Weakening of copyright system could risk 1.6 billion annual investment in new content

11th March 2011

Any weakening of the copyright system could reduce the incentive for investment in arts and
literature, says the Copyright Licensing Agency (CLA).

A report, conducted for the CLA by PwC, into the economic impact of copyright in the UK
has shown that £4.3 billion is estimated to have been invested in new content in the UK in
2007, of which £1.6 billion was invested in arts and literature.

The report shows that the current copyright system underpins substantial economic growth
and innovation across the UK economy and that income received from copyright licensing
plays a significant role in incentivising investment in the development of new creative

Around 770,000 original content creators in the UK would be affected by any changes,
including authors, artists, and software developers.

The PwC report has been used to inform the CLA’s response to an independent review, led
by Professor Ian Hargreaves and commissioned by Government, into reforming intellectual
property and growth.

CLA Chief Executive, Kevin Fitzgerald said:
“Changing the IP regulations to benefit companies that reproduce content, such as Google,
at the expense of people that create content, is likely to stifle economic growth and
innovation. It’s a case of robbing Peter to pay Paul and it’s a very risky experiment with a
creative sector which is worth around 8% our GDP – roughly the same size as the financial
services sector. PwC’s report provides evidence that the present copyright system does
drive innovation in the UK. In fact, with piracy being one of the biggest threats, we should
focus energy on enforcement of the existing laws rather than introducing new ones.”

Toby Faber, author and publisher, said:
“Copyright is the lifeblood of our creative industries, which are vital to the British economy.
We need to encourage people to create and innovate, and to reward them when they do,
rather than enable anyone - from pirates to content aggregators - to hitch a free ride on the
efforts of others.”

The report includes a salutary example for the UK Government in a case that the Australian
Government got wrong when they provided a broad copyright exception for digital copying in
libraries before industry had developed a functioning licensing market. The government’s
move stifled the Australian digital publishing industry as incentives to invest were weakened.
A recent study has concluded that the Australian economy would benefit from between
AUS$45 million to AUS$63 million a year by 2012 if this exception was scrapped.

Key findings from the report included information on the scale of the “copyright” economy in
the UK:
• 770,000 people are engaged in occupations where they generate new original content.
• Content creators invested £4.3 billion in new content in 2007. Of this, £850 million was
invested in literature and £720 million was invested in artistic works.
• The creative industries provide 2.3 million jobs and the UK has the largest core and
dependent copyright sector in Europe, at 8.4% of GDP.

A copy of the full report can be downloaded here.

Media contact: to arrange an interview please contact Nicola Green, Midas PR,, 020 7361 7860

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