Good morning. Thank you very much for inviting me to participate in this meeting. I am the Chief Executive Officer of the Conseil québécois de la musique, the CQM. Our organization is made up of professional concert musicians, that is, those who play classical, jazz, contemporary and world music, which distinguishes us from those who play popular music.
My presentation is mainly based on a document commissioned by the CQM, and written by Guillaume Sirois, an independent researcher in Montreal. We asked him to write a literature review, titled Le développement de contenus numériques dans le domaine de la musique de concert. My presentation will consist in me reading you excerpts from this document.
Of all the arts, music has probably been the one most deeply and quickly affected by the arrival of digital technologies. Right from the early 2000s, the music industry began a cycle of changes that continued through a succession of new technological innovations. Peer-to-peer file sharing, online music piracy, the arrival of legal download sites, and, finally, music streaming platforms have all, in turn, caused great turmoil in an industry that is continually striving to adapt to the many technological changes in order to maintain its production abilities and its vitality.
The digital shift has come with many promises over the years. We were told, for instance, that it would cut out the middleman from the production and distribution chain, and establish a direct link between creators and their fans. Others believed that we would witness a kind of golden age for revenue from stage performances, and that, in terms of sales, these performances would replace sound recordings as industry drivers. From this perspective, sound recordings would be reduced to a type of loss leader to boost concert ticket sales. For the majority of artists in the music industry, all of these promises made by the digital revolutionaries have fallen flat. A number of these artists still struggle to convert digital opportunities into significant revenue.
All of these problems of introducing digital technologies into the world of music are largely studied from the perspective of popular music. However, a certain number of specific problems arise in the field of concert music.
As the voice for this field, the Conseil québécois de la musique is particularly concerned with all of these problems, because they directly affect all of our members.
Though musicians view enforcing copyright and collecting royalties as key issues in the digital era, they are also deeply affected by the digital revolution in terms of their ability to produce, distribute and promote their music. Therefore, throughout the creative process, creators have seen a change in how they are compensated.
The impacts of these technologies on music consumption habits are changing rapidly, as new options become available to consumers. Sound recording sales are going down, streaming revenue is going up, but musicians are getting hardly any of it, and concert ticket sales revenue is not compensating for lost music sales revenue. The market is highly globalized, with music travelling quickly between America and Europe, and increasingly towards Asia, where the demand for cultural products is soaring.
The new music platforms are almost exclusively developed for popular music, and are sometimes ill-adapted to the realities of classical music. A good example of this is how hard it is to correctly identify the composers, performers and various elements of any given classical music recording. Also, it is hard for these systems to appropriately process pieces with a number of movements—generally recorded on different tracks—specifically when they create playlists, suggested or otherwise. It is hard to correctly catalogue composers and performers, as their names are sometimes spelled differently from one recording to the next. Furthermore, there is insufficient knowledge of classical music's different genres, eras and currents; the platforms process it as one homogenous whole.
I'll add that the remuneration models of these streaming websites, generally speaking, put classical musicians at a disadvantage. These sites generally pay artists a minuscule fixed sum, fractions of a penny, every time a piece is played. The model is based on the number of plays of the same piece, which can generate revenue for musicians in the long run. However, since classical pieces are, on average, much longer than pop songs, the same listening time can generate very different revenue depending on what kind of music is played.
Following this logic, a classical music fan and a popular music fan, both spending an hour listening to their favourite music on one of these sites, would generate different royalties. The first, having listened to a more limited number of pieces, would generate fewer royalty payments, whereas the second, having had the time to consume a larger number of pieces, would generate a higher number of royalty payments.
Furthermore, since classical music audiences are still far smaller than popular music ones, streaming platforms only generate very little revenue with classical music, for now. Ironically, it often takes more musicians to create these pieces.
In this type of market where revenue is generally going down, it becomes harder and harder to finance content production of concert music. Yet, musicians and orchestras are increasingly feeling the need to have their performances heard online, because it is becoming an essential aspect of any form of career progression in this field.
With this in mind, Radio-Canada's decision, taken three years ago, to significantly cut back on the number of concerts it records has only added to the challenges faced by Quebec musicians in producing quality digital content and promoting it to audiences interested in this type of production.
The development of affordable digital technologies that provide increasingly higher quality recordings has somewhat democratized the production of digital concert music content. However, a number of artists also point out that the explosion of digital technologies in the arts has caused certain difficulties for them, specifically in terms of identifying the technologies that meet their needs, and the opportunities these tools provide.
Nevertheless, artists who wish to produce content for the digital world now have a range of possibilities. They can go with the traditional model, where record labels take charge of every step of the production and marketing process, but, more and more of them are now choosing self-production instead, and are even signing risk-sharing contracts with production companies.
This reconfiguration of the production and distribution chain for digital content also raises some important questions about state funding for these types of activities. Until now, all state funding for producing content went directly to the producers, who were the only ones able to provide this service. However, what do we do now that production has become much less centralized, and can be done by many different people? Given that traditional producers are losing ground, that artists now feel more pressure to be their own producers, that a higher number of artists are now doing just that, do we not need to review how state funding is channelled to support this industry?
For concert musicians, producing digital content goes hand in hand with broadcasting and distributing it.
We need to take into account the culture of free access that dominates the digital content market. It is increasingly harder to develop business models that require consumers to pay for cultural content. This is particularly true with emerging art forms. Hugely famous artists and producers can easily count on consumers to pay a certain amount to access their content, given that they know how popular it is. However, emerging artists have no reputation to fall back on, so it's harder for them to profit from their content.
This whole discussion on how the digital world provides vast opportunities for visibility largely rests on the link between digital content distribution and concert attendance. Marketing experts call this “fan-based marketing”. Truth be told, this magic formula has only yielded results for a handful of musicians; it remains out of reach for most of them.
On the topic of discoverability, concert musicians face a sizeable challenge: How do we ensure that audio and video files uploaded by Quebec musicians become discoverable by their audiences, knowing that these files have now entered a competitive space, featuring not only the local scene, but musicians and orchestras from all around the world? In a field like classical music, which is largely based on a common repertoire, how can Quebec musicians distinguish themselves in the digital world, which probably already features a number of versions of the same piece they offer their fans?
This issue is even more concerning for concert musicians, because, like in most of the arts, the role experts play in recommending cultural products is dwindling away.
In closing, it seems that, nowadays, releasing simple audio files with musical performances is increasingly inadequate to meet consumers' high expectations. They increasingly want an added value: something that allows them to see, experience and understand the music. That appetite leads to an explosion of digital products, which can be expensive to produce, and provide little returns: event footage, educational and utility apps, virtual reality, sound installations, and so on.
Here are the main, possible solutions that have emerged from our investigation.
The first is about production funding. We need a reform on how public funding is distributed, in order to better reflect the production costs and the costs associated with current production structures. Then, Internet service providers must be required to contribute to production funds for cultural digital content. We suggest putting a culture tax on devices that play digital content, as well as reforming the music industry's taxation to include tax credits, like those offered in the film industry.
We recommend having a copyright reform on royalty payments, and introducing a uniform system of data collection that would allow people to identify right holders.
Furthermore, we need education on copyrights. We need to inform musicians of their rights and responsibilities, and raise public awareness about the repercussions their online actions have on the arts and culture, and about responsible consumption in this sector.
Lastly, we need promotion initiatives to spread awareness for content available on the large, international platforms.
That was an excellent presentation, by the way. Thank you, Mr. Trudel.
My name is Graham Henderson, and I'm the President and CEO of Music Canada, and we're passionate advocates for those who create music and for the music itself.
I'm very pleased to see the heritage committee studying remuneration models for artists in creative industries. This is an aspect of the music industry system that I, and Music Canada, have for years been working to modernize. Creating a functioning marketplace, where creators receive fair compensation for the use of their works, forms the bedrock of our mission.
However, the reality for Canadian creators is that there are provisions in our own Copyright Act that prevent them from receiving fair market value for their work. I believe the best way this committee can assist in creating that marketplace, one that is transparent and supports Canadian creators, is by providing the government with straightforward and accessible solutions to address what we call the “value gap”. Music Canada has produced a comprehensive report on the value gap in Canada, which you will find in French and English in front of you. It's one-of-a-kind in the world, in fact. There's a tear-away sheet on the front that defines the value gap for you as the “significant disparity between the value of creative content that is accessed and enjoyed by consumers, and the revenues that are returned to the people and businesses who create it”.
Today, more music is consumed than at any time in history. However, the remuneration for that content has not kept pace with the record levels of consumption. I was pleased to hear recognize this point earlier in the year when she stated, “The benefits of the digital economy have not been shared equally. Too many creators, journalists, artists have been left behind...”.
The origins of the value gap extend back more than two decades to a time when countries around the world, including Canada, began adapting and interpreting laws created in another era to protect common carrier telephone companies in the then-dawning digital marketplace. Around the world, those laws understood the Internet as a series of “dumb”—and that's the term that was used—pipes where your browsing habits were anonymous and the data travelling between sites was so vast it was unknowable. Twenty years later, we know that the Internet is composed of the smartest pipes humankind has ever made. Your web habits are meticulously tracked and metadata that it generates is collected, analyzed, and sold every second of the day.
While well-intentioned when they were created, the impact of these laws today is that wealth has been diverted from creators into the pockets of massive digital entities, intermediaries. What little is left over for creators is concentrated into fewer and fewer hands. As a result, the creative middle class is disappearing, if it hasn't disappeared already, and with it numerous jobs and opportunities.
There's no need to point fingers. No one planned for the creative middle class to suffer. The important thing at this juncture is to move forward purposefully and without delay to get the rules right. You should make absolutely certain that Canada's Copyright Act ensures the creator's rights to be fairly remunerated when their work is commercialized by others.
The foundation of the value gap is outdated safe-harbour policies and exceptions all around the world. A safe harbour, by the way, is a way to limit the liability of an intermediary and allow music to be consumed without payment. I know that and are working on this issue and having conversations with their counterparts around the world to find a solution. Here in Canada there are particular laws that exacerbate the value gap by effectively requiring—and think about this—creators, individual creators, to subsidize billion-dollar commercial technology companies.
Here are four steps that this committee could recommend immediately that would help creators immediately and would harmonize Canadian policy with international standards.
First, remove the $1.25-million radio royalty exemption. Since 1997, commercial radio stations have been exempted from paying royalties on their first $1.25 million in advertising revenue. It amounts to an $8-million annual cross-subsidy paid by artists and their recording industry partners to large, vertically integrated, and highly profitable media companies. Internationally, no other country has a similar subsidy. The exemption does not apply for songwriter and publisher royalties, meaning that performers and record labels are the only rights holders whose royalties are used to subsidize the commercial radio industry. This is unjustifiable and it should be eliminated.
Second, amend the definition of sound recording in the Copyright Act. The current definition of sound recording excludes performers and record labels—here we go again—from receiving royalties for the use of their work in television and film soundtracks. This exception is unique to television and film soundtracks, and does not apply to composers, songwriters, or music publishers. It is inequitable and unjustified, particularly in light of the profound role music plays in soundtracks. It is costly to artists and record labels, who continue to subsidize those who exploit their recordings to the tune of $55 million a year.
Third, amend the term of copyright for musical works. The term of copyright protection in Canada for the authors of musical works is out of line with international copyright norms. Under the Copyright Act, protection for musical work subsists for the duration of the author's life, plus a further 50 years. By contrast, the majority of Canada's largest trading partners recognize longer copyright terms, and the general standard of life plus 70 has emerged. I note that the vice-chair of this committee, Mr. Van Loan, introduced a private member's bill on this issue, and we thank you for that.
Fourth, renew support for music creators. Various decisions have limited the private copying levy, originally intended to be technologically neutral, to media that are effectively obsolete. This important source of earned income for over 100,000 music creators is now in jeopardy unless the regime is updated. Music creators are asking for the creation of an interim four-year fund of $40 million per year. This will ensure that music creators continue to receive fair compensation for private copies made until a permanent, long-term solution can be enacted.
Each of these changes removes an unfair subsidy, harmonizes the laws within our industries, and brings us to international standards. They can be enacted today.
As the creative community anxiously awaits this review of the Copyright Act, an organization called Focus on Creators sent a letter that has now been signed by more than 3,650 Canadian creators. In that letter, creators discussed their concerns with the value gap and how it is causing middle-class artists to disappear in Canada. The creators' letter concludes with a message that I hope you will take to heart: “We know you understand the cultural significance of our work; we hope you also see its value and crucial place in Canada's economy. We ask that you put creators at the heart of future policy.”
Finding parking was the biggest challenge of all.
Voices: Oh, oh!
Mr. Andrew Morrison: The little country boy from Nunavut. I come from Iqaluit, where we can park wherever we want. It's a bit of a different context.
I'm a bit out of my element today. I'm an artist first and foremost. We're from Iqaluit, Nunavut, so we're in a unique position within the music industry in Canada. As artists, we're not.... I want to agree with everything Graham just said. I'll steal his notes and read them again.
We sing in Inuktitut. That's part of what we do as The Jerry Cans. It's part of a very important music trend in Canada, the indigenous music scene and what's happening there. I have a lot of things to say about the music industry, but in terms of copyright, I think it's very important to understand the relationship between copyright law and indigenous music forms. It is a unique situation that should be acknowledged within any new legislation that comes out.
We incorporate throat singing, and we are very wary because throat singing is now becoming an internationally known art form, with Tanya Tagaq and her collaborations with The Jerry Cans and a few other artists. We wonder how that throat singing could be used and how traditional art forms should be protected and be ensured compensation when they're performed on international scales. That's what I wanted to bring in my presentation; it's not much more than that.
I also think that as artists, we struggle because of what's happening in the music industry right now. Our music production—the songs we make and songs that we produce—is such a small part of our income generation now, and we don't necessarily see.... I think that's because of what's happening in the copyright world. We're losing so much control and power over our own music and creative forms.
We're very confused about what to do about it, because we feel a bit powerless about where our money's coming from. We perform to make money. A new song that we create is more of a business card than any form of making a hit single or anything like that, so I am hopeful that we can figure out a way.
We've toured with some international artists who see Canada as a very special place. They think the support for music in this country is very strong, and I think we need to keep it that way. I also think we need to figure out how to more properly compensate artists for their music specifically, because touring is tiring—as you can see. I played a show until midnight last night. I do think it's important to present the artist's perspective. We sometimes get lost in the conversations, because these things are quite complex, and we struggle to understand the world of copyright.
I think there's a lot to be done. Also, when Graham was talking about middle-class artists, I was like, “I want to be one of those” because of the situation we find ourselves in. If we pie-chart out our revenue, what comes from copyright is so little now. I'm a young artist, and the older generation is telling me about the glory days of getting royalty cheques. I say, “Sweet. What's that? I'll buy you a coffee with mine.”
I do think there's potential to figure it out. I don't know about these specific situations, but I think it's important to hear from artists and realize that the way we think about copyright is changing a lot. We don't necessarily see releasing a song as a way to pay for the rent or whatever. I also want to reiterate that it's important to acknowledge the importance of understanding how indigenous art forms fit into copyright law in Canada. I'll leave it at that.
Coming from Nunavut, it's especially difficult because it's so expensive up north, but I think it's one of the most important music trends in Canada right now. Figuring out how to support that properly is something I'll leave up to you.
Thank you. Qujannamiik.
Come visit us in Nunavut.
Thank you, Madam Chair.
Good morning, everyone.
I would like to thank all the witnesses.
Mr. Henderson, I think that your presentation today was probably the best you have ever made. It is paramount to get a clear picture of what's going on with copyrights. We must also keep in mind that other major reviews are coming up. I am specifically thinking of the reform of the Broadcasting Act.
However, we're talking about authors' remuneration here, and we need to remember this. We can discuss topics such as the visibility of our culture in the context of these technological changes and everything related to that, but we are actually talking about our authors' and our artists' remuneration.
Mr. Morrison, from The Jerry Cans, I first have to say that I find you extremely refreshing. It's wonderful to realize that you've come from so far away. Yesterday evening, you were on stage, playing a show, and you're here this morning. Thank you so much. I must admit that I find it odd to hear you say that you have no idea what we're talking about when it comes to user rights for recorded artworks. I also see people here from the Association québécoise de l'industrie du disque, du spectacle et de la vidéo, the ADISQ, and from the Quebec Collective Society for the Rights of Makers of Sound and Video Recordings, the SOPROQ.
I think that Mr. Henderson said it right: We have earned our living as creators, and I can confirm this as someone who was in the music scene. That's how we did it: by creating. It is marvellously refreshing to hear from you, Mr. Morrison, and I think that it is very important to remember that we work for people like you.
Mr. Morrison, can you briefly tell us what you're referring to when you say that this reform is particularly important for indigenous art forms?
Members of the committee, thank you for the invitation.
My name is Lyette Bouchard and I am the Chair of the Canadian Private Copying Collective (CPCC). As you said, Madam Chair, I am here with Lisa Freeman, who is the Executive Director.
In 1997, the Copyright Act was amended to allow Canadians to copy sound recordings on audio recording media for their private use. At the same time, the private copying levy was set up so that creators would receive remuneration for the use of their music. That was the private copying.
In compliance with the act, manufacturers and importers of blank audio recording media pay a small levy for any imports or sales of such media in Canada. Those levies are collected by CPCC for its member companies, which represent performers, songwriters, music publishers and record companies.
For many years, the private copying levy was a major source of revenue, generating over $300 million in revenue for 100,000 music creators, which, of course, helped them continue to create and market important cultural content.
Initially, the act was drafted to make the private copying regime technologically neutral. However, decisions by the Federal Court of Appeal and the previous federal government have restricted the regime to media that are quickly becoming obsolete. I'm talking, of course, about blank CD copies.
Since most consumers currently make copies of music on devices such as smartphones or tablets, the use of blank CDs to copy music is rapidly decreasing. As a result, revenues for music creators related to private copying are also in free fall.
Annual revenue from the private copying levy has decreased by 89%, from a peak of $38 million in 2004 to less than $3 million in royalties in 2016.
In 2015-16, Canadians copied more than 2 billion music tracks, more than double the copies made in 2004. However, right now, rights holders receive no compensation for most of those copies, including the hundreds of millions of unauthorized copies made on devices such as smartphones.
What would be the situation if Canada had followed the European example in 2012 when the act was last revised and made the system technologically neutral so that a levy would apply to smartphones and tablets? According to sales data for those devices, a royalty of $3, which is the European average, would generate $40 million per year for rights holders. Between 2012 and 2017 alone, the music industry lost $240 million.
It is urgent that we act.
The CPCC recommends that the government make the system technologically neutral to keep pace with the way Canadians consume music.
The solution is to amend the act so that the regime applies to both audio recording media and devices such as smartphones or tablets.
The CPCC is also proposing other very minor amendments to the act. In a sense, it is sufficient to clarify that the regime applies only to copies made from a sound recording in a person's possession. However, we want there to be no confusion: offering or obtaining music illegally, whether through an unauthorized online service, online stream ripping or even stealing an album from a store, remains illegal. Of course, stealing is an illegal act.
It must also be clear that the private copying regime must neither undermine legal online music services, nor legalize illegal services.
Whenever possible, rights holders licence the fruits of their labour for those who wish to use them. The private copying regime is only intended to compensate copies that cannot be controlled.
We need a permanent legislative solution, but in the meantime it is essential that a $40 million interim fund be put in place, as Mr. Henderson pointed out earlier.
Ms. Freeman, it's your turn.
I wanted to focus again on the very good reasons to fix the private copying regime. Just as Music Canada had four points to make, I can give you three categories of good reasons to fix the private copying regime.
First, it remains the best solution to what is an ongoing problem. Streaming may dominate the legal music market, but Canadians still value and make copies of music, over two billion per year since 2010. It has been quite consistent. The levy system is the best mechanism to compensate rights holders for copies that can't be licensed, which remains the bulk of those copies. It just needs to be amended so that it can keep up with how Canadians consume music in a changing marketplace, now and in the future.
With minimal revisions, the private copying regime can be restored to what it was originally intended to be, a flexible, technologically neutral system that monetizes private copying that cannot be controlled by rights holders without undermining legitimate online music services.
The process for setting levies would remain the same, as the CPCC would be required to file a proposed tariff with the Copyright Board and to prove through empirical evidence which devices and media are ordinarily used to copy music.
As it stands now, Canada is an international outlier. Most countries in the EU and some countries in Africa and Asia, about 40 strong regimes around the world, embraced the technological shift years ago and now have healthy private copying regimes that extend levies to a wide variety of media and devices like smart phones and tablets. In Europe, that includes Austria, Belgium, Croatia, France, Germany, Hungary, Italy, the Netherlands, Portugal, and Switzerland.
A comprehensive global study of private copying produced in December of last year by CISAC, which is an international organization of authors' societies, called out Canada in particular on the need for our regime to be “updated and adapted to new uses with levies on digital devices”. That is the first set of reasons.
The second set of reasons revolves around the question of fairness. In the past two decades, the private copying levy has answered an important need for both rights holders and consumers of music in Canada, allowing both for fair compensation to rights holders and for consumers to benefit from knowing their copies are legal. Without a legislative solution like the one the CPCC now proposes, Canadians' private copying activity will remain illegal, and royalties to music creators to compensate them for the massive private copying of their work will very soon be completely eliminated.
Canadian music creators need to be paid for this extensive use of their work, just as the businesses producing and selling the devices used to copy music all get paid. The private copying levy is not a tax, nor is it charity or a subsidy program. It is earned income.
The Copyright Board ultimately determines the value of the levy. However, CPCC's proposed levies will certainly be a small fraction of the cost of a smart phone or tablet, and will be comparable to the levy rates in most European countries where the average levy payable on a smart phone is around three dollars, the price of a cup of coffee.
As always, the levy would be payable by manufacturers and importers of the media and devices. In fact, we all know that the cost of many smart phones and tablets is already subsidized for consumers by the intermediary companies that provide the devices in a bundle with mobile network services.
The third and last category of good reasons for fixing the private copying regime I want to leave you with is the urgency around it. We can't begin to stress how urgent this matter is. As you have heard just now from Music Canada, at the same time as music creators have been losing revenue from the private copying regime, their income from many other sources has also been in decline, in part due to additional exceptions to copyright introduced in the 2012 revisions to the act.
The individual Canadian artists and Canadian businesses whose music is copied for personal use can only produce and compete on the international stage if they are paid when their work is used.
We urge the government to immediately follow this parliamentary review with the introduction of legislation so that the necessary minor amendments to the act can be made as soon as possible.
Thank you very much for your time. We look forward to your questions.
On behalf of the musicians of this country, thank you very much for the invitation to be here. I appreciate it very much.
Much of what I will be saying was already said quite eloquently by Graham Henderson of Music Canada. It will be a repeat simply because most of what the Canadian Federation of Musicians does focuses on contract law on behalf of its members. We are not involved in the collection of copyright, per se. However, because of the direct impact on our members, this is of extreme importance to us.
Many recording artists and professional musicians have captivated international markets and left their mark at the top of the charts. We have much to offer the world, because we are a society that values creativity and innovation. Our government must ensure that its policies and regulations reflect the value we have for our creative community and the arts. This consultation should lay the foundation for the regulatory and policy tools and for the financial support needed to ensure that Canadian professional musicians thrive in the digital environment now and in the years ahead.
Our first recommendation—again, following on Music Canada's recommendation—is to amend the definition of “sound recording”. The current definition of sound recording in the Copyright Act needs to be amended so that performers can collect royalties when their recorded performances of music on soundtracks of audiovisual works, such as TV programs and movies, are broadcast or streamed on the Internet and when they are presented in movie theatres. To this end, we recommend the ratification of the Beijing treaty to ensure that this works properly.
Our second recommendation is to remove the $1.25 million royalty exemption for commercial broadcasters. Amending the Copyright Act to remove this unnecessary exemption for commercial radio would add millions of dollars' worth of royalties for recording artists. One issue that was not brought up earlier was the fact that the $1.25 million exemption was originally only supposed to be to mom-and-pop stations that had $1.25 million or less in revenue. Suddenly it appeared that it was now the first $1.25 million exemption on all broadcasters. It was not set up right from the get-go.
The third recommendation is to expand private copying to include new copying technology. As we heard eloquently from the collective, we should undertake the necessary legislative changes to update the private copying regime to reflect advances in digital copying technology.
We also recommend some reform of the Copyright Board to its operations and practices. I have that covered under a separate submission.
With regard to reducing privacy in the digital world, our cultural policies and laws must offer a practical response to piracy that better aligns how Canadians consume content and helps Canadian professional musicians and their content creators succeed in a digital global market. There are all kinds of technology out there. There are algorithms that can track the use of any song anywhere in the world. The fact that we have not utilized such technology and properly monetized the recordings for our musicians is just wrong.
Our last recommendation is with regard to Canadian content regulations. We urge the government to work with the music community to transition content quotas and the MAPL designation from an analog to a digital world. First we must regulate streaming, which will soon be a $70-billion worldwide industry, and those that produce in Canada, such as Netflix, should be subject to the collective bargaining process, such as Status of the Artist.
Thank you very much. I await your questions.
My name is Jean-Pierre Caissie. I am member of the board of directors of the Alliance nationale de l’industrie musicale, or ANIM. I am also the assistant director of the Association acadienne des artistes professionels du Nouveau-Brunswick.
It is important for artists and creators to be able to make a living from their art in Canada. The same goes for artists in the francophone and Acadian communities in minority situations in Canada. Mélanie Joly, the , is quite right to say that Canada is creative. The time has now come to support that creativity. According to Hill Strategies, a company that analyzes the data in the Labour Force Survey, the number of artists increased by 56% between 1989 and 2013. There are therefore more and more artists in Canada, including in French-Canadian communities.
These artists have access to many production tools that were not available to their predecessors. These include home recording studios, online distribution platforms, and a public that can discover their work remotely in the same way. Artists have many possibilities. Being an artist often requires investing time in related occupations such as management and communication. The number of hours spent creating is decreasing and being replaced by the management side of the career.
Let us recall that, according to the National Household Survey, the average annual income of musicians and singers was $22,770 in Canada in 2010. In New Brunswick, the average annual income of an artist is $17,562. That, by the way, is below the poverty level.
In order to be completely supported in their career development, artists need increased support from specific areas of expertise: management, recording companies, scheduling and assistance with touring, both nationally and internationally. Support, training, qualified labour, and networking opportunities are the needs identified in the Étude sur le développement des artistes et des entreprises de l'industrie de la musique au sein des communautés francophones en situation minoritaire, published in 2017, of which we will send you a copy. They are the indispensable aspects in the career development of a musical artist.
To deal more directly with the question that interests us today, remuneration models for artists and creators, we, like several of our colleagues, would like to talk about streaming. Before we address that issue, we must emphasize the importance of the royalties paid to authors and composers as a result of radio broadcasts. The royalties paid to the artists are critical for their financial health. In addition, when there are royalties, it means that the songs are being played on the radio and becoming known to a wider audience. The 2017 Communications Monitoring Report, published by the Canadian Radio-Television and Telecommunications Commission, or CRTC, reminded us of the importance of radio in the daily life of Canadians. It pointed out, in fact, that 91% of francophones listen to traditional radio. It is therefore important to maintain and even to improve the royalties paid to artists when their works are played on the radio.
With online streaming, the rates paid to the artists are significantly lower. The Copyright Board of Canada determined a rate of 0.012 ¢ per play. In the United States, the rate is about 25 times greater. We are encouraged by the fact that the government has asked the board to conduct a study. We believe that improvements are possible and we stand in support of the Coalition pour une politique musicale canadienne, which is asking the board to make decisions more quickly and for the decisions to be more in tune with rates elsewhere in the world.
In the context of streaming, the challenge of discoverability is often mentioned. This is much like finding a needle in a haystack, you may say. Maybe, but by using keywords and by understanding the algorithms better, you can hope for a greater number of plays on the platforms. Of course, we would like to be on the playlists of ministers, even the Prime Minister, but space there is limited. In reality, much of the promotional work really has to be done elsewhere, including by giving concerts and getting media coverage in local papers and on community radio. Online media do not exist in a closed world that is separated from real life. Hence the importance for musicians to use the assistance of those in the community who are doing the management and communications work, in order to do the additional tasks related to the Internet and to all the existing platforms.
For your information, I would like you to know that some Acadian artists are currently considering taking their songs off the streaming services that do not provide reasonable rates. That is sad, you may say. It runs counter to the government's wishes, as expressed in the cultural policy entitled Creative Canada, which encourages the distribution of Canadian works online. Copyright holders still have, and always will have, the right to refuse to allow their works to be used. Actually, artists in the francophone and Acadian communities want to be in cyberspace, especially on distribution platforms, but they do not want to give the impression that they are paying to develop them. Without songs, there are no streaming services.
The same goes for YouTube, which pays creators ridiculously low royalties. Remuneration categories are established according to the number of views, as you know. It is a proportional curve, which works to the disadvantage of those whose works are viewed less. It is a little as if radio paid a lower rate to artists whose works were played on the radio less often.
Fairness is important for us. Why is the YouTube platform not subject to the same rate as other streaming services? It operates like a radio station, especially when you consider that more than 50% of Canadians listen to music on the platform.
The private copying scheme is another way of remuneration available to creators. Their representatives here have told us that royalties are decreasing. Between 2007 and 2015, the royalties paid to artists have decreased approximately eight-fold.
In a way, the principle underlying the private copying scheme is to make sure that Canadian artists can continue to create songs, which are then used, among other things, to fill tablets and touchscreen telephones. We agree with the proposals of those representatives.
We wonder why Internet service providers, ISPs, are not subject to conditions similar to those for cable companies, which have to pay a part of their profits into independent production funds or the Canada Media Fund. These are the funds that help to finance films, broadcasts or interactive media. Why do ISPs not have the same responsibility in terms of Canadian content, so that their distribution channels can contribute to new works and distribute new songs from French-speaking Canadian artists?
We would like a new Copyright Act that would contain fewer exceptions, or, at very least, clear exceptions that would not have to be defined in court. Too many recent cases show that the exception for fair dealing in education is not clear. A number of educational institutions have found ways to use copyright-protected works in what might be classified as unfair dealing.
There are a number of legal cases. As you know, copyright management companies too often find themselves in court. We have Canadian Copyright Licensing Agency v. York University, and, coming soon, there will be Copibec v. Université Laval.
Like the Société canadienne des auteurs, compositeurs et éditeurs de musique, or SOCAN, and Ré:Sonne in music, management companies are critical for creators, both in French Canada and in the rest of Canada. If schools do not pay for the works presented in class, Canadian artists will earn even less income and will have to keep working at second or third jobs. I would not like to ask the same sacrifice from educational staff, or from other service providers in the school system.
We appreciate your work and we thank you for appreciating ours.
Thank you, Madam Chair.
Thank you all for your presentations.
Of course, the Internet does provide opportunities for visibility. As you said, an unknown becomes
somebody else, but he remains poor. He remains poor unless he has a world market access.
Dollarama stores are full of products sold at cost, but they make a small profit because the things are sold on an international scale.
There is a problem with artists whose customer base is normally made up of the people around them, the people in their communities, say, in Quebec or Acadia, because they can never be big enough to achieve a critical mass and then to become a consumer product at an international scale. It may not be the ultimate goal of every artist to conquer the planet, but we do want to earn a living from what we create. I am talking as if I were an artist, but I am not one at all. I have no artistic talent.
Ms. Bouchard, I notice that your concern with the private copy scheme is also a concern of a number of others, including the Coalition pour la culture et les médias. I do not know if we are going to have their representatives here, but they have sent us a brief that they prepared specifically for us. Actually, they sent it to the Standing Committee on Industry, Science and Technology when it was studying copyright. It talks about the importance of adapting the private copying scheme to new technologies.
I would like to ask you about that. Everyone in my generation remembers making cassettes on which we put the songs that we liked. Then the CD-R appeared. That was wonderful because all our songs fit on it. Today, that seems to have been replaced by streaming services that we have access to. However, some people still steal music. The general impression is that music does not cost a lot. It should cost more, because the artists are poorly compensated because of the agreements to which Mr. Willaert alluded. Since it is our impression that music no longer costs a lot, we wonder who is still stealing it.
Do you subscribe to the view that, with music worth less and with plenty of it legally available, this means that even people who know the subject wonder why the private copying scheme still exists?
Ms. Freeman or Ms. Bouchard, could you tell us precisely how much more it would be for an iPad costing about $700, for example. The House of Commons paid for mine, so the amount is approximate. How much would the private copying scheme add to that in order to compensate the creators for their losses?