I want to address three issues that are important to the recording artists and musicians we represent through ACTRA RACS, some of which will echo what we have just heard from Music Canada.
One, we ask that Canada stop relying on artists to subsidize profitable media corporations and repeal the $1.25-million exemption for commercial radio. In 1997 the exemption was introduced as a temporary solution for a struggling commercial radio industry. By 2016, commercial radio, now vertically integrated and run by a handful of large media corporations, had increased its profits 12,000% to over $437 million. Struggling artists are subsidizing large profitable media corporations, which claim the exemption annually for each individual station they own. The cost to performers and makers is $138 million in lost revenue over the past 17 years. Canada is the only country with this exemption, and eliminating it will have no impact on true small stations, including campus and community radio.
Two, amend the definition of “sound recording” as set out in section 2 of the Copyright Act. According to this definition, a sound recording is no longer a sound recording if it accompanies moving pictures, meaning performers and labels are not compensated for its use in film and TV. The effect of this runs contrary to the intent of the 1997 amendments, which were made to bring performers and makers in line with other music rights holders. Authors and publishers have long been compensated for the use of their work, including film and TV soundtracks. This inequity costs performers and makers an estimated $55 million per year in lost revenue. In 44 countries around the world, performers and makers have the right to receive royalties when sound recordings are used in film and TV, including in France, Germany, and the U.K.
Three, correct private copying. The private copying regime was introduced in 1997 to allow Canadians to copy music for private use without infringing copyright. In exchange, rights holders were to be compensated through a small levy on blank audio recording media. The intent was to be technologically neutral. You got it right in 1997; it was supposed to be future proof. However, a court decision limited the levy to media that are quickly becoming obsolete, blank CDs.
Since copies of music are primarily made on devices such as smart phones, this has had a devastating impact on our rights holders. Annual revenues from the levy have dropped from $38 million in 2004 to less than $3 million in 2016, while private copying activity doubled over that same time period. The effect is that rights holders have not received compensation for billions of private copies made of their work.
We support the Canadian Private Copying Collective proposal, which includes a long-term solution for copyright reform and an interim proposal for a four-year $40 million per year fund, to ensure music creators continue to receive compensation for copies made of their work until a more permanent solution can be enacted. It’s worth noting that this one correction will benefit the spectrum of music rights holders and is urgently needed.