Thank you.
My name is Solange Drouin. I am the vice-president of public affairs and executive director of the Association québécoise de l'industrie du disque, du spectacle et de la vidéo, or the ADISQ.
I'm speaking today on behalf of some 250 independent entrepreneurs, be they producers of sound recordings, shows or videos, record companies, artist managers or other entrepreneurs, who are responsible for producing 95% of the country's francophone music content.
The independent industrial structure that characterizes Canada's francophone music production was born 40 years ago, and it is unique in the world. For support in the production and marketing of their works, Canadian francophone artists almost always turn to local entrepreneurs, small and medium-sized companies.
Everywhere else in the world, music production is dominated by three multinational companies: Sony Music, Warner Music Group and Universal Music Group. In the 1980s, those businesses left our market, and that enabled Canadian francophone artists and entrepreneurs to band together to create a truly dynamic ecosystem to which our public is now attached. This situation should make Canadians and our leaders proud.
Nevertheless, those companies are still present in our market; they are our competitors. Need we mention that their means are huge compared with ours? Although the entire music industry has been in turmoil for more than 15 years, independent companies are made much more vulnerable by the transformation of music's competitive market, which has become unfair and unbalanced. That specificity must be taken into account in this process.
You are inviting us to participate in a discussion on urgent amendments to be made to the Copyright Act for artists and content creators. The Copyright Act is an economic piece of legislation with a concrete impact on all Canadian content creators.
Essentially, compensation for Canadian music content creators comes from a combination of revenues and royalties for sound recordings and shows. For those two elements to be optimized, members of the artist's professional entourage dedicate all their energies to the effective marketing of their works.
The legislator—in other words, you—must ensure that all the relevant legislation is as efficient as possible. It's simple: without consumption, there are no revenues. However, when consumption occurs without adequate laws, there are no adequate revenues either.
So the work you are doing is fraught with consequences. You have an opportunity to finally remedy a number of elements in the act that are currently unfairly depriving content creators of revenues.
The Copyright Act, owing to many exceptions that have been added to it over the years, especially since 2012, is a real Swiss cheese today, and that considerably weakens its scope and causes significant harm to copyright holders—in other words, authors, artists and producers. This is an incomprehensible situation in a country like Canada, and it is imperative and urgent to put an end to it.
If, for social reasons, we as a people find that it is important to give certain citizen groups exemptions or special treatment, the price should not be paid by the music industry's copyright holders.
I will give an example I have been giving since 1992, so since I have been at the ADISQ. In Quebec, the decision was made that it was important for children to have breakfast every day, so it was decided to provide them with cartons of milk every morning. Dairy producers were not asked to pay for the milk, but we as a society accepted to take on that responsibility and to pay for it collectively.
If exemptions are to be given to certain groups because it is right to do so socially, that can be done in other ways, such as by providing tax credits, more specifically for charitable organizations. However, there is no need to make a group of creators bear the responsibility for that.
I would also like to remind you that, at the ADISQ, we approve of several proposals presented by witnesses who came before us and by others who are appearing with us today. I will go over them quickly, in a non-exhaustive manner.
First, the radio royalty exemption on the first $1.25 million in revenue should be eliminated.
Second, the definition of a “sound recording” should be amended so that artists and producers can receive royalties for the audiovisual use of their works.
Third, it is clear that the duration of copyright for musical works should be extended from 50 years to 70 years for songwriters.
Last, the private copying regime should be amended so that it applies to every type of device used.
The changes brought on by technology are obviously at the heart of the discussions related to the current review. The act needs to be in step with how people consume music, which it currently is not.
New technology makes tools available to everyone in the music ecosystem, from creators to consumers, including a wide array of professionals. That said, regardless of the tools used, every player still has the same role: creating a good song, promoting it, or listening to it.
Technology is not the key to creators' salvation. Block chain technology, for instance, may provide another way for them to collect royalties for the use of their work. But whether it will be more effective than existing methods is open for debate. One thing is certain: without strong legislation protecting artistic works and ensuring the payment of royalties for their use, enhanced royalty distribution tools will do little to help creators.
No one is denying the challenges the music industry is facing, but the scale of the losses bears repeating. Since 2004, sound recording sales have dropped by 72% in Quebec. Digital work sales, which never made up for the loss, are declining as well, having dropped by 42% since 2013.
Recently, music industry giants have seen a modest return to growth thanks to streaming. It is important, however, to consider that news carefully and insightfully: only a handful of artists are reaping the benefits—international stars with a global following.
ADISQ now estimates that 30 million streams are necessary in order for an album to be successful financially. Last year, the Quebec artist who came closest to that threshold received 8 million streams. The artist is actually an English-language band with a following outside the province. As you can see, 30 million streams is a very high threshold indeed.
In that landscape, it is untenable for rights holders to continue operating under an act that abounds with exceptions that are outdated, unwarranted, and unfortunately unique to the Canadian regime.
Cultural diversity is a principle Canadians hold dear, and content creators—authors, artists, and producers—are the pillars on which that principle rests. When they are no longer able to make a living from their craft, that diversity is directly threatened. It is happening as we speak. Fortunately, you have the ability to restore the power of a crucial tool to ensure the sustainability of a Canadian music industry that is professional and diverse.
As you can appreciate, urgent action is needed. In 2016, ADISQ was saying that the music industry had reached a tipping point, and now, two years later, we are edging closer to the point of no return. The time to turn things around is now.
There will always be music, to be sure, but will our music still be listened to?
Thank you.
