Benito's IFPI Royalty System

Or why things are as incongruous as they are. By Rasmus Fleischer.

Get It Try It

The IFPI started 75 years ago in November 1933. They've now asked the Swedish government for a birthday present - a new law which will give them the right to demand and register Internet user data. All in their fight against file sharers.

They don't say much about their diamond jubilee. For good reason. The story of the founding of IFPI in 1933 in Italy is not a cozy one because for their first ten years their work was coloured by their cooperation with the government of the fascist dictator Benito Mussonlini.

Don't worry about skeletons in the closet - what makes the story so interesting in the light of the conflicts of today regarding digital copying is that it explains the triple construction of IP rights that have been established in the music industry.

So let's go back to 1930, a time not totally unlike our own.

The world was in a deep financial crisis and new media were putting musicians out of work. And back then the catastrophe was real. Nearly half of Sweden's professional musicians who'd played in the cinemas were suddenly out of work when sound came to Hollywood. The musicians unions throughout the western world set forth a united demand for protective laws to safeguard live music which they feared would be completely replaced by 'mechanical music' from 'loudspeakers'.

The issue was reviewed by the predecessor to the UN's ILO (International Labour Organisation). Throughout the 1930s a lot of effort was spent preparing for an international convention the purpose of which was to give the musicians unions control over the use of loudspeaker music, as for example used at cafés and restaurants, where musicians were losing work.

Even the record companies were affected by the world financial crisis. They were selling a lot fewer records than during their golden years at the end of the 1920s. They blamed this on people's ability to hear music on the radio. The recording industry united across the globe to demand protective legislation to guarantee them a flow of income from radio transmissions.

They built their international organisation IFPI - the International Federation of the Phonographic Industry - in November 1933 at a meeting in Rome. The choice of fascist Italy as a venue was not politically motivated but it wasn't a coincidence either. The rest of the world didn't think much of the idea of passing legislation to protect record companies - after all, they don't actually produce art like the musicians themselves do.

The most sceptical were the copyright holders themselves - the composers. In Sweden the composers organised STIM - Svenska Tonsättares Internationella Musikbyrå or Swedish Composers International Music Bureau - whose chairman Kurt Atterberg immediately voiced his disgust at 'the greed of the recording industry'.

But in Italy the IFPI were very favoured and they returned to Italy time and again to push through further demands. Together with the Italian Fascist Industry Association they organised a conference in Stresa in the summer of 1934 where they even invited representatives of the world's composers organisations.

This latter group continued to be cold to the greed of the record companies with the notable exception of the Italian SIAE which was rather expected: Mussonlini's corporatist principle had already in 1927 put composers, publishers, and record companies in the same organisation. Citing the meeting in Stresa the recording lobby began insisting - through amongst other things pressure on the Swedish government - that they had the full support of composers for their demands, something the Swedes and Kurt Atterberg vehemently denied.

The Swedish legal advisers who already in the 1930s began preparing what would in the end become the copyright law of 1961 needed to consider the demands of the musicians unions as well as the demands of the IFPI. But for these advisers it was self-evident the musicians' interests were more worthy of protection.

During and right after the second world war the Scandinavian countries sketched a common copyright holders law which by 1949 was in finished proposal form and which even included so called 'closely related rights'. Musicians were given the right to compensation for transmissions on the radio and for every use of 'loudspeaker' music played in public. The record companies on the other hand were only given protection against pirate copying of physical records.

If this ratio had stood then today's situation would be radically different. But the war changed the conditions on the international scene in an unexpected way. The ILO's significant preparations for a convention which would protect musicians but not record companies collapsed but the record company friendly project under the protection of Mussolini not only continued but survived Italy's defeat in the war.

After Italy was isolated internationally in the autumn of 1935 with the attack on Ethiopia a conference planned for Rome was canceled. The Italian government had hoped to get other governments to a convention where an agreement would be reached to protect the record companies - but not the musicians. All according to the wishes of the IFPI.

But work continued in the fascist country where a committee of experts was organised in 1939 to produce a proposal to bring together in a single convention protection of musicians and record companies, two traditionally conflicting interest groups.

This new construction was totally in line with the corporatist principle which permeated the entire Italian society. Of course this wasn't 'fascist' - but on the other hand the Italian fascist dictatorship undoubtedly set up guidelines for the work of the committee. For example: they would hardly have proposed a structure which gave musicians the right to organise independently through unions.

This committee survived the war and the proposal of this committee became the foundation for the Rome agreement of 1951. The balance in this agreement was the diametric opposite of what the Scandinavian countries had arrived at. According to this proposal only the record companies - and not the musicians - would be compensated for music played on the radio and in public establishments.

The musicians unions protested just as the Swedish lawmakers protested against this unreasonable construction. At the same time there was impatience with all aborted attempts to establish an international convention for these special rights.

For this reason a French compromise was ultimately accepted which stated the record companies must share their compensation with the musicians unions. This ended up in the Swedish copyright law of 1961.

A system was immediately established where radio stations would pay a yearly sum to the IFPI who would then after deducting for their own expenses send half of what remained to the musicians unions. Strangely enough no one questions why record companies are valued as highly as the musicians themselves - a principle which out of pure routine continues for Internet radio and MP3 player fees.

We've forgot how close we were to another world where musicians got all the compensation from radio transmissions and record companies had to continue to make do with profits on sales of the physical records which was proposed by both the Scandinavian committee and the UN's ILO. But an intervention by Italy changed things and a corporatist system was established whereby musicians would forever after sit in the laps of the record companies.

And now the IFPI send out a selection of artists as bait to get their birthday present - the so called private police law. Officially it's about copyright holders being able to use the law to obtain personal data on file sharers but everyone knows it's all about what the IFPI want to do for themselves.

If a musician were to go to a court with a printed screen dump it's not likely any demands would be accommodated - no matter how much one would like to send out thank you letters to those who help spread the music. A system where industries and not individuals have rights is rightfully called corporatist - in 1933 as well as in our times. Happy birthday, IFPI.

Rasmus Fleischer is a PhD candidate at the modern history institute of Södertörn University, a cofounder of the Piracy Bureau, and author of copyriot.se.