Canadian Heritage Committee on May 1st, 2014

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Mr. Bissoondoyal, could you respond to Mr. Mortimer-Lamb's suggestion?

[François Bissoondoyal]

If it's possible, I would like to add something about what I said earlier about streaming.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Yes, go ahead.

[François Bissoondoyal]

I would like to clarify that we are not against systems for listening to music online. They exist already in Canada, like Deezer and Rdio. Spotify is not here yet. It must be understood that, in this business model, royalties are not high enough to replace the loss of record sales. I am not saying that we have to eliminate these systems, quite the contrary. However, perhaps this way of using music could be adapted to make it more sustainable for Canadian businesses.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Mr. Chartrand, what do you have to say about that?

[Alain Chartrand]

This is not the area I usually work in, but the proposal is interesting. It is important not to forget the royalties for creators. I do not know exactly what kind of impact this would have on royalties for creators or if it would considerably improve the current situation.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Mr. Mortimer-Lamb, for the creators of music, would your system be helpful or not?

[Simon Mortimer-Lamb]

I think we need to take a step back and look at it. We're talking about a world that was a unit-sale world. This is about monetizing consumer behaviour. In the old world, you would go out and spend $10 or $15 on your CD of the artist. That artist might never see that consumer again in a commercial transaction. With streaming and what I would characterize as a pay-for-performance model, every time that consumer interacts with the content of the artist, the artist is being paid.

If you think about how many times you have listened to your favourite albums over the decades, that's a significant return, and a recurring return, for that artist. We have to get away from the concept of the one-time sale. That's gone. I understand that we're talking about pennies here, but we can talk about a lot of pennies from a lot of people for a lot of periods of time. I have an artist in Canada who hasn't released an album since 2006 and is still generating great income, both on digital downloads and on streaming. That's significant.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Thank you very much.

[The Chair, Conservative, Gord Brown]

Thank you, Mr. Dion.

Now I'll go to Mr. Boughen for seven minutes.

[Ray Boughen, Conservative, Palliser, SK]

Thank you, Chair.

Let me add my voice and welcome you to our panel. It's nice of you folks to give us your time and to share your thoughts with us.

Claude, I have a question for you. Do you think an organization like FACTOR, which is a third party, should be responsible for managing CMF funding? What do you think of that?

[Claude Fortier, Project Manager, Observatoire de la culture et des communications, Institut de la statistique du Québec]

I cannot really add anything to this topic.

[Ray Boughen, Conservative, Palliser, SK]

Okay. Let me turn to Alain.

With 28 years of experience in the music industry, Alain, I'm sure you can handle that.

[Dominique Jutras]

I want to make sure I understood your question correctly. You are asking whether the Canada Music Fund is a good program.

There is a healthy volume of music being produced in Canada so far. That is the case in Quebec in particular. We are looking specifically at the industry in Quebec. The production volume has remained steady and is increasing. That is how it is.

There is a problem on the consumption side. The market is changing. The way people consume music is changing at a basic level and this has a significant impact on that part of the file.

I believe it is important to continue to support production and content. It is essential.

[Ray Boughen, Conservative, Palliser, SK]

Can you please explain what role the music publishers play in the development of the career of a songwriter or a composer? The world has changed in music over the past number of years, which is particularly true with digital.

Steve or Simon, what do you think of that?

[Simon Mortimer-Lamb]

Is that in the context of the value added of the publishers? Is that the question?

[Ray Boughen, Conservative, Palliser, SK]

Yes.

[Simon Mortimer-Lamb]

Publishers play a vital role, from the concept of working with their songwriters to getting their songs placed with other recorded musicians. That can be an international focus.

For our Canadian songwriters, we're getting them into co-write scenarios. We're getting their music in front of major labels like Warner to have their songs picked up for a major artist.

In addition, our publishing company employs a film and TV licensing team. We're able to work with songwriters to create works that are used in film, television productions, and advertising, which generates licence fees and performance royalties every time that song is played in those productions.

Publishers have a huge role to play in creating value.

[Ray Boughen, Conservative, Palliser, SK]

Okay.

Steve, if we look at the digital technology, how is that affecting songwriters and composers?

[Steven Kane]

Again, as Simon pointed out, I suppose it's affecting them in that the more platforms we have, the more points of entry that people have into music, the more touchpoints they have, the greater the chance of consumption, continued consumption. It's all about access. The digital infrastructure, the digital framework, becomes just as key for a non-performing songwriter as it does for a self-contained artist who writes and performs his or her own material.

It's all about access. It's all about the opportunity for artist discovery, song discovery, and repeat business.

[Ray Boughen, Conservative, Palliser, SK]

Thank you.

Chair, given the constraints of time, I'll go back to you.

[The Chair, Conservative, Gord Brown]

Well, you still have almost three minutes, if you want to use it.

[Ray Boughen, Conservative, Palliser, SK]

Oh, okay. I will. Thank you.

Continuing on with digital technology, how can the adoption of digital technologies be an asset to the development of music history? We don't produce singles anymore. We hardly produce albums. We plug into the machine in the car or the kitchen of the house and you can hear a couple of hundred musical items inside of a couple of hours, and it hasn't cost you any money.

What's the answer to that, Steven?

[Steven Kane]

I'm not going to immediately be contrary, but I am going to be contrary.

It's actually the exact opposite, sir. We create singles. One of the most fascinating things to me about the emergence of the digital music world is that in so many ways it's kind of back to the future. It's a song-based world now.

Again, it goes back to what Simon said earlier. We may be talking about pennies, but those pennies can add up. Once you get to a real critical mass of subscription services and millions of Canadians signing up to a service like Rdio or Spotify, what have you, that consumption goes up, and it's driven by the song.

You're correct that there are still a lot of services out there, a lot of ways to access music that are free.

YouTube was referenced earlier today. YouTube ad revenue is one of our fastest growing sources of revenue. It's up to us to monetize it properly. It's up to us to learn how to market our artists through these services and to continue to produce and introduce compelling world-beating content, and to encourage companies like the one I work for, Warner Music Group, to put Canadian artists on par with anybody around the world because, by God, they are on par.

The more we can invest in that and the more we can continue to bring that content to the world, when you plug in that machine in your kitchen, sir, you're going to be pulling up Meaghan Smith, the Barenaked Ladies, and Blue Rodeo. And they're going to get paid for it, and I'm going to get paid for it, and I'm going to continue to invest in artists in this country.

I hope that wasn't too contrary.

[Ray Boughen, Conservative, Palliser, SK]

No, not at all. It was good to hear.

We've heard from a number of witnesses who said there's no money to be made in singles, that it's minuscule dollars. It's good to hear the opposite side of the coin.