Evidence of meeting #7 for Canadian Heritage in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was film.
A recording is available from Parliament.
11:10 a.m.
Conservative
The Chair Conservative Gary Schellenberger
I'm going to call the meeting to order. There are still a few more people to get here, but I'm sure they're on their way.
Welcome to the Standing Committee on Canadian Heritage, meeting seven.
11:10 a.m.
NDP
11:10 a.m.
Conservative
11:10 a.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Just quickly, I will not be able to stay until the end. I don't want to be disrespectful to anyone, so I'll let you know now why I have to leave.
Second, Mr. Chair, we live in a cutthroat, partisan world. We kick sand in each other's face all the time. Nobody ever congratulates someone from another party. But I want to congratulate you for your role as chair here. You've done excellent work over these years. Because of your vote the other day, we managed to get the copyright levy discussion into the House of Commons, and it passed last night.
I think you stood on the principle of supporting artists. I want to thank you for the work that our committee does, and particularly you as chair.
11:10 a.m.
Some hon. members
Hear, hear!
11:10 a.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
So with that, do I get seven minutes on my round of questioning?
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Some hon. members
Oh, oh!
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Liberal
11:10 a.m.
Conservative
11:10 a.m.
Some hon. members
Oh, oh!
11:10 a.m.
Conservative
The Chair Conservative Gary Schellenberger
Anyway, I must say that, again, we'll carry on...that intervention.
Pursuant to Standing Order 108(2), we are continuing our study on the emerging and digital media, opportunities and challenges. Today our witnesses are from the Association nationale des éditeurs de livres, Aline Côté; from The Mark News, Jeff Anders; and from EyeSteelFilm Inc., Brett Gaylor.
Welcome to our witnesses. This meeting started at 11:10. It will run till 12:40.
Ms. Côté, go ahead, please.
11:10 a.m.
Aline Côté President of copyright and Editor, Association nationale des éditeurs de livres
Good morning. Thank you for this opportunity to speak to you on the digital revolution and its impact on the book industry. Before going any further, I want to thank you personally, Mr. Chairman. I was not aware that you had played such an important role about the vote that was held yesterday. You will soon understand why it will also have a significant impact on the book industry.
11:10 a.m.
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
Mr. Chair, even though I too am very pleased with the way you voted here, the problem is that you did not vote the same way yesterday. I wanted to put that on the record.
11:15 a.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
The vote was applied. Cut the guy some slack. He made it possible. His vote brought it home.
We want that on the record, that it was Gary Schellenberger who helped us get that through.
11:15 a.m.
President of copyright and Editor, Association nationale des éditeurs de livres
Our Association was created in 1992 and represents about 100 French-language book publishers of Quebec and Canada. French-language book publishers represent close to 7,000 titles and have annual sales of about $850 million, which is a rather significant amount for authors.
I have prepared my statement according to your seven questions but I will answer them under three main sections. First, I will speak about what I consider to be the three stages of the digital era, each having had an impact on our industry, especially on our capacity to benefit from all those new technologies for the development of our authors.
In the first stage, the digital era represented a challenge to our marketing methods, It introduced new players, such as online bookstores like Amazon. Fortunately, it would seem that books are one of the most widely purchased items online, just after sex and close to CDs. So, at the very beginning, this new technology simply created a new shop window for physical books. During this presentation, I will refer to the various formats of our books, that is to say physical books as well as books in other formats.
So, one may say that, in its infancy, the digital era was beneficial to the book industry. It extended its visibility and allowed new actors to set up shop. Also, generally speaking, those actors respected our business models, our selling prices, etc.
During that time, the role of publishers did not change. For those of you who do not really know what we do, we discover new talented authors, we help them in their development, we create quality books and we reproduce them. I want to insist on this last point because reproduction is specifically related to copyright. It is what copyright protects, that is to say our exclusive right to reproduce works in various formats and to market them. Of course, the publisher guarantees that all reproductions will respect the integrity of the work and will apply international rules for its identification, which means that cataloguing will be done according to established standards. Then, the work will be marketed according to a very specific process which you all know, first as a hardcover, then as a softcover and, sometimes, as a luxury edition. Very soon, all the other types of digital formats will be inserted in that chain which is a part of the right of publishers to market intellectual works covered by copyrights.
Naturally, after all that, and taking for granted that everything is done properly, the publisher is able to follow all the uses made of the work and is able to compile all the monies received from the sale of the work or of the rights. That is how the publisher is able to pay the authors on the basis of the real utilization of their works.
Let us deal now with the very important issue of digitization. We are now in the second phase of a process which started about five or six years ago. I am referring to large bandwidth, high-speed downloading, interoperability and, recently, MP3s and mobile equipment. All this has impacted the very role of the publishers and of the various actors of the book industry. It has allowed new corporations collecting billions of dollars from cultural content, good-faith users, pirates and even libraries to assume some of the roles previously reserved to publishers, that is to say the creation of formats, the granting of rights to third parties and even the usurpation of some of the functions traditionally reserved to bookstores and libraries.
Cultural industries have never had to face such a widespread incursion into their field of competence from a sector totally foreign to the realities of publishing. The results are well known. Even where legislation had already been updated according to the latest WIPO agreement on digital industries, piracy appeared. So, we have seen libraries digitize copyrighted books and make them available for downloading free of charge. This is being done in Canada but, fortunately, not in Quebec.
We have seen libraries become accessories to counterfeiting by authorizing photocopies of copyrighted works. We have seen copyrighted works being distributed on the intranets of teaching institutions, something that is very hard to control. We have seen equipment makers enter into the field of activity of libraries and bookstores. These days, any company producing e-book readers will immediately offer its clients a full digitized collection such as Kindle with 450,000 titles, the Sony Reader with 500,000 titles, and so on.
As a matter of fact, we have also seen Goggle take over nearly all the books in the world by digitizing millions of copyrighted books without authorization while imposing a new interpretation of the American fair dealing rule. Let me add that even the United States Copyright Office believes that this is a definite infringement of copyrights. Goggle is imposing its own definition of a book as well as a new statistical method of establishment of its selling price. In brief, these methods have really invaded the whole field of book publishing, including online bookstores, traditional publishing as well as book distribution.
If we accept the trend to convergence being imposed to all formats, we can expect to see very soon our books appear in audio formats, as MP3 files or on iTunes for 99¢ each. Books which might have cost up to $70,000 to produce and to market might soon be sold for 99¢ each. Audio books are now being digitized, most of the time. You can imagine how far this process of convergence might take us to see how much our industry is been impacted.
Furthermore, we, the publishers, believe that the digital era has led temporarily to a series of breaks in the system. I say temporarily because we were very quick to react and we are presently rebalancing the forces in play. Those breaks with the operating methods of the publishing world are the following.
Let me first emphasize that each revolution in the field of reproduction leads to this kind of imbalance which forces all the actors to redefine themselves over a given period of time. There has been a break in the identification of the works because, since everyone is digitizing them and making them available, we do not know anymore if the works that are being downloaded are exact copies of the originals. We are unable to assess the quality of what is on offer. We do not know if what is offered is complete versions of the original works and if the wishes of the authors have been respected. In short, there is a loss of quality and of traceability which is jeopardizing the moral right of the authors and our capacity to pay them according to utilization.
There is also a break related to the reliability of books and that, I believe, is very serious. Many people will probably have access to digitized books without being certain that they are dealing with the real original works. In losing control of the market, are we not losing the relationship of trust as it is happening today in the world of music? These days, musical works are reproduced so many times in so many different formats that people are going back to purchasing records because what they download on various types of platforms is of poor quality. The quality and integrity of the works which we were able to guarantee to the users seem to be of very little concern in the digital world, but there will be a price to pay in the long run.
The third break is related to the marketing system. We used to start by producing hardcovers and then to market pocketbooks when the original costs had been covered. We always tried to reduce the costs gradually. When books are new, they cost more. Then, marketing methods allowed us to make books more and more accessible by producing them in new formats.
Nowadays, the problem is knowing when in this sequence we will publish the digitized version of the book. Some have tried to do that at the same time as they published the hardcover version, and they recorded good sales. We know now that digital books are sold all over the Internet with equal sales volumes. They are the same types of titles, with the same best seller lists as for physical books. One cannot say that access to digital books has led to the development of new market segments. We always find the same titles on best seller lists.
Then, there has been a break between the cost of production and the selling price, which is a very serious issue for the industry and for its ability to protect jobs in the field of creation and, of course, to pay its authors. After 99¢ songs, we got $9.99 books on Kindle. More and more, this is a business model based on quantity, on volume. Sellers try to outdo each other on the number of books available, or the number of books offered with the purchase of their electronic reader, etc.
Historically, intellectual works have never been so accessible as today but everyone believes that there is an accessibility problem. We often hear it said that books are not accessible and that there is a problem of accessibility in the digital era. This is not true. Never have so many works be made available in so many formats. Taking into account all the other forms of marketing of books and of availability—from second-hand books up to the end of the chain—it is obvious that accessibility has never been so high. The problem is that people systematically confuse accessible books and free books.
Where...
11:25 a.m.
President of copyright and Editor, Association nationale des éditeurs de livres
I'm going too fast?
11:25 a.m.
Conservative
The Chair Conservative Gary Schellenberger
Could you perhaps come to an end? We have roughly ten minutes for each person.
11:25 a.m.
President of copyright and Editor, Association nationale des éditeurs de livres
How much am I into it?
11:25 a.m.
Conservative
The Chair Conservative Gary Schellenberger
I would like to have an hour for questions. Please conclude as quickly as you can.
11:25 a.m.
President of copyright and Editor, Association nationale des éditeurs de livres
Mr. Chair...
How much time did I take?
