Evidence of meeting #8 for Bill C-11 (41st Parliament, 1st Session) in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was copyright.
A recording is available from Parliament.
Legal Counsel, AVLA Audio-Video Licensing Agency Inc.
Yes, that is correct.
Conservative
Phil McColeman Conservative Brant, ON
I just don't want any misconceptions out there in the public realm about the fact that it is a symbiotic relationship that benefits both.
Conservative
Phil McColeman Conservative Brant, ON
It's mutually beneficial the way it currently stands. Of course, that's what we're trying to do here.
Conservative
Phil McColeman Conservative Brant, ON
We're trying to strike the balance of keeping that as harmonious as possible through this legislation.
Again, it was mentioned, I believe by your organization, that this represents 5.7% of revenues of a station. I'm saying a station; I mean broadcast revenues. Is that the accurate number?
Executive Director, AVLA Audio-Video Licensing Agency Inc.
Is it all right if I jump in here?
Executive Director, AVLA Audio-Video Licensing Agency Inc.
In the 2010 Copyright Board decision, when they set the rate, it was an effective rate of 5.7%, but they do take into account the size of the station, the amount of music that's played. For example, if you're looking at a small-market station, which the CRTC defines as having a market of less than 250,000, that rate is 0.59% of revenue, or about $700 per year.
When the Copyright Board looks at this, they do take into account those factors of size of market and use of music. And at the Copyright Board both parties come and present their cases, so whoever has filed the tariff, the rights holders, will present their cases, and then the broadcasters have the equal opportunity to come in.
It truly is an impartial judicial body.
Conservative
Phil McColeman Conservative Brant, ON
Right.
As your organization represents the creators, and you talked about the broadcasters receiving efficiencies in their operations because of the digital technologies, are you benefiting from those efficiencies as well, in terms of your business model?
Executive Director, AVLA Audio-Video Licensing Agency Inc.
I'm hesitant to speak to that, simply because as a collective licensing agency we're not in the business of producing the music and distributing it. Our role is to collect revenue for our members. I don't feel I'm qualified to answer that question. I'm sorry.
Conservative
Phil McColeman Conservative Brant, ON
Okay.
Perhaps another angle here is what we were told by a number of the broadcast representatives: they're receiving it in a form that they can't easily use; it's being sent out in a form that they have to have certain technologies with which then to transfer. It's not like a common digital technology that is integrated together with the people who are distributing.
Are you aware of that?
Executive Director, AVLA Audio-Video Licensing Agency Inc.
I can't speak to whether or not the delivery software is compliant with all of the stations. Every station could be using something different. What I can tell you is that when this music is delivered to the stations, it's at no charge to them. They're actually obtaining and acquiring their music at no cost.
NDP
The Chair NDP Glenn Thibeault
Thank you, Ms. Shepherd and Mr. McColeman.
Now moving on to Mr. Regan for the final five minutes of the first round.
Liberal
Geoff Regan Liberal Halifax West, NS
Thank you very much, Mr. Chairman.
Thank you to the witnesses for being here. Those five minutes are very short, so I'll get going.
Ms. Shepherd, I have to start with you because you mentioned Randy Bachman.
Liberal
Geoff Regan Liberal Halifax West, NS
He has a fantastic show on Saturday night on CBC radio. My wife and I often hear it and enjoy it thoroughly. He's been around for awhile.
Liberal
Geoff Regan Liberal Halifax West, NS
He may recall, or at least recall hearing when he was a kid, the idea I recall hearing about, that at one time radio stations not only got their 45s and their records sent to them at no cost, but arguably at one time they actually got what was called payola: they got paid to play. That's what we've heard anyway. I don't know if that's true or not. I suspect it may be.
We heard last week from Mr. Don Conway of Pineridge Broadcasting, who was telling us about the history of his experience and the situation of his very small radio station, the troubles they're having, the difficulty they have. They just broke even last year, he said. He's saying the costs of ephemeral rights, or the licence fees they're paying, have been going up and up and up.
The other thing he mentioned is the 30-day exemption. He talked about, as you mentioned, this question of having to roll over the copies they have every 25 days.
It sounds as if there's no value to them, actually, of this 30-day exemption in practical terms in the way they use the music. Yet his concern is, how does a small station survive, and what should the right balance be?
What is your response to that kind of concern? Then I'll ask Ms. Saxberg to add her comments.
Executive Director, AVLA Audio-Video Licensing Agency Inc.
As I just mentioned, when the Copyright Board looks at ability to pay, which they are obliged to do, they would look at a small market station. You're paying 0.59% of your revenue and it's a cost of $700 a year.
Let's say that music is 80% of the raw material you're programming. I think $700 a year is a pretty sustainable rate for that amount of content, which is then going to attract your advertising dollars as well.
Liberal
Geoff Regan Liberal Halifax West, NS
Ms. Saxberg, this bill provides—sort of—that if you want to format shift, for instance, put some music that you have on a CD, or whatever, onto your iPod, you'll be able to do that—
Liberal
Geoff Regan Liberal Halifax West, NS
—unless of course there's a digital lock on it. The idea basically is that if you pay once you should be able to do whatever you want with it.
The radio stations argue that they've paid once for the licensing fee and therefore they should be able to do other things with it, such as format shifting.
What is your response to that?
Executive Director, Canadian Music Publishers Association
When you say they've paid once—
Liberal
Geoff Regan Liberal Halifax West, NS
In other words, their argument is that they've already paid for this music with the licensing fee.