I call the meeting to order.
It's another fine Monday afternoon here. Welcome to INDU, where we are continuing our study of the five-year legislative review of the Copyright Act.
Today, from Telus Communications, we have with us Ann Mainville-Neeson, vice-president, broadcasting policy and regulatory affairs, as well as Antoine Malek, senior regulatory legal counsel.
From Association québécoise de la production médiatique, we have Hélène Messier, president and chief executive officer; and Marie-Christine Beaudry, director, legal and business affairs, zone three. That's exciting, zone three.
From the Société professionnelle des auteurs et des compositeurs du Québec, we have Marie-Josée Dupré, executive director, by video conference from Montreal. Can you hear me?
That's great. Thank you.
Just for a change, I'll make my presentation in English, but I'm happy to respond to any questions in French or in English.
Good afternoon, and thank you on behalf of Telus Communications for the opportunity to appear before the committee.
My name is Ann Mainville-Neeson, and I'm vice-president of broadcasting policy and regulatory affairs at Telus. With me is Antoine Malek, senior regulatory legal counsel at Telus and an intellectual property lawyer.
Telus is a national communications company. Whether it's connecting Canadians through our wireless and wireline businesses or leveraging the power of digital technology to enhance the delivery of health care services, we are committed to connecting with purpose, positioning Canada for success in the digital economy and enhancing economic, educational and health outcomes for all.
We provide a wide range of products and services, including wireline and wireless telephony, broadband Internet access, health services, home automation and security, and also IPTV-based television distribution. In light of earlier testimony that you received from other TV service operators, it is relevant to note that unlike our main competitors, Telus is not vertically integrated, meaning that we do not own any commercial programming services. We are purely an aggregator and distributor of the best content there is to offer.
In striving to be an aggregator of choice and the place where Canadians go to access content, we listen to our customers and we are constantly looking for better ways to meet and anticipate their needs and desires. We know that innovation is essential to competing in the digital environment, where consumers have more choice than ever before. We believe that innovation is essential in keeping the Canadian broadcasting system, which is a major source of income for Canadian artists, healthy and competitive. Accordingly, our remarks today are focused on amendments that would foster innovation by promoting efficiency and by increasing the resiliency of the act in the face of rapid change.
I want to start with one of the areas where amendments enacted in 2012 fell a little short on the innovation front. In 2012, Parliament adopted exceptions that would provide users with the right to record a program for later viewing. This recording can be made on their own device or on a network storage space. When the recording is made in the cloud, it is referred to as a network personal video recorder—NPVR—or sometimes cloud PVR.
While the 2012 amendments were a step in the right direction, the statutory language contemplates a discrete recording for each user. As a result, an NPVR service provider like ourselves might need to store hundreds of thousands—even millions—of copies of the same recording, one for each user who initiates a recording. That kind of excessive duplication is unnecessarily inefficient and costly for the network operator, and creates no value for the rights holder.
Innovation dictates leveraging the benefits of network efficiency by sharing a single recording of a program among all the users who initiated a time-shifted recording of that particular program. Telus recommends that the act be amended to allow this to happen without any additional liability being incurred by the network operator.
Looking to the future and other ways that the act can more broadly foster innovation and be adaptable to technological change, Telus recommends that the risks associated with innovation in the face of statutory ambiguity be distributed more evenly between rights holders and innovators. Specifically, we propose some changes to the statutory damages regime in the act.
Under the current rules, the potential liability posed by statutory damages can be completely detached from either the actual harms suffered by rights holders or any profits derived from an infringement. We recommend that the courts be empowered in all cases to adjust statutory damage awards to align them with the circumstances of the infringement. The courts are already empowered to do this, but in limited circumstances only. Evidence of bad faith should be required to justify statutory damages if they're disproportionate to the infringement. By ensuring that the punitive aspect of these awards is applied only in cases where it is appropriate and desirable to do so, the Copyright Act would no longer be discouraging innovation.
I would now like to turn to the notice and notice regime.
First, Telus agrees with other ISPs who have presented before you that notice and notice is a reasonable policy approach to copyright infringement because it balances the interests of rights holders and users. We also agree with proposals to mandate the form and the content of notices, especially to require them to be machine-readable so that the processing can be as close to fully automated as possible.
Telus also agrees with earlier announcement that notices should not contain extraneous content, such as settlement demands, nor should they contain advertising on where to find legal content, as some have suggested. That is not the purpose of notice and notice.
Telus also echoes TekSavvy's proposal that ISPs be permitted to charge a reasonable fee for forwarding notices. This is not only a matter of fairness to ISPs, which are innocent third parties in copyright disputes; it would also address the potential for misuse of the regime. While the government has announced an intention to take steps to address misuse by prohibiting settlement demands, this doesn't address other forms of misuse, such as fraudulent notices or notices that include phishing links, which pose a security concern for consumers. Adding an economic cost to accessing the regime would go a long way towards minimizing its abuse.
Finally, Telus also proposes that the separate statutory damages provisions under notice and notice be amended to be harmonized with our proposals for amendments to the broader statutory damages regime under the act. Specifically, Telus proposes that under notice and notice, the courts should be given the discretion to lower a minimum award to ensure that it is proportional to any actual harm to rights holders, and that evidence of bad faith on the part of the non-compliant ISP be required to justify a disproportionate and punitive level of damages. Such an amendment would go a long way to helping ISPs deal with the significant and increasing costs that they are required to incur to help rights holders enforce their rights.
In closing, we thank the committee for its work in reviewing this important piece of legislation. Copyright is one of the key legal regimes that governs the digital markets of the modern economy, and we support its intent. In order to maximize the potential for Canada's digital economy, we believe the legislative framework must balance support for creators with the public interest in supporting innovation that leads to new technology and business possibilities for the benefit of all Canadians. Thank you.
I'll be giving my presentation in French.
Mr. Chair, ladies and gentlemen, my name is Hélène Messier.
I am the president and chief executive officer of the Association québécoise de la production médiatique, or AQPM for short. Joining me is Marie-Christine Beaudry, director of legal and business affairs for Zone3.
Zone3 is one of the largest production companies in Quebec. It produces films, and its subsidiary Cinémaginaire recently produced the Denys Arcand film La chute de l'empire américain.
In the television arena, the company produces programs of all genres including series for youth like Jérémie, magazine programs such as Les Francs-tireurs and Curieux Bégin, variety shows such as Infoman and comedies such as Like-moi!
The AQPM brings together 150 independent film, television and web production companies, representing the vast majority of Quebec companies that produce audiovisual content for every screen in both French and English. The AQPM's members produce more than 500 films, television programs and webcasts watched by millions of people on every type of screen.
Our members are responsible for such film productions as the feature Bon Cop Bad Cop and Mommy—winner of the Jury Prize at the Cannes film festival and the César award for best foreign film—not to mention television programs La Voix, Fugueuse and the daily District 31, just to name a few. The commercial success of these productions is the envy of many.
In 2016-17, Canada's film and television production sector was valued at nearly $8.4 billion in total, generating more than 171,700 full-time equivalent jobs in both direct and indirect employment. Quebec's film and television production sector is worth $1.8 billion and generates 36,400 jobs.
We want to thank the committee for the opportunity to contribute to its statutory review of the Copyright Act. Although the AQPM is concerned about a number of issues including piracy and the extension of the private copying levy to audiovisual works, our remarks today will focus on audiovisual copyright ownership.
Determining who the creator of a sculpture or song is may be straightforward, but it's a whole other story when it comes to an audiovisual work, be it a television program, film or web content. The Berne Convention for the Protection of Literary and Artistic Works gives countries freedom in establishing copyright ownership of cinematographic works.
In Canada, the identification process began in the early 1990s but has been delayed ever since, leaving Canadian legislation silent on the issue. As a result, only the courts are empowered to identify who the author of a cinematographic work is on the basis of facts specific to that work. With few documented cases, no clear rule has emerged.
Many countries have opted to set out in their legislation how the author of an audiovisual work is identified. Countries with similar copyright philosophies to Canada's—the U.S., the United Kingdom, Australia and New Zealand—have identified the producer as the sole copyright holder, with the exception of the United Kingdom, where both the producer and director are copyright owners.
Conversely, in Canada, not only are producers not recognized as copyright owners, but they are also forced to operate in an uncertain model when producing and using audiovisual works, managing all related risks. It is worth noting, though, that, in order to limit those risks, some clarification has been incorporated into collective agreements negotiated between unions, representing screenwriters, directors, music composers and performers, on the one hand, and the AQPM, representing producers, on the other. Generally speaking, the producer has rights and pays a fee or royalty for the use of those rights.
A question worth asking is whether “cinematographic work” is still the right designation for the wide range of audiovisual works dominating the sector today, including those intended for digital media. In the AQPM's view, the current definition of a cinematographic work is not technology-neutral since it refers to a traditional production technique—cinematography—as opposed to the actual work.
For that reason, the AQPM recommends that the new category “audiovisual work” be created. It would be defined as an animated sequence of images, whether or not accompanied by sound, and include cinematographic works.
The next question that arises is who the copyright owner of an audiovisual work is. The answer lies in characterizing the work somehow. Is it a work in and of itself, or is it a collaborative work or compilation that brings together a number of underlying works? Does the script or music, for instance, represent a whole that cannot be separated, or do a number of separate works make up a whole that is more than the sum of its parts? Who owns the copyright as far as that whole is concerned?
The AQPM maintains that the producer's role in the creative process and making of an audiovisual work dictates the recognition of the producer's creative contribution to the work. This would make the producer the owner of the copyright in the audiovisual work, and all related rights, without penalizing the creators of the underlying works. In that case, it would be important to specify that a corporation could be the first owner of copyright in the audiovisual work.
Ms. Beaudry will now explain why the producer should hold all rights to the audiovisual work, right from its infancy.
Being the producer of a cinematographic work is a whole art unto itself.
The producer can be thought of as the conductor of the cinematographic or audiovisual work. The producer is the only one present from the beginning of the work's creation to its delivery, and even after, during its use or exploitation. The producer has total control over the funding and management of the project, as well as the creative elements.
Not only by securing the funding, but also by selecting the artists involved throughout the process, the producer determines, guides and influences the content of the audiovisual work, be it a magazine, talk show, variety program, documentary or drama.
What's more, the producer participates in the actual creation of the cinematographic work through day-to-day involvement in the creative development process. When all is said and done, the producer is the final decision-maker, all the while respecting the prerogatives of screenwriters and directors.
Depending on the type of production in question, be it a work of fiction, a variety program, the recording of a concert or a documentary, the involvement of the artists, screenwriters, directors and composers will vary.
The components of the work will also vary: original or existing music, original script or book adaptation, film footage, existing artwork or the creation of original art. The combinations are endless, and many are those who can claim to be the author of any one of the elements that make up an audiovisual work.
It is essential that the producer be able to hold all copyright in the audiovisual work with total certainty. Not only does the producer play a vital creative role, but they are also solely responsible for respecting contractual obligations to third parties, including financing partners and the production team.
At the end of the day, the producer alone assumes the risk for any budget overruns that occur during production of the audiovisual work. The producer's involvement is absolute.
Today, it is nearly impossible to produce a cinematographic work without relying on tax-credit-based funding. In granting federal tax credits for cinematographic works, the Canadian Audio-Visual Certification Office, known as CAVCO, stipulates in the application guidelines for its film or video production services tax credit that the producer be sole owner of global copyright in the work for the purposes of its use. This appears in the copyright ownership section.
Furthermore, nearly all funds for cinematographic production in Canada, not to mention bank financing in some cases, require the producer to be accredited by CAVCO, meaning that the producer must adhere to the requirement in order to access funding for production. Any change to the Copyright Act that awards copyright ownership to a third party would run counter to these funding requirements and undermine Canadian film production.
Once the work is completed, it is also the producer who determines, funds and manages the exploitation of the cinematographic work. To that end, certain elements are contracted out to third parties all over the world. The producer may decide to work alone or to go through a distributor or distribution agent.
The ways in which a cinematographic work can be exploited or used are many, and they require a myriad of copyrights in the work. That may include the distribution of the work in existing markets here, at home, or in other jurisdictions, the sale of a format based on the work, the marketing of merchandise and so forth.
Mr. Chair and members of the committee, thank you for inviting us to take part in these consultations.
My name is Marie-Josée Dupré, and I am the executive director of the Société professionnelle des auteurs et des compositeurs du Québec, better known as the SPACQ. Established 37 years ago, the SPACQ works to promote, protect and advance, in every possible way, the economic, social and professional interests of music creators—several thousand music writers across Quebec and French-speaking Canada.
The cultural sector is an important part of Canada's economy, but not all participants receive their fair share. Very often, music writers work in the shadows and are not necessarily feature artists. They are nevertheless the first link in a long chain of players, and usually the lowest paid.
I will now discuss the elements that are especially important in order for Canada to have copyright legislation that is simply adequate.
The first element is the duration of copyright. Further to yesterday's signing of the U.S.-Mexico-Canada trade agreement, or USMCA, we were pleased to learn that Canada will extend copyright protection to 70 years after the death of the author, as is already the case in the countries who are our main trading partners.
All of our creators will now be treated equally. The Copyright Act, however, contains a large number of exceptions, so limiting the number, interpretation and scope of those exceptions will be essential to preserve any gains from extending copyright protection to 70 years after the author's death. It would be very unfortunate if an overly broad interpretation of the existing exceptions were to chip away at compensation for the use of works.
The second element is the responsibility of platforms when it comes to user-generated content. We applaud the European Parliament's recent majority decision on the responsibility of content-sharing platforms, requiring royalties to be paid to creators and rights holders. Again, I would point out that, up until last night, Canada was one of the few countries, if not only one, to view such sharing of works as being exempt from responsibility.
It's time that lawmakers revisit their position and adopt appropriate measures. In other words, it's time to hold companies like YouTube—not to get too specific—responsible for payment of adequate royalties, given the content distribution on their platforms.
The third element is the private copying regime. Introduced in 1997, the system allows Canadians to copy whatever music they please for personal use; in return, authors receive royalties for those copies. The levy is supposed to apply to all audio recording media usually used by consumers.
Parliament's intent was clearly to create a regime that was technology-neutral, meaning one that would not become obsolete simply because of media advances. Unfortunately, in 2012, the regime's application was limited to blank CDs, a now outdated medium. Consumers, however, continued to make just as many copies of music on other types of audio recording media, including tablets and cell phones, which are not subject to the regime. Because of this restriction, creators are losing tens of millions of dollars in royalties.
Fixing this problem is paramount. The Copyright Act must clearly stipulate that the regime applies to all audio recording media, and the term “medium” must be interpreted broadly enough to cover all existing and not-yet-discovered media.
It is worth noting that companies with which creators do business set out in their contracts the ability to disseminate and copy creators' works by every known and not-yet-known means. Conversely, Parliament has curtailed creator compensation by amending a regime that cannot keep pace with technological advancement.
In addition, as far as the Copyright Board of Canada is concerned, it is essential that the process be simplified and that decisions be made more quickly so that creators can receive adjusted compensation, increased to reflect the situations under consideration, and so that users know where they stand within a reasonable time frame.
Waiting years for decisions hinders the effective application of levies by copyright collectives, and this is a major irritant for users. Keep in mind that these long wait times can mean that the use of levies at the source and related challenges are no longer the same, given the pace of technological change.
Above all, the government must ensure that the necessary resources are allocated to the board. As a result, the board will be more effective and will have a positive impact on both creators and consumer users.
In conclusion, the government must keep moving forward. It must recognize the value of the works used on a daily basis and ensure that the creators receive fair compensation. Otherwise, culture in general will suffer. Creators are at the heart of culture. Without creators, no content would be available.
Thank you for listening.
Mr. Chair and committee members, the Association des réalisateurs et réalisatrices du Québec is very pleased to be appearing today to discuss this important review of the Copyright Act. My name is Mylène Cyr, and I'm the executive director of the association. I'm joined by Gabriel Pelletier, the president of the association.
The ARRQ is a professional union of freelance directors. It has over 750 members, who work mainly in French and in the film, television and web fields. Our association defends the professional, economic, cultural, social and moral interests and rights of all directors in Quebec. The negotiation of collective agreements with various producers in one step taken by the association to defend the rights of directors and ensure respect for their creation conditions.
I'd like to discuss some of the goals mentioned by and in their letter to the chair of this committee:
How can we ensure that the Copyright Act functions efficiently ... and supports creators in getting fair market value for their copyrighted content?
Finally, how can our domestic regime position Canadian creators ... to compete on and harness the full potential of the global stage?
As the Copyright Act stands, the determination of the creator of a work is primarily a question of fact. The act never specifies who the creator is. Film works, which are generally collaborative, are no exception. Canadian case law states that, if there are many candidates for the title of creator of the film work, the director and scriptwriter will generally be among them.
According to the principle issued by the Supreme Court, these creators clearly use their talent and judgment to create the film works. Under the act, the creators are the first owners of the copyright of the film works. However, certain sections of the act, in particular the sections that concern presumptions, generate some ambiguity in this area. This ambiguity prevents directors from obtaining fair market value for their rights. The SACD and SCAM brief states as follows:
When SACD-SCAM tried to negotiate general licences for the benefit of directors with certain users of audiovisual works, the users refused to negotiate on the basis of the legal uncertainty. Directors currently do not receive all the compensation to which they are entitled for the use of audiovisual works.
Recently, in our collective agreement negotiations, an association of producers questioned the ownership of the rights of freelance directors to film works. The effects of this ambiguity are particularly significant in a context where the broadcasting market is constantly evolving and where the market value of copyright must be able to evolve with it. It's therefore essential to give the market a clear chain of title that can be negotiated at its fair value for creators.
We find that it would be appropriate, as part of the review of the act, to clarify any ambiguity concerning the status and rights of the director and scriptwriter when it comes to film works in Canada. The ARRQ is proposing a simple amendment to the act that does not call into question the principles of the act or the current method of compensation, but that would resolve any ambiguity regarding the rights of freelance directors. We're submitting an amendment of section 34.1, which introduces presumptions respecting the copyright ownership of film works for the director and scriptwriter as co-creators of the film works.
This proposal, which the ARRQ supports, has been agreed upon by the SARTEC, WGC and DGC artists' associations. It also fulfills the objectives of the SACD-SCAM collective society.
Mr. Chair and committee members, my name is Gabriel Pelletier. I'm not only the president of the ARRQ, but I'm also a director.
I'm very pleased to finally be able to speak to you today. I've been waiting many years for this moment.
In 2000, I directed a film entitled La vie après l'amour, which won the Billet d'or for the highest box office revenue in Quebec. The film even came in second place in terms of box office revenue in Canada in general. Its commercial success was obviously very profitable for the companies that distributed the film and for my producer's company.
I remember quite well the royalty amount that I obtained for directing the film, in Canada, because it's easy to recall. It's a round number, and even a very round number. It's zero dollars and zero cents. For the six films that I had the opportunity to direct in my career, a number of which generated $1 million in revenue, I obtained the same amount for my rights as a director in Canada. Yet, I've had no difficulty obtaining royalties in other countries in the Francophonie. Canada is the only place where the ownership of my rights as a director is contested and where I'm not given my fair share. As a result of ambiguity in the Canadian legislation, the SACD, which represents my rights, can't negotiate with the companies that use my works.
I'm not the only person in this situation. This is the case for all francophone directors whom I represent. No one is calling into question the rights of the other artists whom we direct to create our films or television programs, such as music composers or actors, who obtain neighbouring rights. So why are we calling into question the director's rights? Can we really claim that Xavier Dolan, Philippe Falardeau or Léa Pool don't leave an original mark on their works? That would be dishonest.
Like my director colleagues in Quebec, I'm a freelance artist. We all must cope with job insecurity in an extremely competitive environment. We must develop ideas and projects, and then pitch them to producers and finally to investors.
Only a few of these projects see the light of day. In many cases, we must work at a second job to fulfill our financial obligations when we aren't working on a project. Ensuring fair compensation for the distribution of our works is the best way to give us the financial peace of mind needed to continue doing what we do best, which is creating new works.
This is how we can harness our full potential and become competitive on the domestic and global stage, as suggested by and .
Committee members, today you have the opportunity to rectify a situation that has been undermining the key creators of film works, the directors and scriptwriters, in the representation of their rights. By simply clarifying the act and without betraying the act's principles, you can help these creators effectively contribute to the Canadian creative economy, while strengthening that economy.
There are different ways for directors to make money from copyright. They make money either through collective agreements, when licences are granted to the producer, or through broadcasters, when the work is used. These are all secondary markets, for example, and the reruns on television or digital platforms, at this time.
For instance, the Directors Guild of Canada, or DGC, works on a front-end basis. In other words, its members receive payments in advance, whereas francophone directors are generally paid at the back end of the project. We're therefore paid when the work is used. However, since broadcasters have been challenging the directors' ownership of copyright, they have refused to negotiate royalties for directors when the work is used.
The reason is that, in the past, directors were employees of broadcasters. Under Canadian law, the first owners of copyright were the employers. However, our market has changed, and broadcasters have outsourced the production of works to production companies. From that point on, we should have been the owners of copyright. We were supposed to negotiate an arrangement, but the companies refused to do so.
We aren't taking into account the initial fee paid to directors, which includes part of their use rights. Directors are then entitled to a portion of the producer's revenue for their residual payments.
If the director doesn't receive any revenue, the reason is that the producer, at the start, doesn't receive any revenue. If the director receives a percentage of the fees collected by the producer for use of the work on other platforms, for example, but the producer doesn't receive any revenue, the amount will be reduced if the director receives 4%, 5% or 10% of the amount obtained by the producer. I'd say that this is also the producer's problem. However, the initial fee is still a considerable fee that includes the director's rights for the first uses.
Ms. Beaudry, do you have anything to add?
As producers, we have, for example, agreements with the SARTEC for scriptwriters. When the material is broadcast, scriptwriters receive from the SACD an amount that comes directly from the broadcasters.
In addition, the scriptwriters negotiated with us, the producers, the use and revenue from the use of the audiovisual work, and a right to access the economic life of the work. This means royalties of 4% or 5%, or on the basis of their specific negotiations with the producers.
The directors have the same right in our collective agreements where, according to the economic life of the work, they'll be associated with it. If the work is used elsewhere, they have access to royalties of 4%, 5% or more, depending on their direct negotiations with their producer. It's part of their collective agreement.
It must also be understood that there are different types of productions. In terms of audiovisual works, we're talking about both magazines and feature films. It's important to understand the wide range of situations that may arise when it comes to film works at this time. This must be kept in mind.
I simply want to point out that, initially, the scriptwriters obtain the use rights. The SACD can negotiate rights for them because, traditionally, as I was saying earlier, they were originally freelancers, even for broadcasters.
Furthermore, Ms. Beaudry is confusing dramatic works and non-dramatic works. This is about dramatic works, and copyright applies differently. Our ability to negotiate is at stake. We give producers a licence to use the work. Once this is done, we obtain a share of the profits. However, as a result of the definition of profits, it's mathematically impossible to obtain royalties.
For example, the most popular film and biggest box office hit in Canada, Bon Cop Bad Cop, which you should all know, earned $8 million. Fifty per cent of the $8 million went to the theatre operators, which left $4 million. Between 25% and 30% went to the distributors. This left $1.5 million. In addition, since we're discussing profits, the film cost $5 million to produce. It's therefore impossible to obtain a share of the profits.
In other words, I'm asking today that creators be given the ability to negotiate.
It's all about who is making that recording.
On an NPVR it's no different from someone who has recorded on their device at home, on their home PVR, except for the network provider, since we are also providers of on-demand content; therefore, we negotiate those rights and we pay for those rights, but that's in order to offer the programs to people who have not recorded and who decide to look through our menu and access some of the great content that we have to offer. In the case of an NPVR, this is someone who has chosen to record something, and they are doing so in a general cloud space.
Operators of that cloud question why they should have that excessive duplication, with so many copies of the same thing being stored. It's also not ecologically friendly to have so much storage of the same things, so it's simply a back office request in order to streamline and have that single copy. Only those who have selected the record would have access to that single recording, and we would have the metadata and whatnot, other information to ensure that if someone started to record five minutes late, they would only access that program starting five minutes late.
My hair is grey, and I'm old enough to remember that there were no glory years for musicians in copyright. We were always robbed.
One year I co-wrote the video of the year, and I told my wife, “This is our year, honey. We're going to get the big money”, because we were in heavy rotation. My cheque was $25.
At that time, the cable networks that were running TV shows claimed they were not making money off of them and that they were offering a service to musicians. SOCAN fought that, and we changed the legislation. Then of course, cable networks went out of business.
When YouTube started, everyone said, “Well, they just got started in a garage, and they're young upstarts.” Now they're part of the biggest corporate entity in the world, Google. Everybody I know shares music on YouTube. I live on YouTube.
SOCAN is able to go after hairstylists and little restaurants to pay copyright fees. Wouldn't it be better if we just had blanket copyright legislation so that for people who were posting songs or making videos out of songs, there was a blanket fee that could be distributed among artists, as we did with cable television and in other areas? Would that provide a guaranteed revenue stream for the use of music on YouTube?
I think your question is mainly for me, and I'd like to correct something: we don't want to change that ecosystem. Quite the opposite; we want to preserve it. At this time, authors give producers licences so that they may use their works. We don't want to change that.
We simply want to clarify the act to include a presumption of ownership. That means that absent contrary evidence like a contract with a producer or a claim to copyright by another creator, it is presumed that the scriptwriter and the director are at least authors of the work. That ambiguity needs to be cleared up in the act with regard to the presumption of ownership.
Under the act, the producer is presumed to be such if his name is mentioned in the credits. This wording, under the subtitle “Presumptions respecting copyright and ownership”, could lead people to believe that the producers are the authors. However, that is not the case, and nothing in Canadian jurisprudence states that producers are authors.
The authors are people who use their talents and their judgment to create dramatic works. I respect the work of producers, who take financial risks, but I don't think that creating a budget is equivalent to creating a work of art.
The current system works and we do not want to change it.
I hear my colleague talking about feature films alone, and I understand since he directs feature films. However, we are discussing many other things here such as televised magazines, variety programs or reality television shows. Often, there is no scriptwriter. There may also be other directors who come in at the end of the development of the work. I'm saying that to highlight the fact that there are different types of works, and let's not forget that all of them fall under the “audiovisual work” definition.
Often, the producer starts the development process, whether we're talking about a variety show or a drama program. In that last case, he will work with the author, of course, who will have rights from his script, since this will be a distinct cinematographic work and he will be able to exploit it on the publishing side. Producers do not necessarily have all those rights.
The producer takes part in the development of the work and there are discussions, exchanges. We're talking here about dramas, but think about variety shows or TV magazines; the producer knows what the broadcaster wants, and he is the one who stays in contact with the latter and pilots the development of that work.
The director comes into the process at the production stage. By establishing and negotiating the production budget, we determine the scope of the work and its category: long series, long series of 30 or 60 minutes, filmed outside or not, and so on. All of these decisions will relate to the very content of the work, to its vision.
To say today that we have no impact on the creation of the work would be totally false. In the case of a full-length film, I recognize that the development of the work may be somewhat different. However, that is not the case every time, and we cannot ignore and not mention the involvement of the producer in the creative process.
In the music publishing world, there are big players like Universal, Sony, and Warner-Chappell, and other small and medium ones. These publishers sign contracts with several creators. I'm not talking here about singers, but songwriters.
The contracts songwriters sign force them to transfer ownership of their works to the publishers. It is common practice in Canada—and even elsewhere in the world—for a songwriter to assign ownership of his works, which then no longer belong to him or her, in exchange for remuneration. In Canada, 50% of that remuneration goes to the publisher, and the other half goes to the songwriter. If you are the sole songwriter, you receive all of that 50%, but if there are two or more of you, that figure goes down.
Companies can thus increase their assets and their capital, but in every instance, the songwriter sees 50% of his income go to the publisher. If he's fortunate enough to also be a singer, his record company will also provide remuneration, but once again, that is only a small percentage. Unfortunately, the monies generated are chopped up in this way.
It has been said repeatedly that royalties paid to songwriters for the online plays of their works have never offset the loss of income they used to get from the sale of their compact disks, since those royalties have been completely divided up in the same way. And so their incomes can only stagnate or decline, and they weren't all that great to begin with. If the songwriter is also a singer, he is then in another category and may make more. For the creators, however, that is the situation.
In the days of compact disks, each song brought in 10¢ for the songwriters. Thus, a 10-song album generated a dollar for the creators, and half of that went to the publisher or publishers, and the other half to the songwriter or songwriters. Someone is losing out from this shift, and clearly it is neither the publishers nor the companies, but the music creators who are forced to assign ownership of their rights and be satisfied with the meagre incomes they are given.
We are currently looking at different entrepreneurship models. Many songwriters—many of whom are also singers nowadays—are turning to self-production in order to keep part of their rights and also earn as much money as possible.
Rather than transferring all of their rights, they give licences, but that practice is not yet current in the publishing world. As long as the situation does not change, the fate of songwriters will not truly improve.
However, as I said, if the private copy regime had evolved with technology, the millions of copies that are made on tablets and telephones, which have replaced the compact disk and the cassette—which were around when the regime was created—would generate more royalties, which would help the songwriters.
In the current state of affairs, you need millions of views or hits on YouTube or Spotify before you can generate royalties of $150. Where is justice in that for a music creator? Without their creative activity, no one would have had any work to develop. The singer is certainly important, but he or she would have had nothing to sing if the songwriter had not created the work. The producer of sound recordings could not have produced anything had the work not existed.
It seems people want to relegate the concept of creation to the back burner. For a 10-song album, only one dollar will be paid to the creator, despite a total sale price of $15, $16 or $20—albums may only cost between $10 and $15 these days, those that still sell. I'm sure we all agree that that is not enormous.
We're suggesting that transition, because there is the technology now for you to be able to record directly to the network. The technology is there, but the innovation to do so has been very slow to come to market because of the associated risk for the network provider.
We're suggesting that if there were changes to the act to make it such that we wouldn't incur additional liability, we would bring that innovation to the market.
With regard to your own storage space that you would normally have on your individual hard drive, imagine that you had that up in the cloud, except as the cloud operator, rather than having all of those individual storage spaces, which could mean so much storage....
Of course, there is a cost to that, not only for the the network provider but also from an environmental perspective. The storage space needs cooling and all kinds of electricity usage, so there are various elements of inefficiency here that we're trying to address.
All the things that you store on your own hard drive at home, you would store in the cloud. The cloud operator would then streamline things in the back office. You wouldn't even know. If you record, you retrieve it more or less in the same way. Whether or not it's on your personal drive or in the cloud, it would be seamless to you. On the network side, seamless to the consumer, the network operator would put things together and would not have to save millions and millions of copies of the same thing.
There are ways that we can ensure, with metadata and other information that's saved from someone's individual recording, that if they came in five minutes late or five minutes early—however people wish to record—we'd only be delivering what it is that they've recorded. This type of information can be saved without saving a whole new copy of the same thing.
No. Netflix is different.
Netflix is more like our video-on-demand service, where we have negotiated rights and you as an individual haven't decided to record something.
Under the current Copyright Act, you are entitled to record something on your own device or on a network. Netflix or our video-on-demand service is taking that obligation away from you and offering you a service. If you forget to record or you don't want to be bothered to pre-record things, we will offer you the service—access to this library of great content—whether it's through Netflix or the individual video-on-demand services.
The difference there is that those rights are negotiated with the rights holders, and they act independently from the current right that exists now. You still have that option to record on the cloud, whether it's on the cloud or on your own personal hard drive. Those things currently exist independently.
All we're asking is that in the back office of our network operations, we not be forced to do things in such an inefficient way that it makes the service way more costly than it needs to be.
For television, we pay royalties to the directors, even for the initial use. Those royalties come from the revenues we receive from the broadcasters. That is part of the basic licence that the directors give us. For television, it's a little different from what was explained about feature films.
It's important to emphasize that for feature films, the producer has investors, and the amounts he receives must first of all go to the distributors. The first revenues go to the distributors and to the venues that distribute the works. Afterwards, what the producer receives has to be given to the investors, such as the Canada Media Fund or Telefilm Canada.
When there is money left, it is shared between the screenwriters and the directors. It's a fact that the revenue generated by the producer will be given first to the granting organizations.
I joined CAPAC when I was 17 and went on the road. That became SOCAN. I won't say how many years ago I did that. Over the years I've received revenues from television, book publishing and music, and I'm still involved.
I find the question with music, Madame Dupré, very interesting, because there have been some very good upsides from the digital revolution. The cost of recording dropped substantially. We used to spend almost all our money on lawyers' fees and we never saw a dime, because of all those recoupables they charged to our account. If the record companies didn't want to stock you, there went your product. Now you can stock it yourself online, so there's an upside.
The downside is the disappearance of live music across the country, with bands being told they have to use T-shirts to pay to tour now. Twenty years ago people would have laughed at that.
Then on the revenue streams, we've lost the private copying levy, the royalty mechanicals from radio, and musicians are suffering a continual drop in income. Now Spotify is the latest; there you get, I think, .0005¢ for every thousand plays or something.
I don't know of any other artists' sector that faces such uncertainty in its remuneration stream. There are good opportunities in the digital realm for musicians, but there are also still a lot of pitfalls. How would you describe the reality for working artists today in the music world? Where do we need to start finding some level of coherent remuneration?