Canadian Heritage Committee on Sept. 25th, 2018

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Thank you very much, Madam Chair.

Ms. Francoeur, Mr. Hilchie, thank you for being here with us.

Mr. Hilchie, I hope I have some time to speak to you. I am in fact going to try to be brief.

This industry is really blossoming. We constantly hear excellent news about it. In my opinion, the fact that there is a creative mass of workers in this area is promising for culture in general. In the evening, after working with you to earn a living, they don't become boring; they continue to create. It's really fantastic.

Ms. Francoeur, could you tell us about the space Stingray occupies in the world of music broadcasting? I think your enormous success is probably related to the high quality of your programmers. I'm thinking, among others, of Henry van den Hoogen, whom I met at Mix 96, or of Jean-Richard Lefebvre, who founded Galaxie, a network you purchased.

The service Stingray offers is in a way a new playing field. It's a service you offer to businesses. You can't subscribe to Stingray. You provide this service so that there is appropriate music in a Gap store, for instance. Are you the ones who do the programming?

[Annie Francoeur]

You are talking about the part that is addressed to commercial establishments. A business can, in fact, play the radio and play its own music, or do business with a music provider who does the programming for them, or choose an existing channel. Stingray is one of those services.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

I see.

[Annie Francoeur]

We then conclude a contract with the client and there are monthly fees for our service. We pay the royalties to the collective management companies; we do it instead of the client.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

In certain restaurants or boutiques, we see a SOCAN sticker. When we see that, we hope that the business operator reports what is played in his establishment. That means that you deal with all of that. The business people don't have to worry about it.

[Annie Francoeur]

Precisely. There is an administrative aspect we handle for them.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Regarding copyright, I remember that when Sirius and XM launched their satellite radio service, everyone reckoned that they were peripheral players. They weren't considered very important. I was doing tracking and radio promotion, and that was the situation. Today, they are responsible, finally, for one of the largest copyright cheques our songwriters receive. These people, like you, take the trouble to go to industry meetings, such as the ADISQ meetings.

Do you think that your contribution to copyright is important, given that you also cover foreign markets? Regarding Sirius and XM, there may not be many people who listen to French-language radio in Illinois, but the fact remains that the United States is an enormous audience.

Is the situation the same for you when it comes to collecting copyright fees for Canadian artists abroad?

[Annie Francoeur]

It depends on the markets. Regarding our market penetration, I spoke earlier of 40 million households in 156 countries, but it depends on the service. We went about things gradually. In certain countries where Stingray Music is not available, another service is, for instance Concert TV or a live classical music channel. You have to understand that when we talk about Stingray Music, it is not available in the 156 countries. Market penetration is quite variable. Canada remains one of the biggest markets for Stingray Music with regard to market penetration and the royalties produced for the rights holders.

However, according to the regulations, we must provide a lot of Canadian content. Those channels are also accessible when the service is available in the United States, in Europe, and so on. We don't eliminate the Canadian artists from our programming. And so royalties are generated for Canadian artists who would otherwise receive nothing.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

I want to follow up on the question asked by my colleague, Mr. Boissonnault. The topic we are currently studying is complicated, and I say that all the time. I'd like to really understand. You submitted a proposal concerning your own service. Is that correct?

[Annie Francoeur]

Yes. We aren't the only ones involved, of course, but we would be the first ones affected because we are the main provider of background music in Canada. There are some smaller players, and some larger ones who are attempting to get into the market. If they were subject to the same requirements, Canadian artists and authors would receive more royalties.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Tell me more.

This means that international players want to invest in this area. Have some of them already done so?

[Annie Francoeur]

There is Spotify, among others, that offers a similar service, called Spotify Business. This is a service that is similar to ours, and commercial establishments can access it through a Web platform. Spotify Business is not subject to any Canadian content minimum.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

That's very interesting. You are quite right to raise this point.

We would be grateful if you could send as much information as possible to the committee on that topic, such as what parts of the act are involved, and what type of services. I am rather well versed in Mr. Boyko's affairs, but I am nevertheless a bit confused.

I'll turn to you, Mr. Hilchie. This is a very interesting example, I must say. I remember somebody on the other side reacting to the fact that there has been a lawsuit that your member won against somebody who was putting.... This is great news. What part of the copyright was used in this specific case?

[Jayson Hilchie]

It was the section on TPMs, the fact that selling circumvention devices in Canada is illegal. Having them and selling them are illegal.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

For the benefit of all, what's TPM?

[Jayson Hilchie]

Sorry. It's technological protection measures. This individual was selling chips that would modify a video game console to allow it to play pirated goods that bypassed the encryption.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

It's quite obvious infringement.

[Jayson Hilchie]

But prior to 2012, you could not get a judgment on it being illegal. In fact, there was a judgment in Quebec that it was not, prior to the Copyright Act being passed.

Now we actually have the ability to go after infringers that are creating major issues. I think The Globe and Mail said that the judgment actually affirms the strength of the Copyright Act with respect to technological protection measures. That's why it's so important to us to make sure they remain.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

I think I have almost finished, right?

[The Chair, Liberal, Julie Dabrusin]

Yes.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Well, thank you very much.

[The Chair, Liberal, Julie Dabrusin]

Very well.

Now we are going to Mr. Hogg, please, for questions and answers for seven minutes.

[Gordie Hogg, Liberal, South Surrey—White Rock, BC]

Ms. Francoeur, you made reference to making some recommendations with respect to regulations and with respect to commercial background music. What would the impact of that be on the overall industry?

[Annie Francoeur]

I can't provide you with the information right now. This is not information that I have, because I don't know how much revenue is generated by other background music services suppliers. It's hard for me to establish how many royalties would be driven to the Canadian artists. We would believe it's significant, but we don't have any numbers.

[Gordie Hogg, Liberal, South Surrey—White Rock, BC]

Certainly we've heard testimony from a number of composers who are saying that they get very little out of the downstream benefits that might normally accrue to them, and as we're seeing more online work, that is shrinking even more.