Canadian Heritage Committee on Oct. 16th, 2018

[Jennifer Mitchell]

I can't give you an exact revenue figure off the top of my head, obviously, but a song like My Way would generate performance revenues. That would be money that we would otherwise collect—for example, in Canada, from SOCAN. It would be revenue from television performances, concert performances, radio performances, and the like.

There's a digital aspect to that as well. It would include mechanical revenues from physical products, as well as digital products and streaming services such as Spotify. It would also include sync licensing and print licence rights. There are a variety of different revenue streams.

[Steven Blaney]

Okay. If My Way plays on Spotify, then are you collecting the revenues through SOCAN?

[Jennifer Mitchell]

I'm collecting it through SOCAN and I'm collecting it through CMRRA, which is part of CSI.

[The Chair, Liberal, Julie Dabrusin]

That's the end of your time. We will go to Mr. Nantel, please.

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

Thank you very much, Madam Chair.

Thanks to all the witnesses.

I'll be speaking English. It's much simpler since everyone is speaking English and we are in a remote translation situation.

First and foremost, I have to say that Sirius XM was the game-changer 15 or 20 years ago when you applied. Clearly what we see here is that when a content accesser—because we cannot say broadcaster—is regulated, there are great benefits to us, because you know what your terms of engagement are and we can support you, and clearly you did support music.

I can tell you that the passing away of Mrs. Sasseville has been a very troubling thing for everyone in the music media in Canada, especially in Quebec, where you contributed a lot. You do a lot of business too, and most copyright owners have received great shares, related especially to your international or United States sales and the sudden exposure of these smaller markets to a bigger market, thanks to you.

Because of that, I need to ask a question to Mr. Spotify here, Mr. Schmidt. Actually, to me, Mr. Spotify is Nathan Wiszniak. Is he still working for Spotify Canada?

[Darren Schmidt]

Yes, he is. I'm trying to be Mr. Spotify, though.

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

He's Mr. Spotify in Canada to me, and he surely faces a lot of heat.

He's been very active and present, mediating with the music community and engaging a lot. He's been very involved. For this I must congratulate the company.

I want to make sure everybody understands that we are not a domestic market of the United States, and especially that we have a little bubble of France in Canada. Because of that, we have specific stuff, specific content and specific approaches to the legal aspects and to appreciation of the value of copyright.

I want to make sure we understand quite well the nature of your business, Ms. Mitchell from Casablanca Media Publishing. For example, you were talking about Paul Anka's My Way. Can we say that you provide administrative services for independent publishers? Is that a proper way to present Casablanca?

[Jennifer Mitchell]

I am an independent music publisher. As such, I provide administrative services and I also invest in copyright with songwriters.

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

In your situation, I can say that artists are actually asking you to manage songs the best way possible, to give them more exposure and enable them to make as much money as possible. It's great, and I appreciate that. Obviously, there is talent development involved in your case, as well as a lot of administrative support for various rights owners who have not signed with major international labels.

If you had negotiated the amounts paid by streaming services like Spotify, would you have had it be different from what it is now, from the micro-pennies per play?

[Jennifer Mitchell]

Well, in Spotify's case, we obviously make more money from their paid subscription services, so we support the paid subscription model wherever possible. As a publisher, one of the biggest issues we have is the split between the amount paid to publishers versus the amount paid to labels, but I think that's more an issue for the Copyright Board, probably, than it is for Spotify overall.

Obviously we would like to see the revenue increase. Overall, one of our bigger issues in terms of compensation is in trying to deal with some of these larger companies that are hiding behind the copyright exemptions right now, and not coming to the table at all to negotiate. For all the issues we may have had with Spotify, they are at the table negotiating. There are many that are not.

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

I know. I understand.

We had testimony from David Bussières. I think it's important not to make a weird comparison of the money earned by a spin, because obviously a spin on the radio reaches thousands of people, while a spin on Spotify reaches me in my headset. What he said was about his song, Lumière, and we can it take for granted that the song was a hit song. It played on radio. People liked it. People streamed it. He received, for 30,000 spins on Spotify, $10.80, which I don't want to qualify. This is what he got. Those 30,000 spins means 30,000 people are going, “Oh, I like this song. I'll play it.” It was $10.80. I would say at the same time that he had a very specific submission that we can check out. On the radio, the same song went to fifth position on the airwaves. He had 6,000 rotations, and he earned $17,346—so about $17,000.

I'm going to ask you and Mr. Spotify—Mr. Schmidt—how we can manage this. With the comparison of these two environments, how can a regular person marketing in Canada cope with this change of attitude towards music listening and the ridiculous money coming in?

Please, you go first; and then Mr. Schmidt, please.

[The Chair, Liberal, Julie Dabrusin]

I'm just going to give a heads-up. You have a half a minute to respond because we're going to have to move to committee business, but you can also provide answers in writing.

[Jennifer Mitchell]

Sure. Was the question directed to me?

[The Chair, Liberal, Julie Dabrusin]

I think it was to Mr. Schmidt from Spotify.

[Darren Schmidt]

First of all, I can't speak to the example that you've given about the difference between the radio play payout and the Spotify payout. I can speak to the Spotify payout, though.

I think there is a reality of streaming revenue share economics, as opposed to unit-based economics. Think of the late 1990s: Every sale of a CD will result in a specific incremental piece of revenue that will ultimately be paid to a rights holder. Here, no matter how many times something is streamed—a million, one time, whatever—there is only a certain amount of revenue coming in from that user, and the bulk of that revenue gets paid out. As I said, we paid out 10 billion euros as of August of this year. That amount continues to grow as the user base continues to grow.

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

Mr. Schmidt, can you please send us some sort of answer to this comparison from David Bussières. It speaks volumes to us. It's a Canadian example. It's a pure comparison between ways of consuming music, and it is not replacing CD sales—actually, it is replacing CD sales, so we may have $18,000 from radio and potential CD sales. Then compare it to streaming, because nobody buys records anymore.

Please tell me how Canadian artists can cope in such a situation. Maybe we need the government to support them like crazy, but it surely won't come from you.

[The Chair, Liberal, Julie Dabrusin]

Unfortunately, we are over time and we have to go to committee business, but I believe that I note now three requests for extra information for Spotify. There was one by Mr. Boissonault, one by Mr. Blaney and one by Mr. Nantel.

If you would be able to get back to us with that, Mr. Schmidt, that would be very helpful.

Is that a yes?

[Darren Schmidt]

Yes. Sorry; I wasn't sure if you could still see me, but yes.

[The Chair, Liberal, Julie Dabrusin]

Thank you.

That's going to bring an end to this meeting.

Thank you to all of the witnesses for your evidence today.

We have some committee business, so everyone else stay. The witnesses are going.

I don't think we're going to go in camera, because we don't have time.

[The Chair, Liberal, Julie Dabrusin]

We're back.

It'll take too long to clear the room, but we do have to vote on the budget for the review of Bill C-391, an act respecting a national strategy for the repatriation of aboriginal cultural property. You have all been provided with a copy of it.

[Steven Blaney]

I move that we adopt this budget.

[The Chair, Liberal, Julie Dabrusin]

Thank you so much.

(Motion agreed to)

Thank you, everyone.

The meeting is adjourned.