Very.
Evidence of meeting #120 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was artists.
A video is available from Parliament.
Evidence of meeting #120 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was artists.
A video is available from Parliament.
11:25 a.m.
Liberal
11:25 a.m.
Steven Blaney Bellechasse—Les Etchemins—Lévis, CPC
Thank you very much, Madam Chair.
Thank you to our witnesses.
Thank you to Mr. Posner and Mr. Novotny for describing how the current rights paradigm for multimedia platforms is really changing.
Ms. Dorval, you talked about section 68.1 of the Copyright Act. You told us a bit about the collection mechanism. Essentially, it seems there is scope for collecting royalties, but we are trying to—dare I say—kill the goose that lays the golden egg. You did say, however, that revenues are generated.
Could you elaborate on your position and tell us why you say that the current model provides considerable royalties?
Further, could you explain the situation of smaller radio stations? I said there are two independent radio stations in my riding. How would they be affected by the recommended measure, which is to eliminate this provision?
11:25 a.m.
Chair, Board of Directors, Canadian Association of Broadcasters
Thank you for your question.
People often think that radio plays an isolated role. When people appear before committees as we are doing today, the main topic is the remuneration of artists. Yet radio is clearly a medium that supports artists and culture in Canada.
We also play an important role. This is the era of fake news. We have debated how important professional, factual news and information are to maintaining a healthy democracy. That is the important role that commercial and private radio plays in Canada. As operators of news and information stations, radio serves a purpose that does not generate profits. The small stations that belong to larger stations make it possible for the large group to subsidize less profitable activities, such as providing news and information across Canada.
Despite the $100 royalty that helps small stations, which account for roughly 60% of the radio stations belonging to the Canadian Association of Broadcasters, the industry continues to collect $91 million in royalties from private radio stations every year. What we want is for this $100 exemption on the first $1.25 million to be maintained.
11:30 a.m.
Susan Wheeler Chair, Copyright Committee, Canadian Association of Broadcasters
To answer one of your questions specifically, the suggested amendments to section 68.1 would represent a 44% increase on that unit cost. Obviously, that would come as an additional cost to radio broadcasters that they would then have to manage along with their other programming costs.
11:30 a.m.
Bellechasse—Les Etchemins—Lévis, CPC
Can you explain the mechanics of how it works? It's $100 per....
11:30 a.m.
Chair, Board of Directors, Canadian Association of Broadcasters
It's on the first $1.25 million of advertising revenue, and then the additional tariff kicks in at a higher rate on additional advertising revenues.
11:30 a.m.
Bellechasse—Les Etchemins—Lévis, CPC
The $1.25 million are the revenues of an independent radio station, if I understand correctly.
What are the average advertising revenues of an independent commercial radio station?
11:30 a.m.
Chair, Board of Directors, Canadian Association of Broadcasters
Revenues vary widely from market to market and depend on the radio format, that is, whether the stations are primarily news and talk radio, or primarily music, and according to the type of music. There is a wide range among the 600 radio stations we represent.
11:30 a.m.
Bellechasse—Les Etchemins—Lévis, CPC
Mr. Novotny, I think it was you who mentioned that the artists who produced the movie Mishka get $3,000 per month in revenue, but this revenue is not, I would say, trickling down to those who own the creative rights.
Is there any possibility that this $3,000 could either be increased directly from, in this case, I believe, Netflix, or trickle down to those who are part of the package of owning the rights to this creation?
11:30 a.m.
Screen Composer, Screen Composers Guild of Canada
That's an excellent question.
The bottom line is that there's no system in place for it at this point. I don't know how much everybody in the room knows about the way Google runs its business and the way people who post videos on YouTube monetize their work. I don't know all that much about it, but the bottom line is that if you get a lot of views, there is a proportional remuneration that comes from their advertising model that goes to the filmmaker, but that completely sidesteps the tradition of public performance, royalty and reproduction rights.
When I spoke with SOCAN, I asked how this was going to work for the future. They said they didn't know. We can't get any information from them. Netflix is very tight about what it is they release, as we all know. For YouTube it's a similar situation.
Ari and I discussed this so much when we were coming here. They are forcing us to look at a broad-based response to the way they're treating our marketplace. That's what inspired this idea of looking at the blank media levy. So I can't think of a way.
11:35 a.m.
Screen Composer, Screen Composers Guild of Canada
I might add that it would be preferable if there could be far more transparency in what's going on, because that would allow the performance rights organizations like SOCAN to be able to actually see the data, and be able to help remunerate properly.
11:35 a.m.
Bellechasse—Les Etchemins—Lévis, CPC
Absolutely, I understand.
What you're saying, in a nutshell, is that in an ideal world, if there were possibilities to get more transparency on the way this $3,000—in this case—is being distributed, that would be the ideal way.
11:35 a.m.
Liberal
September 25th, 2018 / 11:35 a.m.
NDP
Pierre Nantel NDP Longueuil—Saint-Hubert, QC
Thank you, Madam Chair.
Despite all of our chair's goodwill and sincere intentions for creators, we are facing a government that has been shy in requesting what has to be done, a simple GST on subscriptions to Netflix. Just from that alone, what can we expect from them, really?
We all have to face this. We hear about the artists, and we're not even able to add on GST to a subscription to Netflix. This is ridiculous, completely ridiculous. There's no point, and Mr. Morneau may hide it in all sorts of phrases like, “We are coordinating with the international....” No. GST, a destination tax, is something that is required almost everywhere, if I'm not mistaken, even in 27 of the United States. He's really diluting the issue of GST, which is ridiculous. It is because of these guys who are going to say, “Netflix tax? Argh!” It is not a Netflix tax. It's the GST, my friend. That's it.
It is also this government that said no to recommendation 12 in that big report we had on the disruption of media, which said we should have Internet providers supply some sort of fund, like the Canada Media Fund. This is because the principle at that time was if your business is into providing international singles and big offers of entertainment to all Canadians, we were under the impression that our Canadian content needed you to put 5% of that good, big business into funds so that we could create our own stories on the screen. Again, we heard, “No, we will never do that. No, no, no. Why would we do that?” I'm going to tell you why.
It's because, Ms. Dorval, I've been working for, I would say, 23 years in the music and TV-related business and I was directly involved, from 1987 to 2002, in the relationship between radio broadcasters and television and music. It is so right when you say that you've been the best partner that we could have, so right. In the situation that we're facing now, these creators simply don't have enough money to put food on the table for their kids. That's what's happening. We need to open our eyes. We need to stop saying, “I don't want to see that and I'm going to watch Netflix on the train while riding back home.” We have to face reality. Broadcasters, artists, creators and cable distributors have all been involved in what Mélanie Joly used to call, “an ecosystem”, and that is so right. It was right, and it worked.
How come it worked? When Bryan Adams was here—and we shall not get into the star thing: “Oh, Bryan Adams”—Bryan Adams is an accomplishment of our system. Why has he been signed? It's because the label—I think it was A&M that signed him at the time—knew there was MAPL content to face for radio broadcasting in Canada. They said, “We'll sign this guy, and we will commit to our commitment to be involved in the Canadian industry and the entertainment business.” The Canadian content that they were looking for is why they do it.
Nowadays, what do we do? We do zip. We do zero. You're so right to tell us about the EU approach.
I would like to clarify something. Ms. Dorval, you said that multinationals get a large portion of the revenues from the various public performance rights. Yet you know very well that it is a different story in Quebec. You should say that, in Quebec, most of the big artists sign with independent record labels, which often have interests in their publication. They are small record labels, with people who are very committed and work as a community. So it is a different story in Quebec.
Mr. Novotny, you said we should take a global approach that you describe as techno moral, like the approach of companies such as Netflix. We had a global approach in the past and it worked. If Bruce Springsteen had not received public performance rights for his songs on the radio, A&M or CBS would not have sent a copy to radio stations and told them not to play it. Radio stations would simply not have received it and would not have played it. There has been harmonization of measures with other countries in the past.
We live in an international context and people will not want their work performed in our country if they do not receive royalties.
I would like to hear your opinion. It is of course very important, Mr. Novotny and Mr. Posner, for the artists to come here to speak for themselves. Agencies that collect royalties certainly can behave subjectively at times. They earn their living through the mechanical aspect, so we would like to preserve that. Others earn their living from the public performance of music on the radio or under continuous streaming contacts. The agencies have their own visions since collecting royalties is their job. For your part, you are the real artists and we are glad to hear your point of view. You are the reason we are here.
Moreover, Ms. Dorval and Ms. Wheeler, you both have experience negotiating with committees. I would like to hear your opinion on a feeling I have that really bothers me. I am not saying this to be mean. Honestly, I like everyone here; you are all good people. I must say, however, that just about everyone got lost because half of your brief was so complicated. It makes us wonder how much those artists receive in royalties and where they come from.
Do you not consider it a bit worrisome that the government has mandated both the Standing Committee on Industry, Science and Technology and the Standing Committee on Canadian Heritage to study this matter? We really do not know where we are going. For my part, I need a bit of roadmap. I will ask the chair of our committee because I know she is in very good faith. Could we zoom out to get a better idea of where we are at?
Both committees are working away. No one will have a complete opinion. You were certainly there at the workshops in 2012. The parties had specialists who knew the subject well. They helped us understand. It is both very complex and very important for our culture.
I would like to ask each of you the following question and you can take the remaining time to answer. Do you think the government should explain what it is trying to achieve? Can we for instance draw on European Union legislation to see whether we can do that?
11:40 a.m.
Liberal
11:40 a.m.
Liberal
Anju Dhillon Liberal Dorval—Lachine—LaSalle, QC
Thank you, Madam Chair.
Thank you to all our witnesses for coming in today.
I'll start with you, Mr. Novotny. Since you represent this group, could you please tell us a bit more about the copyright policy and the setting of remuneration and how your members are affected by this, and any other things they have come up with?
11:40 a.m.
Screen Composer, Screen Composers Guild of Canada
I will do my best.
The bottom line is that screen composers are not able to determine their own rates. We rely on copyright policy to do that for us. There's probably no other business in the world where somebody can bring their product to the marketplace and have an agency set their rate.
The responsibility of government policy to set a responsible rate thwarts the bias that we often hear. The way the rate has to be set is that it has to look into the community, the society, the way screen composers go to work every day.
I remember hearing a staggering figure about Daniel Ek, the creator of Spotify. When Spotify first became an entity that was streaming music around the world, his salary was published. As the owner and creator of that service he was reported to be making around $24 million to $25 million per year. In the same year, I remember looking at what Gordon Nixon was making as the CEO and director of the Royal Bank of Canada, which was about $12 million. I looked at the list of all the other people at Spotify, and the directors were all in the double-digit millions. Artists were making nothing, and you know that story.
Dan Hill once said to me that when two songwriters embark on writing a song together, there's no discussion about who owns what word, who wrote that melody, who wrote that motif or that theme. No, we drop those things at the door, and it's a fifty-fifty deal. If three songwriters collaborate, it's understood it's a three-way deal, because you can't track those small differences.
Screen composers and songwriters are faced with a really badly biased situation, whereby all the media companies that are delivering the data over their pipes are making a lot of money compared to us. We're seeing that kind of remuneration to the directors of the services that are subscribing them, Netflix, etc. We want a fairer deal.
Copyright is the shepherd of our creative industry. It's like Mother Nature. If you read the paper we authored, our vision is that a techno-moral and virtuous copyright policy will observe when there's imbalance in the system that is leading to the extinction of some of the players somewhere in that ecosystem. Like Mother Nature, it has to intervene and protect. If it doesn't, and if the screen composers, for example, start to not be able to make their own living, that means the orchestrators, the arrangers, the lyricists, the music editors, the recording studios, all our suppliers are going to feel that. We have to right this problem. The 20th century model no longer works. I've explained why, and so does the paper.
Does that answer your question?
