely with all sectors of the industry to help ensure its continuing success. We make a conscious effort not to restrict our contacts with the industry to any one sector or interest group. Your email refers to the membership of the Music Industry Forum (MIF). I should point out that the Forum is one of a number of channels of communication between the department and the music industry. It is not a formal decision-making body and has no fixed membership. Rather, it gives the Secretary of State, who chairs Forum meetings, the opportunity to hear the views of a sample cross-section of the industry on the key issues it faces. Individuals are invited to attend on a meeting-by-meeting basis, based on the expertise they can bring to the issue under discussion. As a result of discussions with the industry at various levels, including the MIF, we are concentrating our work on the following four broad areas which you refer to in your email, and which it might be helpful for me to expand on. New Technologies We recognise that this issue is of crucial importance to all sectors of the music industry. It is vital that creators and rightsholders are properly rewarded in the digital environment, and we are working with them to look at how these groups might best overcome the threat, and make the best use, of new technologies. Clearly, setting the right legal framework for creators to operate in the digital environment is central to achieving this aim, and we are working with the Patent Office (the Government Agency which leads on copyright related matters) to help ensure early implementation of the EU's Copyright Directive. We have also convened a group of experts from across the music industry to look at the impact of new technologies on the industry. The group produced the report 'Consumers Call The Tune', available from our website. Small & Medium Size Enterprises (SMEs) As our website states, the vast majority of the music industry in the UK consists of small businesses (SMEs). We recognise, for example, the importance of the independent recording sector, which generates more than £500m p.a. in retail sales alone, and represents more than 26% of the UK market share. Helping such businesses to get started and grow is, therefore, an important objective for DCMS. From discussions with the different sectors of the music industry, it is clear that access to finance for small businesses is crucial to their viability and future success. We decided, therefore, to commission a research project, carried out by Kingston University's Small Business Research Centre, to identify what funding options are available to small firms in the music industry, the difficulties faced in getting at those funding sources, and how these difficulties might best be overcome. A summary of the research, 'Banking On A Hit', was published earlier this month and is also available on our website, together with the full research report. The report makes recommendations to the music industry, finance providers and Government, and we will be looking at how best to take forward the recommendations with the relevant groups over the coming months. Creative Growth This term is intended to encompass our work with the industry aimed at encouraging creativity and the creative process, without which, of course, there would be no music industry. We are working with agencies such as the Department for Education and Skills, Youth Music, the Arts Council of England, and Metier (the National Training Organisation for the entertainment industry) on taking forward the education and training agenda. This includes seeking to raise the profile of the arts and the value of intellectual property in the National Curriculum, establishing the Creative Partnerships programme (which aims to provide a bridge between schools and cultural organisation, particularly in deprived areas, giving pupils the chance to work directly with professionals in the creative industries) and developing and promoting the New Deal for Musicians, which aims to help musicians in the broadest sense move into careers in the industry. We are also looking at ways of encouraging the provision of live music, through, for example, the Government's proposals for reform of the entertainment licensing system. Exports This final area of work is aimed at sustaining and developing the industry's performance in overseas markets. The US market is a key focus of our work, and we are working with the industry to look at ways in which our performance in the States might be improved. We are also working with other Government bodies, including Trade Partners UK (TPUK), the Foreign Office and British Council, in a number of areas, including, for example, encouraging industry attendance at overseas trade fairs and promoting anti-piracy measures in other countries. You will appreciate that this is not a comprehensive list of our policies towards the music industry, but I hope it goes at least some way in demonstrating our commitment to helping ensure the future success of all sectors of the industry. Yours sincerely Andy Thomas Music Industry Branch Creative Industries Division