Thank you very much.
My first paying job as a musician was nearly 50 years ago, in 1965. Since then, I've worked in many sectors of the music industry. Most of my success has been as a songwriter, but I've also been a studio musician, a band member, a producer, an arranger, an audio engineer, a publisher, and a recording studio owner. For my entire life, 100% of my income has come from music industry sources. I've never had a job other than music.
For 100 years, the music industry remained virtually unchanged. It wasn't a perfect business model, but it worked. There was enough money for everyone—songwriters, recording artists, record companies, publishers, plus those who work in the recording studios, pressing plants, and retail record stores. It was a thriving, multi-billion industry and, don't forget, it also produced significant tax dollars for the government.
You'll remember the testimony of David Faber, who works a construction job while living in his in-laws' basement. If David's career had happened 15 to 20 years ago, he'd likely have sold enough albums to comfortably live on his music industry earnings. So what changed?
In 1999, there was a perfect storm; the confluence of the Internet and MP3 technology allowed for the advent of Napster and similar online services, bypassing the record companies and facilitating the free distribution of music online. Technically, music fans were stealing, but as Pierre-Daniel Rheault told this committee, digital content has an anonymous, non-tangible aspect to it. People think they're just moving content across an invisible line.
The record companies were quick to react but slow to predict the future. They saw the online distribution of music as a threat, rather than an opportunity, so they went after the so-called pirates. They spent a decade doing that and eventually realized they'd lost the battle; but by then, the old business model was dead, and a whole generation of fans had grown up thinking that music is free.
But there's an upside. Never in history has music been more popular or more accessible. Look around you; everyone's plugged in, on the bus and on the street. Everyone's listening to music, all the time.
So far, witness testimony has been surprisingly consistent. I've listened to all of it. The main themes have been education, regulation, and funding. Regarding education, I fully support the funding of music education in schools, by which I mean access to musical instruments and musical instruction. I'm not so sure about using schools to promote respect for copyright, as several witnesses have suggested. It's a noble idea, but in my view it's a non-starter. The genie has been out of the bottle for more than a decade. As I said, most people today see music as free, or nearly free, and I believe it's too late to change that mindset. Perhaps if schools had daily lessons on copyright, and I mean an hour every day, like math or science, then indoctrination might be possible, but let's be honest; that's never going to happen.
Regarding funding, funding is life support. It keeps the patient alive, but it doesn't cure the illness. Gilles Daigle from SOCAN said that funding may be important, but first and foremost, we want to receive remuneration for the creative work done by our members.
Mr. Dykstra asked recording artist Brett Kissel at what point in Brett's career did government assistance begin? My question would be, at what point does government end? Why are established artists like Nickelback, Sarah McLachlan, Rush, Blue Rodeo, Arcade Fire, and the Tragically Hip accessing FACTOR funding? Ideally, FACTOR should be building new careers, not supporting old ones.
As Zachary Leighton told the committee earlier this week, 93% of FACTOR funding goes to signed, established artists. Again, at what point do you cut the umbilical cord, and at what point do you end life support?
As this committee has discovered and will discover, music industry revenues haven't completely disappeared. The record labels, the streaming services, and the ISPs are harvesting whatever revenues are available in a digital age, but those revenues are not being shared with the content creators. As you probably heard, Lady Gaga reportedly received $167 for a million streams of one of her songs. In other words, a piece of chewing gum is worth 500 to 1,000 times more than a Spotify royalty.
I'm going to skip ahead here.
Mr. Kee from Google said that the royalty rate is not the problem; it's the skill set of the artist that's the problem. I don't agree with that at all. Mr. Erdman from Deezer said that it's the vocal minority, the amateur musicians, who are complaining, and he went on to say that Deezer pays the majority of its revenue to rights holders—which is true—and he said that he finds it difficult to build a business, given that burden.
I say it's difficult for creators to build a business when royalties are .0005¢ per stream.
If the government is looking for a meaningful way to help the music industry, I believe it's through regulation and legislation. We need a modern and transparent business model for the digital age.
I've got some more here, but I think I'll leave it for the questions and give Mr. Hoffert some time.
Thank you.