Ladies and gentlemen, on behalf of the Canadian Association of Broadcasters, we want to thank you for the opportunity to appear before you today to discuss issues relating to copyright, including remuneration for content creators. These are matters which are integral to our businesses.
Local radio in our country remains a popular source for local entertainment, but it is also a critical source of news and information to Canadians from large urban centres with diverse ethnic populations, to the most rural, remote and first nation communities. It shares our stories and our music with Canadians young and old, in their cars, on their phone and online, or simply in their homes. From emergency alerting to local news in a variety of languages, radio connects communities. In fact, radio is one of the sole sources of local news and culture in rural and remote communities across Canada, many of which have already felt the sting of local newspaper and television closures.
Radio also plays a key role in maintaining the health of the Canadian music ecosystem. Not only is private radio the number one source for discovering Canadian music, it is also the number one source of funding for the development, promotion and export of Canadian musical talent. Last year alone, private radio contributed $47 million in Canadian content development funding, the majority of which was directed to the country's four largest music funding agencies: FACTOR, Musicaction, the Radio Starmaker Fund and Fonds RadioStar. These agencies provide critical support to Canadian music labels and artists to create, promote and export their music internationally and across our vast country.
We are proud of the role we have played in helping to create the vibrant and successful community of internationally successful music artists our country enjoys today.
We are also very proud of the local star systems we have created in the communities we serve which was achieved through steady investment in local broadcast talent and the content they create every day that keeps our listeners tuning in. We believe our continued investment in local talent is a key differentiator and plays a critical role in attracting local audiences in a very crowded media environment where we compete with regulated and unregulated players.
We understand the role of this committee is to review aspects of the Copyright Act that may impact remuneration to artists. In this context, we would like to emphasize that the music industry is a broad ecosystem that involves artists creating music, record labels marketing and selling the music, and radio, in its unique position, to promote the music. It is critically important that the government exercise great care before tampering with this ecosystem.
It is also critically important that a distinction be drawn between remuneration to artists and remuneration to the predominately U.S.-owned, multinational record labels that appear before you, claiming to represent artists. Indeed, it was refreshing last week to see a successful artist like Bryan Adams appear before you and speak clearly from the artist's perspective. The proposals he made to you give a voice to the distinction between artists and labels.
We believe that the Copyright Act, in its current form, strikes the very delicate balance of ensuring artists are remunerated for their work while also ensuring that local radio has a reasonable and predictable copyright regime that reflects its continued investment in local talent, communities, and musical artists.
Indeed, section 68.1 of the act provides important support for local radio stations by mandating that radio will pay neighbouring rights of $100 on the first $1.25 million in revenue and then pay a higher rate through a percentage of advertising revenue which is set by the Copyright Board of Canada. So, while the rate structure for neighbouring rights payments is subject to this special measure, as Parliament intended in 1998, the music industry still collects over $91 million in copyright payments from private radio each year.
If Parliament agrees to amend the Copyright Act by removing this exemption, the primary beneficiaries will be the multinational record labels who are proposing it. Under the existing neighbouring rights regime, payments are allocated 50/50 between performers and record labels. Where the money flows from there is unclear and worth further discussion before any amendments to the act are contemplated.
What we do know from publicly available information is that Re:Sound, the copyright collective responsible for distributing neighbouring rights payments, takes 14% off the top in administrative fees before anyone gets paid. Of the remaining amount, the music industry has carefully concealed where that money might go.
For example, in the English market, based on radio repertoire, we estimate that, of the performer's share, after administration costs are deducted, 15% goes to international performers and 28% goes to Canadian performers. Of the label's portion, no less than 41% goes to multinational record labels, with Canadian labels receiving only about 2%. What this tells you is that multinational record labels will be the primary beneficiaries of the proposed change to section 68.1 at the cost of local Canadian businesses.
The multinational record labels are also asking you to change the definition of “sound recording” in the act to extract additional royalty payments from television broadcasters. In fact, the labels are attempting to squeeze out an additional payment for the use of music from broadcasters, distributors and digital platforms in a television program that has already been paid for up front by the producers of that program. Quite simply, they are asking us to pay twice for the same product, otherwise known as double-dipping.
The current definition of “sound recording” is carefully worded to reflect the contractual realities of the audiovisual production sector. This was confirmed by the Supreme Court of Canada in a 2012 decision.
Any consideration of adding new costs on conventional television broadcasters, or on the digital sector, should be rejected as it would diminish Canadian broadcasters' ability to invest in Canadian productions by shifting more than $50 million into the hands of foreign owned corporations.
The Canadian Association of Broadcasters respectfully urges the committee to reject any proposed amendments to the Copyright Act that would harm the Canadian broadcasting sector and jeopardize the important service that local broadcasters provide to Canadians. We reiterate that the current legislation strikes the right balance between rights holders and local broadcasters, and that the proposals being advanced by the music industry risk coming at the expense of local programming and of valued and essential services we provide to Canadians.
I'm just going to list a couple of examples of my work. Hopefully, you might be familiar with some of them.
One of the shows that people know me for is a radio show. It's called Under the Influence, which is hosted by Terry O'Reilly. He's been doing that show for 13 seasons, and I'm lucky that every week when he does it, he says my name at the end, “and music by Ari Posner.” That's where most people know me from.
The irony is that I've mostly made my living from doing scoring work for television and for film. Quite a few years ago, in 2010 and 2011, I was working with a colleague in Toronto and we scored the show called Flashpoint, which was a big hit for Canada. It was a landmark show because it opened the floodgates to the U.S. for us to be able to start exporting some of our content onto the bigger networks down there. Flashpoint was a landmark show for Canada. It was also a landmark show for my career, for sure.
Currently, I'm working with the same collaborator back in Toronto on a show called Anne with an E, which is a reimagined version of Lucy Maud Montgomery's story,Anne of Green Gables. Anne with an E just premiered its second season this past Sunday on CBC. It's been given the green light for a third season already and, most pertinent to what we're here to talk about today, it's airing around the world in 190 countries on Netflix.
Some of the broadcast properties that I've been involved with over my career include CBC's The Hour
, with George Stroumboulopoulos. I wrote the music for that show, and for CBC News Now
and CBC's The National
. Seventeen years ago, when the 9/11 attacks occurred, it was my music that underscored CBC's reporting of that horrific incident.
I'd like to tell you about how screen composers uniquely locate themselves in the production ecosystem.
First, screen composers are the first owners of their copyrights. Like screenwriters, screen composers are recognized as key creative individuals, and this is a big separation for us. Our copyright policy currently splits ownership into two types of royalties for us. We get public performance royalties, and we get reproduction royalties. These music composer rights live alongside a separate bundle of the motion picture copyrights that are all embedded together into the one media property.
Once our music is married to picture, it is distributed, and it generates copy remuneration, which is derived from broadcast advertising sales that are reported by the broadcasters. Our remuneration rate is set by copyright policy, not by us. SOCAN is our agent that collects our performing and our reproduction rights internationally. That is the 20th century model of copyright for screen composers.
Further, you may ask, how is our money derived from advertising? Public performance and reproduction rights are calculated on a percentage of quarterly reported advertising sales from the broadcaster. Let's see how this is working in the 21st century.
Ari, can you tell us your story with regard to Anne with an E?
Yes. My latest story is about a film for which I wrote music, for a young Canadian upcoming film director and writer by the name of Cleo Tellier. Her film, Mishka
, which is about teen pregnancy, was posted on YouTube on April 22 of this year. Mishka
has achieved more than 20 million YouTube views since April 22. That film is generating $3,000 a month in YouTube advertising royalties for her, but under current copyright, there is no public performance or reproduction copyright afforded to me. I spoke with SOCAN about it, and they can't even indicate as to whether any level of proportionate remuneration will come back to me.
Ari and I are telling you these stories but we're also asking, like every other screen composer, what has happened to public performance and reproduction royalties in the 21st century for screen composers. Well, what we're telling you today is they've become insignificant or they don't even exist. The reason is that the money has moved to subscription.
So, what can we do? We don't want to come here and complain. We want to bring ideas. In the age-old adage of business, we're suggesting that copyright policy follow the money. Copyright remuneration policy must be augmented to include and gather money from subscription services.
We have an idea. We'd like to suggest a new subscription copyright levy. It's inspired by an existing blank media levy. We're referring to this as the SCGC copyright model. I'll explain the basic idea. There's been no econometric analysis of this; it is purely a principle, but I would like to explain how we think it could work.
It's an ISP subscription levy that would provide a basic 15 gigabytes of data per Canadian household a month that would be unlevied. There would be lots of room for households to be able to do Internet transactions, conduct business, share photos, download a few things, email, no problem. My own personal experience is that in a family, when you're downloading and consuming over 15 gigabytes of data a month, you're likely streaming Spotify, you're likely streaming YouTube, you're likely streaming Netflix. We think because the FANG companies will not give us access to the numbers they have, we have to apply a broad-based levy. They're forcing us to.
I'll move through this. We also believe that mobile should get some sort of consideration on this. We believe that this is a first response to what is fast becoming a grave economic condition.
The value gap is real. Basically, we're experiencing minuscule copyright remuneration from plentiful media consumption, and it's a woefully disproportionate remuneration. Ari can tell you just a little bit more about that.
That's kind of you. Thank you.
I was just going to tell you that the value gap, which I'm sure is a term you've been hearing, is very real, and it's something that I am staring right down the barrel of. There is no question about it.
I think one of the reasons the Screen Composers Guild asked me in particular to be here is that I am right in the middle of my career. I'll be 48 years old this year. I have three young kids. I have a mortgage. I take a vacation or two a year, if we can afford it. I do not live an extravagant or luxurious lifestyle by any stretch. However, the only way I've been able to get this far is because of the value of my intellectual property, which are the scores I have composed. Those are what have allowed me to sustain and nurture a career and a family.
If I had to operate just based on the front-end fees that I get paid for the work I do, it would be impossible to sustain and nurture a career. That downstream revenue is so important to someone like me. Here I am working on Anne with an E, which is by far the most popular thing I've ever worked on, and I'm seeing less money than anything I've ever worked on before.
I feel like there is something in the ecosystem that is unbalanced, and I feel that it's copyright. If government can intervene with copyright to make it stronger and bring it up to speed with the times and the rest of the world, we have a chance of bringing back some fairness and balance into that ecosystem.
Thank you for letting me say that.
Thank you, Madam Chair.
Despite all of our chair's goodwill and sincere intentions for creators, we are facing a government that has been shy in requesting what has to be done, a simple GST on subscriptions to Netflix. Just from that alone, what can we expect from them, really?
We all have to face this. We hear about the artists, and we're not even able to add on GST to a subscription to Netflix. This is ridiculous, completely ridiculous. There's no point, and may hide it in all sorts of phrases like, “We are coordinating with the international....” No. GST, a destination tax, is something that is required almost everywhere, if I'm not mistaken, even in 27 of the United States. He's really diluting the issue of GST, which is ridiculous. It is because of these guys who are going to say, “Netflix tax? Argh!” It is not a Netflix tax. It's the GST, my friend. That's it.
It is also this government that said no to recommendation 12 in that big report we had on the disruption of media, which said we should have Internet providers supply some sort of fund, like the Canada Media Fund. This is because the principle at that time was if your business is into providing international singles and big offers of entertainment to all Canadians, we were under the impression that our Canadian content needed you to put 5% of that good, big business into funds so that we could create our own stories on the screen. Again, we heard, “No, we will never do that. No, no, no. Why would we do that?” I'm going to tell you why.
It's because, Ms. Dorval, I've been working for, I would say, 23 years in the music and TV-related business and I was directly involved, from 1987 to 2002, in the relationship between radio broadcasters and television and music. It is so right when you say that you've been the best partner that we could have, so right. In the situation that we're facing now, these creators simply don't have enough money to put food on the table for their kids. That's what's happening. We need to open our eyes. We need to stop saying, “I don't want to see that and I'm going to watch Netflix on the train while riding back home.” We have to face reality. Broadcasters, artists, creators and cable distributors have all been involved in what used to call, “an ecosystem”, and that is so right. It was right, and it worked.
How come it worked? When Bryan Adams was here—and we shall not get into the star thing: “Oh, Bryan Adams”—Bryan Adams is an accomplishment of our system. Why has he been signed? It's because the label—I think it was A&M that signed him at the time—knew there was MAPL content to face for radio broadcasting in Canada. They said, “We'll sign this guy, and we will commit to our commitment to be involved in the Canadian industry and the entertainment business.” The Canadian content that they were looking for is why they do it.
Nowadays, what do we do? We do zip. We do zero. You're so right to tell us about the EU approach.
I would like to clarify something. Ms. Dorval, you said that multinationals get a large portion of the revenues from the various public performance rights. Yet you know very well that it is a different story in Quebec. You should say that, in Quebec, most of the big artists sign with independent record labels, which often have interests in their publication. They are small record labels, with people who are very committed and work as a community. So it is a different story in Quebec.
Mr. Novotny, you said we should take a global approach that you describe as techno moral, like the approach of companies such as Netflix. We had a global approach in the past and it worked. If Bruce Springsteen had not received public performance rights for his songs on the radio, A&M or CBS would not have sent a copy to radio stations and told them not to play it. Radio stations would simply not have received it and would not have played it. There has been harmonization of measures with other countries in the past.
We live in an international context and people will not want their work performed in our country if they do not receive royalties.
I would like to hear your opinion. It is of course very important, Mr. Novotny and Mr. Posner, for the artists to come here to speak for themselves. Agencies that collect royalties certainly can behave subjectively at times. They earn their living through the mechanical aspect, so we would like to preserve that. Others earn their living from the public performance of music on the radio or under continuous streaming contacts. The agencies have their own visions since collecting royalties is their job. For your part, you are the real artists and we are glad to hear your point of view. You are the reason we are here.
Moreover, Ms. Dorval and Ms. Wheeler, you both have experience negotiating with committees. I would like to hear your opinion on a feeling I have that really bothers me. I am not saying this to be mean. Honestly, I like everyone here; you are all good people. I must say, however, that just about everyone got lost because half of your brief was so complicated. It makes us wonder how much those artists receive in royalties and where they come from.
Do you not consider it a bit worrisome that the government has mandated both the Standing Committee on Industry, Science and Technology and the Standing Committee on Canadian Heritage to study this matter? We really do not know where we are going. For my part, I need a bit of roadmap. I will ask the chair of our committee because I know she is in very good faith. Could we zoom out to get a better idea of where we are at?
Both committees are working away. No one will have a complete opinion. You were certainly there at the workshops in 2012. The parties had specialists who knew the subject well. They helped us understand. It is both very complex and very important for our culture.
I would like to ask each of you the following question and you can take the remaining time to answer. Do you think the government should explain what it is trying to achieve? Can we for instance draw on European Union legislation to see whether we can do that?
The bottom line is that screen composers are not able to determine their own rates. We rely on copyright policy to do that for us. There's probably no other business in the world where somebody can bring their product to the marketplace and have an agency set their rate.
The responsibility of government policy to set a responsible rate thwarts the bias that we often hear. The way the rate has to be set is that it has to look into the community, the society, the way screen composers go to work every day.
I remember hearing a staggering figure about Daniel Ek, the creator of Spotify. When Spotify first became an entity that was streaming music around the world, his salary was published. As the owner and creator of that service he was reported to be making around $24 million to $25 million per year. In the same year, I remember looking at what Gordon Nixon was making as the CEO and director of the Royal Bank of Canada, which was about $12 million. I looked at the list of all the other people at Spotify, and the directors were all in the double-digit millions. Artists were making nothing, and you know that story.
Dan Hill once said to me that when two songwriters embark on writing a song together, there's no discussion about who owns what word, who wrote that melody, who wrote that motif or that theme. No, we drop those things at the door, and it's a fifty-fifty deal. If three songwriters collaborate, it's understood it's a three-way deal, because you can't track those small differences.
Screen composers and songwriters are faced with a really badly biased situation, whereby all the media companies that are delivering the data over their pipes are making a lot of money compared to us. We're seeing that kind of remuneration to the directors of the services that are subscribing them, Netflix, etc. We want a fairer deal.
Copyright is the shepherd of our creative industry. It's like Mother Nature. If you read the paper we authored, our vision is that a techno-moral and virtuous copyright policy will observe when there's imbalance in the system that is leading to the extinction of some of the players somewhere in that ecosystem. Like Mother Nature, it has to intervene and protect. If it doesn't, and if the screen composers, for example, start to not be able to make their own living, that means the orchestrators, the arrangers, the lyricists, the music editors, the recording studios, all our suppliers are going to feel that. We have to right this problem. The 20th century model no longer works. I've explained why, and so does the paper.
Does that answer your question?
Madam Chair, good afternoon, and thank you to the committee for the opportunity to participate in this study.
My name is Jayson Hilchie, and I'm the president and CEO of the Entertainment Software Association of Canada. We represent a number of leading video game companies with operations in this country, from multinational publishers and console makers to local distributors and Canadian-owned independent video game videos.
Canada's video game industry is one of the most dynamic and prolific in the world. It employs close to 22,000 full-time direct employees while supporting another 19,000 indirect jobs. Our industry's contribution to the Canadian GDP is close to $4 billion. That is not revenue but the salaries of our employees and those who our industry supports with their collective economic impact. Our impact is considerable. The average salary of a video game employee in Canada is $77,000 per year, which is more than double the Canadian average. To put all this into perspective, with 10% of the U.S. population, Canada's video game development is roughly half the size of the U.S. industry, which is the world's largest.
Of the 600 studios that span this country from St. John's, Newfoundland, to Victoria, British Columbia, and all points in between, approximately 85% of them are Canadian-owned. But the Canadian industry is a mix of large multinational publishers and developers and Canadian-owned companies. This mix helps to diversify and strengthen our industry. I cannot stress enough how important Canada is within a global context with respect to the production and creation of video games. We attract investment from our industry's leading multinationals. They are the largest employers in the Canadian industry. Some of the most successful games globally are created by them right here in Canada.
Video game production is one of the fastest-growing industries globally, estimated to generate close to $140 billion in revenue in 2017. Canada is a creation powerhouse supporting this booming industry. However, you don't generate $140 billion in global revenue without being focused on commercial viability, and we are very much a business.
Our industry has matured and our products have evolved. Technology and user preferences have diversified our revenue streams. What used to be an industry that developed a game, put it on a cartridge or disk, packaged it in a box and then put it on a store shelf is now one that offers many different types of products and services in as many different forms. While physical retail still represents close to two-thirds of our revenue, direct-to-consumer digital sales have quickly grown to more than a third of all our revenue, and they continue to grow. Advances in broadband technology and processor speeds make it possible to transmit large files directly onto a PC, console or mobile device, giving consumers options on how they choose to consume our products.
Games are not necessarily finalized anymore when they are published for sale. Many games now live on long after the initial launch, with multiple updates, add-ons, expansions and improvements that allow players to extend their engagement with their favourite games beyond the traditional single-player campaign.
With the rise of the smart phone and its ubiquity, and the business opportunities that came with it, the video game industry went through somewhat of a renaissance that allowed small independent video game studios to develop a game and self-publish it on the App Store or Google Play. This resulted in a boom of new and innovative companies that were suddenly able to take large creative risks.
The business model for many of these mobile games was quite different from what consumers had been used to. While it took a lot of experimentation by many companies, ultimately the free-to-play model of games became most prominent. In this model, games are given away for free in some capacity with the option for players to enhance and customize their experience by purchasing different types of virtual items. In-game transactions that allow players to enhance and customize their experience are now becoming a major source of revenue for our industry. They are also creating more customized and personalized experiences for our players, and this is why they work.
It's important to note that the vast majority of mobile video games are not profitable. Discoverability remains a huge issue for many of these games. While the App Store has created the means for independent studios to self-publish their games, most do not have the resources to then promote them and market their games like the many you see advertised by using celebrities on television. In addition to in-game transactions, downloadable content that offers additional game content post-release is another way our industry has diversified its revenue stream. This content may include new maps, levels, characters, missions and storylines that allow players who love a certain game to continue their experience in all new ways.
As we continue to innovate and look for new ways for our players to enhance their experience, we've also had to pivot for other reasons. Some of the changes we implemented over the years were the result of consumer demand but also the growing necessity to combat piracy.
Piracy has evolved over time and for the most part now resides in an online digital form. One of the ways we have combatted piracy is to move to a model where most of the games we produce have some sort of online component, whether this involves simply creating an account that enables content to be downloaded from a central server or, more commonly, including a multiplayer mode in a game.
These types of games link all players through central servers and require players to be logged in through an account in order to access the online functionality. This is very effective in limiting the ability of counterfeiters to flourish, as pirated games are not able to access the online functions. In most cases, the only content the player accessing a pirated game will be able to use will be the single-player mode, which in our industry is becoming less and less common.
In addition to making games that have this online functionality I just spoke about, our industry uses technological protection measures to combat piracy, both in the form of software encryption technologies and physical hardware found in video game consoles.
These technological protection measures essentially do two things: They work to encrypt the data on a game, which thwarts copying it, and they make copied games unreadable on a hardware console. While in many cases these measures do eventually fall victim to committed pirates who work to crack the game, they do provide a window for a company to sell legitimate copies during a period of most demand, which is often the first 90 days.
As encryption technology improves, it's taking longer and longer for the pirates to crack the game, which improves and lengthens the window the company has to recoup their investment in their product. In some cases, those who sell what we refer to as “modchips” offer their services online with the promise to allow your console to circumvent the protections found within it and play pirated games. These circumvention devices were made illegal in Canada in 2012 as part of Canada's modernized copyright legislation.
In fact, just last year, Nintendo used Canada's copyright law to successfully challenge and sue a Waterloo, Ontario, man who was selling circumvention devices online. After a lengthy process, Nintendo was awarded over $12 million in damages, and multiple media outlets reported that the ruling in Federal Court confirmed Canada's copyright law as one of the strongest in the world.
In order to maintain its effectiveness, the law must continue to provide protections to content creators in the video game industry by maintaining the provisions that make circumvention devices illegal. As our economy moves increasingly to one that involves digital goods and services, those protections such as TPMs must remain.
Even in the face of challenges, our industry continues to innovate and experiment with even more novel revenue models and more choices for our consumers to engage with our products. Most recently, there have been moves toward subscription-style models that allow consumers to pay a monthly fee for access to hundreds of games, both recent and back-catalogued, that can be downloaded or directly streamed over the Internet.
An example of a streaming service is PlayStation Now, which for a monthly fee allows customers to access over 650 video game titles over the Internet through a central server. While PlayStation offers multiple subscription options for its service, in Canada you can subscribe for about one year for about $100.
Just recently, Microsoft announced its new Xbox All Access service, which is different from PlayStation Now in that it offers a bundle of items that includes the Xbox console itself, an Xbox Live membership that enables online and community functionality and an Xbox game pass that offers access to more than 100 games available for direct digital download. Microsoft is offering this service for a monthly subscription fee in a variety of forms.
As you can see, the video game industry is constantly evolving the way it engages with its consumers by working to find the best ways to give players the ability to choose, because it really is all about choice when it comes to commercial success. There is a direct connection between remuneration models in our industry and how consumers want to access our content. Video game consumers don't want the industry to tell them how to access our products. We have learned over the years to listen to them and to successfully adapt our products accordingly.
While there is still more to learn, our industry is proud of the way we put our players first, and this has certainly helped create gameplay experiences that are what the players want, as well as remunerative models that work for our industry.
Hello, ladies and gentlemen.
On behalf of Stingray Music Canada, I would like to thank you for inviting us to take part in the discussion on the remuneration of artists and creative industries in connection with copyright, and more specifically with music, which is our industry.
Founded in 2007, Stingray is a Canadian company headquartered in Montreal that currently employs 340 people in Canada.
We distribute our services both in Canada and abroad. Considering all our services, we we reach an estimated 400 million subscribers or homes in 156 countries. We also serve 12,000 business clients, which represent 78,000 commercial establishments.
For the 2018 fiscal year, approximately 47% of Stingray's revenues were Canadian. The more successful Stingray is abroad, the more Canadian artists benefit from this success.
Stingray's service portfolio in Canada includes an audio music service called Stingray Music, which includes about 2,000 audio music channels offering a hundred or so genres of music. We also offer various on-demand services, including video clips, karaoke, concerts, various products available individually, as well as tens of linear channels on television such as Stingray Classica, Stingray Festival 4K, Stingray Ambiance, and so forth.
We also offer music and digital display services to commercial establishments through our Stingray Business division.
Our services are available on various digital platforms and devices, including cable and satellite television, the Internet, mobile applications, video game consoles, in flight or train entertainment systems, smart cars, WiFi systems such as Sonos, and so forth.
More than 100 music experts right around the world are responsible for programming Stingray's various services and channels. This distinguishes Stingray from various other music services, which use algorithms to select content for their clients. The programming on Stingray's channels is also tailored to the local market and to the demographics of that market.
By necessity, Stingray is also a technology company. The demands of managing a large digital catalogue and distributing that content on various platforms and in various markets require Stingray to stay on top of and at the forefront of technology. Stingray accordingly invests several millions of dollars every year in research and development to remain competitive and retain its clients.
Stingray is committed to encouraging Canadian talent and artists and it participates actively in the development and promotion of Canadian content. During the last broadcast year, Stingray has spent approximately $379,000 in Canadian content development, CCD, initiatives, which include payments to associations such as FACTOR, Musicaction and the Community Radio Fund of Canada, but also awards at music events and festivals, artist performance fees, workshops, educational sessions, and so on.
In addition to such CCD initiatives, after Stingray's IPO in 2015, the CRTC approved the change of ownership and effective control of Stingray, but it required that Stingray pay tangible benefits corresponding to an amount of $5.5 million over a period of seven years.
In addition to those regulatory obligations, Stingray also contributes voluntarily in many other ways to the promotion and development of Canadian artists. Very recently, Stingray partnered with ADISQ to create a new music video channel made available through television operators in Canada, named PalmarèsADISQ par Stingray.
Pursuant to Stingray's desire to invest in young talent, a portion of the profits generated by such channels will be invested in local music video production through existing third party funds such as Fonds RadioStar. Through this initiative, Stingray will finance the production of music videos broadcast on its channels but will also help develop the career of up and coming Quebec and Canadian directors and artists.
Each year, Stingray also gives certain amounts to events of partners involved in the development and promotion of Canadian talent. For example, Stingray has been a regular sponsor of panels at les Rencontres de l'ADISQ and other similar events.
Stingray also produces the series PausePlay, which consists of exclusive interviews and intimate performances of popular and emerging artists recorded live to promote their new album or tour. Such recordings are then made available by Stingray on social media platforms and channels to offer important exposure for these artists. We also offer editorial coverage on the Stingray blog about album reviews, concert reviews, etc.
Stingray is not here today to ask anything of the committee. Stingray appears before the committee to propose a solution, or at least part of a solution, to help Canadian artists.
We believe that some unregulated industries should be regulated. For example, the Stingray services that are offered through television are subject to Canadian content minimum requirements, as are the commercial radio stations. If we want to promote and encourage the visibility of our Canadian artists, Stingray believes that commercial background music services should be included in the Broadcasting Act and be subject to similar requirements. Such measures would apply to Stingray, because Stingray is one of the biggest background music suppliers in Canada right now.
Let's think about it. Why would the communication of music in a retail outlet that uses the services of a background music supplier be treated any differently than another outlet that plays radio as background music, or any differently than when such a person listens to a TV music channel in his home?
We submit that no such distinction should be made, and we made the same submission before the CRTC in our comments on future programming distribution models in February 2018.
We strongly believe that our proposal can provide Canadian artists with excellent promotional platforms as well as additional revenues.
Thank you very much, Madam Chair.
Ms. Francoeur, Mr. Hilchie, thank you for being here with us.
Mr. Hilchie, I hope I have some time to speak to you. I am in fact going to try to be brief.
This industry is really blossoming. We constantly hear excellent news about it. In my opinion, the fact that there is a creative mass of workers in this area is promising for culture in general. In the evening, after working with you to earn a living, they don't become boring; they continue to create. It's really fantastic.
Ms. Francoeur, could you tell us about the space Stingray occupies in the world of music broadcasting? I think your enormous success is probably related to the high quality of your programmers. I'm thinking, among others, of Henry van den Hoogen, whom I met at Mix 96, or of Jean-Richard Lefebvre, who founded Galaxie, a network you purchased.
The service Stingray offers is in a way a new playing field. It's a service you offer to businesses. You can't subscribe to Stingray. You provide this service so that there is appropriate music in a Gap store, for instance. Are you the ones who do the programming?
Thank you, Madam Chair.
Thank you, guys, for coming in today.
I want to speak a little bit on gaming.
When my children were growing up, we bought the machine and the program, and that was it and they played all they wanted. The new platform is concerning for grandparents, as I am, in that your grandson or granddaughter phones you and wants a gift card.
What you guys have done is remarkable. Now it's a continuous revenue source. You don't sell only the game, you sell the costumes, armour, or whatever it may be. It's brilliant, and on behalf of all grandparents, stop.
Voices: Oh, oh!
Mr. David Yurdiga: No, but it seems like your industry is doing very well. It's always changing. It's harder for people to pirate. You don't want to lose your spot because you gain all this stuff. I don't think you guys have a big issue, from my perspective.
Are there any problems with piracy? I can't see it. It's changing too rapidly.