Good morning and thank you for this invitation to appear before the committee today.
My name is Solange Drouin. I am Vice-President of Public Affairs and Executive Director of ADISQ. I am speaking on behalf of approximately 250 independent entrepreneurs—producers of sound recordings, entertainment, videos, recording companies, and artist managers—who are responsible, in particular, for the production of 95% of francophone music content in Canada.
The independent industrial structure that characterizes Canadian francophone music production emerged 40 years ago. It is unique in the world: French Canadian artists almost always turn to local entrepreneurs, small and medium-size enterprises, to assist them in producing and marketing their works.
Everywhere else in the world, music production is dominated by three major multinational businesses: Sony Music, Warner Music Group, and Universal Music Group. In the 1980s, those businesses abandoned our market, which enabled French Canadian artists and entrepreneurs to work together to create a dynamic ecosystem, a true star system, to which the audience here is now attached. This is a situation that should make Canadians and our leaders proud.
The fact nevertheless remains that these companies, the major multinationals, are still operating in our market. They are our competitors. Need we recall that they have massive resources compared to our own? Although the entire music industry has been in turmoil for more than 15 years, the independent businesses I represent have been left distinctly more vulnerable by the transformation of the competitive music market, which has become unfair and unbalanced. That fact must be taken into consideration in this process.
You have invited us to take part in a study on remuneration models for artists and creative industries in a copyright context. The remuneration of Canadian music content creators comes mainly from a combination of revenues and royalties from the exploitation of sound recordings and performances.
To optimize those two elements, the artists' professional entourage devote their energies to effectively marketing the artists' works. You legislators must ensure that all the statutes concerned are as effective as possible. It's simple: no consumption, no revenues. However, where there is consumption without adequate laws, there are no adequate revenues.
The Copyright Act is a pillar of the remuneration of music content creators. It is an economic statute that produces tangible effects for all Canadian content creators.
Consequently, the work you are engaged in will have serious consequences. You finally have an opportunity here to correct many aspects of the act that currently and unfairly deprive content creators of revenue.
As a result of the many exceptions that have been introduced into it over the years, particularly since 2012, the Copyright Act has become a veritable Swiss cheese, thus considerably weakening its scope and causing significant prejudice to rights holders: authors, artists, and producers. This is an incomprehensible situation in a country such as Canada and one that must urgently be terminated. At a time when we are welcoming the world here at home, it would be good for us to make a good impression.
We agree with several of the proposed amendments outlined by the previous witnesses, such as Music Canada, the Canadian Private Copying Collective, or CPCC, the Canadian Independent Music Association, or CIMA, and others that will follow us, such as Re:Sound.
Without providing an exhaustive list, here are the three amendments we specifically request.
First, you must finally eliminate, once and for all, the exemption from payment of royalties on the first $1.25 million of radio revenues so that Canadian content creators can stop subsidizing those businesses—the Canadian Radio-television and Telecommunications Commission, or CRTC, recently said it again—which are still highly profitable today.
Second, you must amend the definition of sound recording so that artists and producers can receive the royalties they are owed when their works are included in the soundtracks of audiovisual works.
Third, it is urgent that you amend the private copying system—which you have heard about—so it applies to all types of devices, such as smartphones and tablets, that are used by music consumers to copy music.
Mr. Macron could tell you all about that because France is doing a lot in this area.
The changes brought about by technology are obviously central to the discussions about this review. The act must clearly be consistent with music consumption practices but currently is not.
An act that is in sync with consumption practices is not an act that aims to reflect recent tools or trends, or else it risks falling constantly behind and mistakenly anticipating changes. On the contrary, it must be as technology-neutral as possible.
New technologies are tools that are available to all players in the music ecosystem, from creator to consumer, and including professional entourages. However, regardless of the tools used, the actions of each individual will remain unchanged. Songwriters write good songs, producers and recording companies promote them, and radio stations broadcast them.
Tools won't save creators. Blockchain technology, for example, might be another way for them to collect royalties from the use of their works. Would that tool be more effective than those that already exist? The question is being discussed, but one thing is certain: failing a strong act that protects works and ensures that royalties are paid for their use, optimizing royalty redistribution tools won't ultimately improve the situation of creators.
To be efficient, the Copyright Act must be attuned to international standards and consumer practices, and it must also serve creators.
I hope no one is unaware of the problems facing people in the music industry, but the scope of their losses bears repeating: Quebec sales of physical sound recordings have fallen 72% since 2004. Sales of digital works, which have never offset that decline, are shrinking as well: they have fallen 42%. For the majors, the large corporations in the music market, streaming has recently spurred a return to growth, but that news must be viewed with caution and a clear mind. Only a handful of artists, international stars who are listened to by millions around the world, enjoy the impact of streaming. One important point is that ADISQ estimates that it takes 30 million hits on these streaming services to make an album profitable. However, last year, the Quebec artist who came closest to that threshold had 8 million hits. That artist is in fact Half Moon Run, a group of anglophone musicians who perform outside the province.
I will conclude by saying that cultural diversity is a cherished principle in Canada. Content creators, authors, artists, and producers are its pillars. When they can't earn a living from their art, that diversity is directly threatened. That's the case today. Fortunately, you have the power to restore strength to an essential tool to ensure the continued existence of diverse and professional Canadian music production.
I hope you understand that urgent action is required. In 2016, ADISQ announced that the music industry was at a tipping point. Two years later, we are unfortunately approaching a point of no return. We need to turn the situation around now.
