Canadian Heritage Committee on May 4th, 2010

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Do you agree with the CRTC...?

[The Chair, Conservative, Gary Schellenberger]

Madame Lavallée, your time is up.

We have to move on now to Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

They can call it the pipes, they can call it whatever they want, but the reality is, when they put the satellite to a CBC deal, and there are 100 stations—and we have three English, two French, or two English, one French—and we're told those will get North American distribution, all my people travelling across the country can listen to the Playboy station any time they want, but they can't listen to any Canadian content.

Madame Samson, my concern is maintaining the rights with the cable giants, the television giants. They are becoming more and more vertically controlling and they've sent the message. Mr. Péladeau told us very clearly he was into online content, he was going to control it all, end of story.

How do you maintain the balance, protect the rights of the creators, when they're now wanting all the rights online as well?

[Claire Samson]

Mr. Péladeau's plan has one great quality, it's clear. When he says he wants it all, he wants it all. Of course it worries us, because we think—in particular in Quebec we think—that the success of Canadian production, Quebec production, and of Quebec culture resides in the fact that it's very diverse. There are 150 companies producing cultural content. Over the years it has had a great effect on challenging others, improving the quality of productions that we've been doing, which we can compare with the quality of production anywhere in the world. We're very proud of that, but it's the diversity that allowed us to become such a great market. So of course we want to preserve the diversity, holding the rights.

Of course I understand the companies. The unknown scares everybody. Independent producers cannot make business plans five years ahead, because we're financed project by project. Nobody knows what's going to happen or not happen five years from now. Broadcasters are experiencing this now: how will the commercial revenue evolve? They want to make sure they capture all of the potential money for a product. It's something we'll have to fight about with them. Of course, we think that in our industry the fact that there have been regulations and the CRTC and certainly over the last 40 years a political will to preserve diversity of expression.... I'm sorry to say to Mr. Péladeau that I don't think he will win that one all the way.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

Mr. Kee, I did a press conference in December with U.K. rocker Billy Bragg. He was talking about the phenomenal change in the music industry—all the record stores that used to be are gone. He said that as much as he'd like it, the Wii is not going back in the box, that kids today are spending their money in a wholly different, new market. And your market is the one that has cleaned up. I come from rock and roll. I would prefer them listening to, living, and dreaming rock and roll, but it's games. It's phenomenal.

We were hearing earlier, in one of our other hearings, that these worldwide centres for games are very much clustering in the traditional art centres of Canada—Montreal, Toronto, Vancouver—and that there seems to be a convergence between the rise of gaming culture and where we've been traditionally strong, in television, culture, film, etc. Can you explain why these centres are growing and are so strong?

[Jason Kee]

I think there are many different reasons for it, and the core one is the one you touched on. It's that these are the centres, the creative clusters, that have been creative clusters. They have a culture and a lifestyle that is extremely attractive to the creative classes, which are also the classes who make games. The only difference between a traditional artist and a game maker, particularly one who is working on the art side as opposed to the programming side, is that they work with digital media as opposed to more conventional media. So I think there's been a strong attraction.

I think it's also that the centres, particularly urban centres, are not only where artists tend to congregate but where digital technology is more readily available, although that's not always true. Many of the institutions tend to be centred around there. We've been producing a lot of fantastic graduates.

Something that's important to say is that we strongly believe, and clearly a lot of other witnesses are in agreement on this, that we should seriously consider introducing a federal digital media tax credit to help support and incentivize investment. All this being said, the provincial programs that have been in place—in Quebec, which pioneered it, and then Ontario, and B.C. is now talking about one—are programs that don't work unless you actually have the talent already there, unless the ground has already been fertilized. The digital tax credit is just providing the investment to help it grow. I think these are the centres where you have these creative classes grow.

[The Chair, Conservative, Gary Schellenberger]

Mr. Angus, be very brief.

[Charlie Angus, NDP, Timmins—James Bay, ON]

One of the concerns I've had involves the issue of safe harbours. It would certainly throw a huge wet blanket on development of cable and Internet if those safe harbours didn't exist.

You're saying your industry is willing to work with them if they are willing to work with the concerns of the industry. Can you explain that?

[Jason Kee]

Absolutely. Essentially, it's critical that ISPs have safe harbours, and when they are not promoting or actively inducing infringement that they have an opportunity to escape liability. They shouldn't be liable for merely acting as conduits.

We are particularly sensitive to this issue, because as much as we are producers of content, we're also platforms. Microsoft has Xbox LIVE Arcade, Sony has the PlayStation network and so forth, and we are the ones who would receive these notices in the event that infringing content was made available. With the rise of user-generated content and the way that we, as an industry, have worked to kind of actually incorporate this kind of user content itself into games, it makes us very alive to these issues.

This is why we're strongly in favour of a safe harbour, but one with the appropriate conditions on it, which would essentially actively provide appropriate incentives for the industries to come together and work together to develop solutions that benefit all stakeholders. Those are actually the kinds of solutions we've been seeking. Because of the state of copyright, we've been in a bit of a deadlock, and we're looking to try to actually break through that.

[The Chair, Conservative, Gary Schellenberger]

Okay, and because we don't have time for another round, this will be the last question. Is it going to be split?

Okay. Ms. Grewal, go ahead first, please.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

Mr. Chair, I'll be sharing my time with Mr. Galipeau.

I would like to thank the witnesses for coming, for their presentations, and their time.

Mr. Kee, can you please expand on how the entertainment software industry uses technological protection measures?

[Jason Kee]

Absolutely. First and foremost, they're used to protect our products against piracy, which is of course why they were initially designed. In fact because we've always been a digital industry, we've always dealt with the issue of piracy. It's just that the introduction of the Internet and the online marketplace have just exploded that to an exponential degree.

However, because we have longstanding experience with these measures, we actually have used them to implement all sorts of different models. Not only do they protect against piracy, they are actually used to differentiate our products. So for example it's TPMs that make a trial version of the software available to you. You can test it out and decide whether you actually like it, and then decide to purchase it later on.

TPMs are also used to implement parental controls. This goes to Ms. Dhalla's point with respect to making sure that children aren't getting access to inappropriate content. While all the consoles have parental controls built in, which permit parents to actually prevent their kids from accessing inappropriate content, it's the TPMs that actually permit this to happen.

[Nina Grewal, Conservative, Fleetwood—Port Kells, BC]

What benefits have come out of these protection measures?

[Jason Kee]

The TPMs are one of the cornerstones on which our industry is built. They've significantly contributed to the success of our industry, because they allow us to offer a wide array of differentiated products that benefit consumers. So if you want to get a trial version of a game, if you just want to rent a game for a short period of time, or if you want to buy it, they actually allow for all of these options.

[The Chair, Conservative, Gary Schellenberger]

Mr. Galipeau, would you like to complete the time?

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Thank you very much, Mr. Chair.

My questions are first for the representatives of the Association des producteurs de films et de télévision du Québec, whom I very much thank for their presentation.

Before starting, I have a comment. Ms. Doucet referred to Quebec and Canada, as though the one excluded the other. Until further notice, the geography of those two is—

[Brigitte Doucet]

That was not my intention... I didn't notice.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

It would be more appropriate to say “in Quebec and elsewhere in Canada”.

Ms. Samson, in the APFTQ's view, does widespread access to the Internet promote or reduce the consumption of Canadian content?

[Claire Samson]

As content providers—and you talked about this a little earlier with the other group—we don't have a position of seeking to flee the reality or to go backwards. I think it's important that Canadian artists and producers be present in the new media since the attraction of our culture is at stake. We have to have the means to do that and to do it with quality.

What we fear about the Canada Media Fund is that we go the Internet route simply for the sake of going the Internet route; if the quality isn't there, the objective won't be achieved. Canadians won't access Canadian works if we can't establish quality criteria and very high quality standards, as they have been used to high-quality standards in television. We think we have to be there.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Mr. Chairman, I very much appreciate the presentations that were made by our guests today.

The other questions that I was going to ask require too much detail for the time we have left. I would like to ask your permission to direct my questions to the clerk so that he could transmit them to the witnesses. They might wish to respond to them, let's say, within 30 days.

[The Chair, Conservative, Gary Schellenberger]

That would be very good.

[Royal Galipeau, Conservative, Ottawa—Orléans, ON]

Ms. Samson and Ms. Doucet, thank you very much.

Thank you very much, Mr. Kee.

[The Chair, Conservative, Gary Schellenberger]

Go ahead, Ms. Dhalla.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

I also have a request that could be directed through you, Mr. Chair.

With regard to the digital literacy program component that Mr. Lee had spoken about, if he could also forward some information to the committee, it would be helpful for us to use in our particular ridings as well.

[The Chair, Conservative, Gary Schellenberger]

Okay. Thank you for that.

I appreciate the presentations today. Your answers were great. Thank you.

The meeting is adjourned.