Evidence of meeting #9 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 artists.
A recording is available from Parliament.
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
Getting back to the notice and notice system, do you favour it over the three strikes law or graduated response principle?
President, Canadian Recording Industry Association
I think we're at a stage in our copyright evolution that contemplating something like a graduated response.... I think “three strikes”, by the way, is one of those terms that has been applied to it. It's like a pejorative term, to make it sound worse than it is. A graduated response is what it is. But I don't think we're at that stage here.
What's contemplated is a notice and notice. Will notice and notice work? Notice and notice can be a fabulous educational tool, but without consequences it can pose a long-term problem.
As for notice and takedown, which I think Charlie hates, it is entirely different. And by the way, everybody else in the world seems to have it and they don't seem to have a problem with it.
Director, Digital Business Development, Warner Music Canada
Along with government controls, as already mentioned, there's another side to this. Right now Warner Music Group works with all the network operators. There is voluntary notice and notice right now. This exists. The problem is it's not having any effect, and I think that's where we're coming from. I could cite many references if I had more time that speak specifically to how Warner Music Canada works with the network operators on trying to deal with infringing content.
Conservative
Conservative
Tim Uppal Conservative Edmonton—Sherwood Park, AB
Thank you, Mr. Chair.
Your industry requires obviously a specific skill set. There are skills that are needed to work in this industry, and that skill set has been changing. I'm wondering, those people who are entering the work field in your industry, do they have these new skill sets that you need? And is there something that can be done to help them further along to get those skill sets?
Director, Digital Business Development, Universal Music Canada
I think what's very interesting to see so far is that in our building we have people from very diverse backgrounds. We are starting to specifically hire tech-savvy people who really focus on new media. We have about 20 people at our company who focus specifically on new media. They are educated in that space. That's different from historical music industry training. We have a lot of people at our company as well who have traditional music industry training, and increasingly more from a business background or a legal background, as that becomes more and more important.
I think one interesting thing is that the record labels we are finding are seeding other content businesses in Canada. As they develop their new media industries, our challenge is keeping our staff from being poached by the broadcasters or the people who are now the wireless carriers who are trying to learn about content; they know that we have been there and we understand it.
President, Canadian Recording Industry Association
I would just add that I do think this is an issue. It may be that the larger companies have an ability, for whatever reasons, to access this talent, but I do think there is an issue for smaller music businesses in this country in getting access to this type of talent. It's something that we need to look at.
It's like we have a different ecosystem, and there are people who are out on the edges of it. You can almost think of them starving for oxygen. So how do we get the oxygen to them? Well, think of the oxygen as digital know-how. These people here have a ton of this digital know-how. They can afford to hire people with that digital know-how, and can break artists in this new environment even when it's very difficult to do, but I think we need to direct some attention to the rest.
I think that's a good question.
Conservative
Tim Uppal Conservative Edmonton—Sherwood Park, AB
My next question would be that CD sales, as we know, have gone down and single digital track sales have gone up, legitimate single track sales. Being just a devil's advocate here, or just saying what some people have said, some of that would be attributed to legitimate online purchasing rather than piracy.
How do you feel about this, that maybe the problem isn't so much piracy as just legitimate sales that are bringing down CD sales?
President, Canadian Recording Industry Association
Oh, I see; it's cannibalizing. No, I don't believe the legal digital marketplace is cannibalizing CD sales. We're at a frontier, right? We're at a tipping point. This has happened before in our industry, from vinyl to cassette, cassette to CD, CD to digital.
So we're seeing that decline, but I certainly do not think.... If that were true, then everybody would be migrating and CD sales would collapse, but they're not. People are still buying CDs. The problem is with people who are opting out. They are not buying anything.
President, Quinlan Road Limited
Moreover, there are many fewer CD retail stores, and this is also a domino effect of the whole collective environment that everyone is working in.
On the whole, my constituency prefers to purchase their music in CD form because they like to sit with the liner notes and so on. That's not to say that some of them don't download legally as well, and perhaps some illegally, as I pointed out. I think that an incredible food chain exists here. Once the environment is not established and protected from an economic standpoint, a lot of these players, whether retailers or studios or others, start falling away.
The people who phone my office--the 1-800 number--say, “We used to have a Sam the Record Man in our neighbourhood”, or, if they're calling from the States, Tower Records. They don't exist anymore, and entities such as Amazon have come in to fill the gap.
Director, Digital Business Development, Warner Music Canada
To take it one step further, we are creating direct-to-consumer solutions to satisfy that need as well. I can speak for Warner, but I know the other labels in Canada are doing this as well. We run our own retail operations, which is another way for us to exist without that retail footprint.
Conservative
The Chair Conservative Gary Schellenberger
Thank you.
We're going to go to the third round. It's going to be two minutes.
Conservative
The Chair Conservative Gary Schellenberger
Yes, it's a lightning round.
Mr. Rodriguez is going to go first, and then Mr. Angus, and then Mr. Del Mastro.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Thank you.
This has been an excellent discussion. I'm really--
Conservative
The Chair Conservative Gary Schellenberger
No, I said it would be Mr. Rodriguez first, and then Charlie.
Liberal
Pablo Rodriguez Liberal Honoré-Mercier, QC
In two minutes it's going to be more a comment than a question, or maybe it will be a question at the end.
Mr. Henderson, you started saying that society could or should be judged on how it treats its artists. I think that's very important, and I agree with you. You also said that very few artists, including musicians, live from their art. It's difficult, and we all know that.
Having said that, I'm surprised that you're opposed to the levy, because in a way the levy is part of this ecosystem. It's not there to solve all the problems, but when I met with Marie Denise Pelletier yesterday, she explained how much of a difference this can make for some people. For others, it's just enough to record another record or something like that.
If you're not against it, then why are you not strongly in support of it?
President, Canadian Recording Industry Association
If that should be around 5% of somebody's livelihood, can you see why I might be interested in getting the 95% back?
President, Canadian Recording Industry Association
That's the focus, the 95%.