Evidence of meeting #122 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was music.
A recording is available from Parliament.
4:10 p.m.
President and Chief Executive Officer, Music Canada
That was a huge battle at the time. That was an immense battle that was fought out on the front pages of newspapers, whether or not Canadian content rules should apply to those satellite...to Sirius and the others.
4:10 p.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
I have two other quick ideas. I'm sorry, I'm focusing on Graham.
I really want to focus on the business of this. When we're looking at the act protecting Canadian content, whether it's in the schools.... Other testimony here is saying the schools are not paying the Canadian creators. The schools have tight budgets, and they're balancing their budgets on the backs of Canadian creators. We've talked about exemptions. We've talked about safe harbours in previous testimony. How do we come into this as a federal act when we need to look at centring our attention on the creators of Canadian information, whether it's music or whether it's—
4:10 p.m.
President and Chief Executive Officer, Music Canada
I think you've put your finger on the issue, because you have another exemption, another exemption, and another exemption. We all talk about exemptions to copyright. Every single time policy-makers create an exemption, they're excusing somebody from paying a royalty to somebody else, and our laws are shot through with these exceptions.
If we believe that technology companies are so important to our society that they deserve a leg up, why are we imposing the burden on one sector of the creative class? Why are we not, as a society, assuming that burden, whether it's through tax credits or whatever else you might think? In point of fact, from the dawning of the digital age, policy-makers here and around the world—although the balance is swiftly changing—decided that the creators would subsidize the broadcast and technology companies.
4:10 p.m.
Liberal
Lloyd Longfield Liberal Guelph, ON
I have less than 30 seconds left. I'm a mechanical engineering technologist by trade. I also have an English degree, and my English degree I found very useful in my engineering work. By having music in my ear buds while I was designing machines and equipment, I had that side of my brain working. The arts aren't looked at in the same way as science or technology. What's the bridge that we need to make sure we cover there?
4:10 p.m.
President and Chief Executive Officer, Music Canada
The connection is there, and the evidence is in. We can nurture the creative side of our brains while we're nurturing the more technological side of our brains. They work together.
4:10 p.m.
Liberal
4:10 p.m.
Conservative
Matt Jeneroux Conservative Edmonton Riverbend, AB
Thank you, Mr. Chair.
Thank you, everybody, for being here and taking the time to prepare your presentations.
I feel like we're picking on you a bit, Mr. Henderson. I want to focus a few of my first questions on you.
Your organization represents Sony Music, Universal Music, and Warner Music Canada. Generally speaking, these are the types of actors that profit the most from the value chain of a song or a movie, particularly when acting in a producer capacity. StatsCan data shows that median incomes in all occupations of the music industry have increased between 2010 and 2015, except in the case of the performers themselves, for whom they have decreased.
Is it possible that artists' remuneration is being impacted not only by digital disruption and some of the value gap issues you raised, but also by producers who are taking increasingly larger shares?
4:10 p.m.
President and Chief Executive Officer, Music Canada
No, in fact the opposite is true. A performer's share of the pie vis-à-vis their corporate interactions with labels has increased. That's not where the value gap lies.
The problem is that vast sums of money are pooling outside of our business, on the other side of the ledger, and it's having a catastrophic effect not just on creators but also hundreds or even thousands of jobs have been lost. That's not just at major labels. It's also the number of managers and agents. The support network that used to exist for performers has largely disappeared.
4:15 p.m.
Conservative
Matt Jeneroux Conservative Edmonton Riverbend, AB
You provided us with the value gap document. I haven't had a chance to look at it yet. Is some of that outlined in there?
4:15 p.m.
Conservative
Matt Jeneroux Conservative Edmonton Riverbend, AB
Of course it is. Fantastic.
ACTRA, would you mind commenting on some of that as well? I'm sure you may have some thoughts, too.
4:15 p.m.
Director, Performers' Rights Society and Recording Artists' Collecting Society, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
To echo what Graham said, a lot of this money is sitting outside what we consider to be the music industry. In terms of neighbouring rights and equitable remuneration, the performers and the makers share that fifty-fifty. I can't here, right now, speak to or support what you're saying.
4:15 p.m.
President and Chief Executive Officer, Music Canada
Generally speaking, this is a performers' group. I'm in an investor group. You notice how much we align. We're in a time of unprecedented unity where we've all come together. We recognize a common problem. Nobody's pointing fingers at one another, and we see the solutions.
Everything we asked for at Music Canada, or at least the first two, benefits the performers equally because it's a fifty-fifty remunerative right. The term extension is really only for publishers. That's not us. The private copying levy, well, we would only receive a very small....
You made the point, right? It's right across the board, blended.
4:15 p.m.
Director, Performers' Rights Society and Recording Artists' Collecting Society, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
Yes. It would benefit the songwriters, the publishers, the performers, and the labels, and I think the performers perhaps even a few percentage points more than the labels.
Really, we're talking about the health of the entire industry, and we're looking for the redistribution of funds accrued by the large corporations down to the creators. That's the overarching principle of the Copyright Act, to make sure that the people who create the work also share in the economic benefit accrued by others in exploiting that work.
4:15 p.m.
Conservative
Matt Jeneroux Conservative Edmonton Riverbend, AB
Okay.
I have two little girls, and like a lot of Canadians, we spend a lot of time watching YouTube videos. When a video shows up on YouTube, it often shows up with a “Vevo”. It seems to have a large presence on YouTube videos, as most major artists have a Vevo channel of their own. When searching a song, the video hosted by Vevo is generally the first option. Can you help explain to the committee what Vevo is, how it pays artists, and whether YouTube has a direct relationship with Vevo?
4:15 p.m.
President and Chief Executive Officer, Music Canada
No, Vevo.... Currently—and YouTube will tell you this—98% of everything that's on YouTube is licensed because we're all remunerating it. The days of it all being illegal content are drifting away. That doesn't mean there isn't illegal content there. Vevo is a channel. It's an American entity. I'm not exactly sure who it is, but you go there and stream from there, or you can stream from the regular YouTube.
The real issue with YouTube—and this is the real value gap—is the degree to which artists are so poorly remunerated by those ad-supported services.
We are living in a streaming world now. For the first time, streaming has surpassed physical, surpassed downloads, surpassed everything. It's the dominant method that people use. There are two specific models. One is the paid subscription model—that's Spotify or Deezer—and then you have the ad-supported services, which feature mostly user uploaded content—that's YouTube.
If you look at the digital breakdown, the revenue return from paid subscriptions as a percentage of the digital pie is almost 60%, and the revenue return from YouTube is under 6%. So fewer subscribers to Spotify—because they're paid subscribers and because we negotiated a deal with them—return an enormous amount of money despite the fact there are more YouTube users. It's just so little that comes back.
4:15 p.m.
Conservative
Matt Jeneroux Conservative Edmonton Riverbend, AB
With YouTube moving to their own streaming service, in your opinion, is a lot of the YouTube exemption that was put in the previous act now moot?
4:20 p.m.
President and Chief Executive Officer, Music Canada
No, because all they're doing is offering a service like Spotify. I forget what they're calling it, but it's a service—
4:20 p.m.
Conservative
4:20 p.m.
President and Chief Executive Officer, Music Canada
Yes, that's right. It just sits over there, but that's in a different component. That falls into subscription. Whether or not they're going to put money behind it and whether or not people are going to support it are issues.
4:20 p.m.
Conservative
Matt Jeneroux Conservative Edmonton Riverbend, AB
If they did put money behind it and support it—sorry. That's for another day.
4:20 p.m.
Liberal
4:20 p.m.
NDP
Brian Masse NDP Windsor West, ON
Thank you, Mr. Chair.
Thank you to our delegates for being here today.
Who from your respective industries is making the lion's share of money from the products you're actually supposed to be recuperating money from? We've heard consistent testimony that there's a lot of money moving around, but it's not getting to creators in particular.
Is it the consumers who are not paying enough, or is it a particular organization or company that's actually receiving the lion's share of the money?
Maybe, Mr. Cormier, we can start with you.
4:20 p.m.
President, Audio Cine Films Inc.
Obviously, we're a bit different from music. We're in film and cinema. We represent major American studios mostly, and some Canadian content. Obviously, these are big companies. The revenue they generate in Canada through film is quite large, but that is a separate sector from us. That's what we call commercial or theatrical.
Our sector is quite small. Obviously, the money we generate through licensing is for content that is generated by these studios, which they own. We feel that, in given exceptions, which are very broad and undefined from our point of view, our rights, as rights representatives—
4:20 p.m.
NDP
Brian Masse NDP Windsor West, ON
Who are you not getting paid from? Is it basically the schools, the kids, the people showing movies? That's what I'm looking for. I want it clean and simple. Is it consumers?
