Canadian Heritage Committee on April 22nd, 2010

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

For example, Beyoncé was just targeted by her own record company because she put up videos on YouTube to promote them. That's notice and takedown.

I'm just trying to get a sense here, because we're talking about carrots. I think the carrots are amazing, but it's the sticks that I think you guys have hurt your reputation with. I mean, I know you came and said you had a bad rap. But when I hear about piracy, you went after Grokster; I think it was $150,000 a song. Grokster was a big peer-to-peer. But it was the high-profile cases such as Jammie Rasset. How many times have you taken her to court? You got her for 24 songs.

Is the stick to be applied to the pirates, or does CRIA support what RIAA has done in the United States, which is to sue the fans?

[Graham Henderson]

Well, let's just deal with suing fans. That is over. And--I might point out--in Canada we never sued a fan.

Not that we....

No, please, Charlie, let me finish.

Not that we ever got a single iota of credit for that.

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

But it was also the legal regime here.

[Graham Henderson]

No--

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

Was that a mistake?

I'm really interested in how we move forward, and I'm really glad you brought You Are Not a Gadget. But when we talk about piracy, and yet you have this example of the single mother in Minnesota... She's the poster girl all across the world. Not Grokster, and not isoHunt; she's the one.

So how do we move forward? If we're going to not sue, how do we....?

[Graham Henderson]

What we have to do is we have to take down the bad actors.

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

Fair enough.

[Graham Henderson]

Darlene wants to add something.

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

Okay.

[Darlene Gilliland]

I think as part of what you say, some of these actions have come out of frustration with the legal environment. I think we are coming here speaking as business people. We are trying to build an environment in which we have a chance to build something that people want to come to. We want to work with the fans to give them the kind of music they want to hear.

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

Totally.

[Darlene Gilliland]

That's very much our focus.

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

You mentioned K'naan. I saw that phenomenal performance, one of the most inspiring things I've ever seen.

You talk about artists being compensated. The same weekend, we had Divine Brown, the Trews, Carole Pope, Eva Avila, Rex Goudie, the Trailer Park Boys, and Marie Denise Pelletier coming out to support the iPod levy so that artists get compensated. Yet CRIA intervened against that.

Why are you against artists getting compensated through the iPod levy?

[Graham Henderson]

We're actually not against artists getting compensated by levies, but what I'll say about the levy is this: our goal is to establish—and I think that should become apparent from this—a thriving, legitimate digital music market in Canada in which everybody can be fairly compensated. We believe no levy can ever replace such a market.

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

No, but the levy doesn't replace the market, the levy was a revenue stream. You guys stepped in to go against that.

[Graham Henderson]

The reason we did—and now, Charlie, you're going back to a little bit of ancient history, under the old act, not about your own bill—is that we do not support levies that have the effect of laundering illegally acquired music into legal copies--

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

I see.

[Graham Henderson]

--which would have the effect of destroying our marketplace.

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

But the levy is in place to ensure that the artists are compensated. It's a long-standing thing. So you're against that then.

[The Chair, Conservative, Gary Schellenberger]

We have to move on right now.

We're moving to Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

Thanks to our witnesses.

Ms. McKennitt and Mr. Henderson, it's wonderful to see you again.

Mr. Millar and Ms. Gilliland, welcome to the committee. It's nice to hear from you.

I'm going to start with you, Graham. You haven't got that much space between your head and the ceiling, so when I ask you this question, don't rocket too hard out of the chair.

We have heard from guests before this committee--such as Michael Geist--who seemed to argue for an open, fair use system, basically indicating that, you know, if we move toward this, some have suggested a levy on media as a means of kind of replacing...so that there would be a collective that would replace any income that would be lost. Then everybody could share and all would be right with the world.

What's wrong with what Mr. Geist is saying?

[Graham Henderson]

I thought you would have had all you ever wanted to hear about that last Tuesday.

I would have to say, having read the transcripts, or being aware of what was said there, I concur with that; I mean, we are opposed to the sort of fair market proposal that's being promulgated, which has the effect, we feel, of legitimizing virtually all of the illegal activity and therefore destroying the marketplace—and then replacing it with a levy.

I don't think that's the solution. I don't think creators benefit from that. I know they don't benefit from that. I don't think consumers are going to benefit from that. No one will.

I would have to say that I don't think it has a place. Certainly it's a concept that's foreign to the continental systems. It would be something that you would have to look at very, very carefully, because if there were ever an area where the law of unintended consequences could take full rein, it would be that.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you.

What I'm hearing from today's guests—and I think it falls to this Parliament to be responsible and move when we are presented with the next copyright bill—is that the problem is illegal redistribution. Fix that, the market works.

One of the things that Mr. Angus and others are hearing about in regard to what I've referred to as the “iTax” is the fact that the music industry in Canada is in a desperate situation right now. They'll take money any way they can get it. They'd prefer to have a system that operated with rules. We had a guest the other day who said that good fences make good neighbours.

Mr. Henderson, you've said today that we should set the box in place and allow people to understand what the laws are, and they will obey them. I tend to agree with that. And shut down some of the sites that, frankly, are stealing content, or allowing content to be stolen, and the market will work.

With respect to the levy, which I and my government are wholeheartedly opposed to, I would just propose this: would you rather have a system that worked, where the fences were defined, where people like Ms. Gilliland and Mr. Millar could work on these emerging platforms, and Ms. McKennitt could put her material on those new platforms and be paid for it? Is this not what you're asking for?

That's my understanding of what the industry really wants.

I'll allow each one of you to respond to that.

[Graham Henderson]

I think the levy debate is obscuring the real problem. Levies, historically, have never been more than an ancillary support for artists. The levies could and should have been a fraction of what the artists were able to make, whether through touring or selling their high-value assets.

I believe the drive for levies is a reflection of just how bad it is, but it will not solve the problem. We have no issue with levies if, for example, they were applied to private copies of legally obtained music; it's where we throw the gates open and in effect destroy the ability for people to earn a living.

[Charlie Millar]

I'd just like to comment on it.

From a business development perspective and from a technological perspective, my issue is that in the pirate digital generation there is no need to buy or download onto devices. When you are able, at your fingertips, to go anywhere at any time and download whatever you want, a tax that addresses storage is a way to get some pennies. I'll admit, it's a way to sort of get something, and that's great, but from the pirate's perspective, this does not address the underlying behavioural issue, which is, as you said, Mr. Del Mastro, really what we're after here. That's why I have a real issue with it, and I want to get that on record.