Evidence of meeting #15 for Canadian Heritage in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was publishers.
A recording is available from Parliament.
11:45 a.m.
Conservative
March 27th, 2014 / 11:45 a.m.
Conservative
Ray Boughen Conservative Palliser, SK
Mr. Chair, let me add my voice of welcome to our panel for taking time to share their thoughts with us this morning. We certainly appreciate their input.
Coming back to the technology question, and any member of the panel can feel free to answer this, I heard what was said about technology and what is happening. I'm wondering how digital technology affects songwriters and composers.
Can you expand a little on the ways that technology is affecting the music industry?
11:45 a.m.
President, Canadian Music Publishers Association
It's devastating. The way the songwriter is paid, with SOCAN anyway, is from the performance, and so at radio you get x number of dollars or cents from each play. It can be substantial if you get to a certain number of plays and rotation and what have you. You used to be able to maybe make a living. Now with streaming, even on a paid subscription service, each play is worth micro pennies, 0.005¢. It's hard to make a living on micro pennies.
11:50 a.m.
President, Canadian Music Publishers Association
Yes, even when you're in the top 10 it's virtually impossible.
There are a couple of great articles written by artists who explain that as big artists they would make a decent living; maybe collectively for the whole band they would bring in $250,000 for the year to be split among four or five people. Now for that same record, which consistently made that much money, it is maybe a couple of hundred dollars.
The impact is substantial. When these services come in and we lose the income, it hurts all of us. It hurts the songwriter and goes all the way up.
11:50 a.m.
General Counsel and Head of Legal Services, Society of Composers, Authors and Music Publishers of Canada
If I could add to that, compounding the difficulty is that we have the advent of these new services, which are a new source of music for consumers. One can see some positives in that. On the other hand, what is also happening—and in the case of SOCAN, this is quite noticeable—is that what have traditionally been advertising base platforms, such as commercial radio stations and television, now see themselves in this new world in which there is a new platform. As you would expect, it is affecting their ability to generate as much in advertising revenues as they used to. There's a shift going on.
When you have a tariff such as the SOCAN tariff for commercial radio stations based on a percentage of revenue, if the revenue pie on the traditional side starts decreasing or flattening out, that change obviously has a negative impact on the revenues that are generated for SOCAN members.
The challenge, and this is what we're working hard at, is to be sure that as the new digital platforms continue to grow and develop we get a fair share of that new market. That is proving to be very difficult, given the particular business models currently being developed on the digital front.
We're working hard to get good rates, reasonable rates, as established by the Copyright Board in our case, but it's very difficult to do so in this new environment, in which in some cases these services are still in their very initial stages and many are not yet available in Canada, in fact.
11:50 a.m.
Conservative
11:50 a.m.
Conservative
Ray Boughen Conservative Palliser, SK
I guess you've answered this one: how can the adoption of digital technology be an asset to the development of the music industry? It almost seems like a detriment rather than a development.
May we have your thoughts on that?
11:50 a.m.
General Counsel and Head of Legal Services, Society of Composers, Authors and Music Publishers of Canada
It's very much a two-edged sword for some of the reasons I've just explained. In the short term, the greatest concern is whether, if you don't start getting from the outset, in the SOCAN case, reasonable tariffs and manage to negotiate reasonable rates, you ever get to catch up and how long it will take to ever catch up. If at the same time you're losing revenues from traditional streams, then at the end of the day it may be a two-edged sword, but you're left more with the negative side than the positive side of it, certainly in the short term.
11:50 a.m.
President, Canadian Music Publishers Association
I agree. As the dollars decrease, we need to be doing these deals faster. There is a lot of negotiation, but much of this happens through the Copyright Board.
It's important that the Copyright Board move a little faster. We have a thing called the private copying levy, which was introduced in 1996 and wasn't put into effect until 2004. We can no longer afford to wait 10 years for a tariff to be put in place. That tariff was enacted for cassette tapes and by the time it was actually put in place, we were into digital downloading. We have to have faster movement.
11:50 a.m.
Conservative
11:50 a.m.
President, Professional Music Publishers' Association
Mr. Boughen, may I comment on this?
11:50 a.m.
President, Professional Music Publishers' Association
I have a comment on how quickly the Copyright Board of Canada responds.
The promptness of response remains critical for rights holders and for users because, clearly, it creates uncertainty. For right holders, this leads to delays in royalty collection. That can jeopardize our companies.
The market has changed quickly. Our business models used to be simple, but they have since proliferated. I feel that the Copyright Board of Canada is not being provided with the resources it needs to adapt, as the situation has changed very quickly. The board is not provided with sufficient resources.
So rights holders and users are suffering the consequences because this situation creates uncertainty for them.
11:55 a.m.
Conservative
11:55 a.m.
Conservative
The Chair Conservative Gord Brown
That is it.
Witnesses, I would like to thank you for your contributions to our study.
We will briefly suspend while we bring in the new panel.
Noon
Conservative
The Chair Conservative Gord Brown
We'll call the meeting back to order.
Members may recall that a few meetings ago we had some votes that kept our witnesses from being able to appear. They are here now.
From Library and Archives of Canada, we have Hervé Déry, acting Librarian and Archivist of Canada, and Cecilia Muir as well from the Library and Archives Canada. In addition, we have Scott Hutton and Annie Laflamme from the CRTC.
Both groups have eight minutes each for their presentations.
We'll start with Library and Archives Canada for eight minutes, and hopefully we won't have any bells.
Noon
Hervé Déry Acting Librarian and Archivist of Canada, Office of the Librarian and Archivist of Canada , Library and Archives of Canada
Thank you.
Good afternoon, everyone.
Thank you for the opportunity to address the committee today.
My name is Hervé Déry, and since May of last year, I am the acting Librarian and Archivist of Canada. With me today is Cecilia Muir, our chief operating officer.
Library and Archives Canada has the unique mandate to acquire, preserve, and make available the documented heritage of Canada, including records of historical value of the Government of Canada. This documented heritage is rich and vast, and Canada's musical heritage is an important part of our unique collection.
As you know, LAC is not an organization that has a role in funding our national musical industry, nor does LAC play a direct role in terms of composition, performance, and production of Canadian musical culture. However, Library and Archives Canada does occupy an important position in the context of Canada's music industry because of our mandate as a memory institution. It is through LAC that the federal government actively supports acquisitions, preservation, and ongoing access to Canadian musical documentary heritage and achievements. The legal deposit ensures that we have a comprehensive collection of the Canadian music production.
We all know that most musical trends come and go from one generation to the next, popular performers rise and fall, and the technical changes domestically affect how music is recorded, delivered, performed, and consumed from year to year. As we did with cultural changes, one constant is the LAC mandate to collect and provide access to our heritage now and in the future.
The works produced and recorded nowadays will represent the musical heritage of future generations. So it is LAC's duty to acquire and preserve them. Library and Archives Canada is a trusted source for musicians, researchers and members of the public who are looking for information on Canada's musical heritage.
I would like to give you an overview of our long-term stewardship for Canada's music industry.
The LAC collections document all aspects of the industry. We have some 200,000 music recordings in all conceivable media—discs, punched tapes, reels, eight-track tapes, digital recordings, and so on.
We have some personal documents that belonged to famous artists such as Glenn Gould and Oscar Peterson, as well as documents produced by orchestras, record labels—like Compo, Canada's first independent record company—and many other people and groups from Canada. We also have published documents, such as books, music reviews, newsletters and magazines, from the 19th century to today.
LAC has acquired sheet music dating back to the 18th century, a collection amounting to over 20,000 songs, piano pieces, religious music, and parlour songs, including music by Canadians about Canada published around the world. This collection has been digitized and is accessible free on our website.
We also have an important collection of aboriginal music and song recordings. Many of these recordings are also available on LAC's website, including recordings from first nations, Inuit and Métis artists, and from the recording label that produced their work from the 1970s to the present. LAC also provides access to a Canadian music periodical index database, which contains almost 40,000 entries on articles dating from the late 19th century to the present day, from over 600 Canadian music journals, newsletters, and magazines.
Among the most important of these music journals was RPM Weekly, which began publication in February 1964. The goal of this magazine was to foster and promote a dynamic Canadian music industry. The publication ran for 36 years and helped shaped the face of Canadian music, including the establishment of Canadian content regulations and the creation of the Gold Leaf Awards, later renamed the Junos, and the Canadian Country Music Association Awards. LAC has digitized every shot of the top hits printed by RPM Weekly, about 10,000 shots, and this information is free and accessible online.
Another popular resource is LAC's virtual gramophone database, which contains information, images, and recordings from more than 15,000 78 rpm and cylinder recordings released in Canada, as well as foreign recordings featuring Canadian artists and compositions.
In addition to many online resources, our reading room on Wellington Street in Ottawa is equipped with audiovisual stations where researchers can access the musical heritage.
As far as preservation goes, every year, we make audiovisual migration part of our basic activities. We want to ensure that any content recorded in at-risk formats is transferred to stable and accessible media. We have already migrated over 50,000 hours of audio and visual recordings.
Another part of LAC's mandate is to serve as the continuing memory of the federal government. We receive and preserve federal departments' and agencies' documents of historical significance that support artists and entrepreneurs who create and broadcast music in Canada. Those government information sources document the policies and decisions that have helped Canada establish a thriving music culture and a world-renowned music industry. Library and Archives Canada will be pleased to continue acquiring, preserving and making accessible Canada's musical heritage.
Thanks again for the opportunity to speak before the standing committee on this important issue. We will be happy to answer your questions.
12:05 p.m.
Conservative
The Chair Conservative Gord Brown
Thank you very much.
We'll move to our friends from the CRTC, Mr. Hutton and Ms. Laflamme.
12:05 p.m.
Scott Hutton Executive Director, Broadcasting, Canadian Radio-television and Telecommunications Commission
Thank you, Mr. Chair, for inviting us to meet with your committee today. You've introduced Madam Laflamme. She's our director of radio policy and applications.
We welcome this opportunity to explain the many ways the CRTC is helping to foster a diverse radio sector in this country, and how this sector in turn contributes to Canada's music industry.
Today Canadians have access to over 1,150 commercial, public, campus, and community radio stations that offer a variety of formats in English and French as well as in many other languages.
Although the results are only preliminary at this point, it appears the commercial radio industry maintained the course in 2013. These stations have reported total revenues of $1.62 billion and pre-tax profits of $331 million. I would caution, however, that these totals may well change once they are finalized.
Competition for new licences is an additional indication of the sector's vitality. In the last two years the CRTC has issued close to 50 new radio licences. These applications are a vote of confidence in radio's future.
Another positive sign is the success of Canadian performers. Many Canadian artists are now household names around the globe. We see them perform on the world's biggest stages and hear their songs in films and TV shows. We feel a sense of pride when they are nominated for Junos or Félix awards, or the Grammys in the U.S., and even les Victoires in France. We sometimes forget that most of these artists got their start right here on Canada's airwaves.
Over the years the CRTC's regulatory policies and licensing decisions have supported and helped to promote Canadian music. For example, 35% of the songs played by English-language commercial radio stations must be Canadian.
French-language stations have an additional requirement. They must ensure that 65% of the songs they broadcast are in French.
Back in 2006, the commission adopted a new approach for the commercial radio sector. We decided to put additional emphasis on the creation and promotion of audio content through the development of Canadian musical and spoken-word talent.
The revised policy requires radio stations to support FACTOR and MUSICACTION, which play an important role in the development of Canadian talent, including new and emerging artists. Stations must also continue to make contributions to two funds that have been in existence since 1998—the Radio Starmaker Fund and Fonds RadioStar.
As a result, over the past 10 years, commercial stations have invested more than $280 million to support, promote and train Canadian musical and spoken-word talent.This approach is helping strengthen Canadian talent and enhance the quality of Canadian content on the market, in both English and French.
To ensure that Canadian music remains vibrant, it is important to feature new and emerging artists. All radio stations in the country are advancing this goal, but campus and community radio stations play an especially important role. To ensure that the latter have access to a predictable source of funding, commercial stations must now make annual contributions to the Community Radio Fund of Canada.
A 2013 report by Nielsen found that 61% of Canadians tune in to radio stations to discover music that is new to them. And nearly half of the new music they encounter is broadcast by a radio station. This is the highest share among all sources, including YouTube, the iTunes store and social media.
What's especially encouraging is that Canadians are keen to listen to made in Canada music. Polling by Canadian Heritage in 2012 revealed that 92% of Canadians strongly agree or somewhat agree that it's important that Canadians have access to music by Canadian artists.
This high level of interest is also reflected in the television broadcast of music award shows such as the Junos, the East Coast Music Awards, and le Gala de l’ADISQ. The CRTC has designated these shows as programs of national interest to help promote and market Canadian music, fuelling demand to hear it on the radio.
Of course, radio isn't the only way people access music today. Thanks to the multitude of online services available, music has become a commodity that can be packaged and delivered in countless ways.
According to the CRTC's 2013 “Communications Monitoring Report”, Canadians are listening to audio content on various platforms: 20% stream the signal of an AM or FM station over the Internet; 14% stream audio on a tablet; 13% stream on a personalized Internet music service; and 8% stream audio on a smartphone.
Younger Canadians in particular have been adopting these platforms in growing numbers. Even so, radio is still an attractive medium for many. People tune in to these stations for local news, the latest traffic and weather updates, and of course to listen to music or talk radio personalities.
Radio is no longer just about music. It's increasingly about being close to the audience, helping listeners connect to both content and people that appeal to their individual interests. Connecting with individuals and serving the local community is key to success in today's niche markets.
Canadian artists and the music industry as a whole have also had to evolve to keep pace with these technological trends. They are undeniably affected by these changes, sometimes adversely. But it is also true that technology can provide musicians with new opportunities to reach more people with great content that happens to be Canadian.
To be successful in today's marketplace, artists can no longer concentrate only on writing, recording and playing their music. They have to learn the business skills to manage their brand, as well as all aspects of their careers—from touring to marketing and promotion to maintaining an active social media presence.
We are sensitive to the issues facing both the radio and music industries in this fast-changing environment. We continue to work in conjunction with the radio sector and government to further strengthen Canada's music industry.
As the commercial radio sector has remained relatively stable in recent years, both financially and in terms of tuning, the commission is of the view that a comprehensive review is not necessary. Nonetheless, we believe the sector would benefit from an update of certain regulatory and policy elements.
So last October, we issued a call for comments on a targeted policy review for the commercial radio sector. The first phase of comments came to an end in late January. We are currently in the second phase of this process. It is premature to give you an update, as the record is still open.
That said, we would certainly be happy to discuss any other aspects of this presentation and to answer your questions.
Thank you.
12:15 p.m.
Conservative
The Chair Conservative Gord Brown
Thank you very much.
We'll now move to questions. Mr. Weston, for seven minutes.
12:15 p.m.
Conservative
John Weston Conservative West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you, Mr. Chair.
I would like to begin by thanking our guests for joining us today. I also want to congratulate Mr. Hutton, who is an executive director at the CRTC, for his proficiency in both official languages. That's wonderful.
I want to focus on the library of Canada.
Last week I visited that institution for the first time to do some research. LAC is an amazing resource that is accessible to all Canadians. I don't think we are using it enough. The collection contains 200,000 items.
How are Canadians being informed of LAC's contents, not only by us, parliamentarians, but by everyone? How could the collection be used more?
12:15 p.m.
Acting Librarian and Archivist of Canada, Office of the Librarian and Archivist of Canada , Library and Archives of Canada
I'm glad you enjoyed your visit to the Library and Archives of Canada.
Our collections are increasingly becoming available online. That's now how the vast majority of people are accessing our materials. They go directly to the LAC website and, from there, they can browse our sites. We do not proactively advertise our websites much, but the trend shows that Canadians are using them more and more. So we are becoming increasingly well known. I think the situation is positive when it comes to that.