Industry Committee on June 14th, 2018

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

But I've seen recently the Ontario government announce in 2013 some $45 million to help producers in the province of Ontario.

Maybe this question would be good for Mr. Baptiste. Are you finding that the government assistance...because we're being asked to consider putting levies on consumers to increase revenues for creators, yet the government's also being asked to provide more taxpayer support for the industry.

I'm just wondering, is there something wrong with the amount of money that's being given by the government in this case, or are there ways that that can be changed to better suit taxpayers?

[Eric Baptiste]

We're not here to ask for subsidies or funds. The interim proposal in the private copying submission is just that, an interim or bridge measure. In an ideal world, what you would like Parliament to do is to just change the language to make sure that the Copyright Act has a private copying regime, as intended in 1997—but obviously, a bit awkwardly—so that it would become tech neutral and would be able to deal with any means Canadians use to copy music onto devices, or whatever the world of technology will throw at us, to your point.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you.

I'll pass it on to my colleague.

[The Chair, Liberal, Dan Ruimy]

You have a minute.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Great.

The CRTC enforces quotas for Canadian content, and those quotas are often based on...CBC radio, and how much is played on Canadian media. I guess what I'm looking for is, how do popular Canadian artists who get play on American stations, and who are popular in the U.S. and around the world—the Shawn Mendeses, the Justin Biebers—fit into those quotas the CRTC puts into place?

[Eric Baptiste]

That is a very important point. We are enjoying an amazing time in Canada. We have global superstars who dominate the music scene, and most people here would share my view that the Canadian content elements put in place have helped create an environment that is conducive for these green shoots to take root before going to external markets. If you don't have a market at home that enables you to test drive your music and talent, it is much more difficult to start in the U.S. or Europe.

We are very proud of the fact that these artists, creators, and SOCAN members benefit from those regulations, provided that the criteria—which are quite smart and flexible—are met. It is a mixture of whether you're Canadian, or whether the sound recording was fixed in Canada, and so on, and whether these criteria are met. They are mostly met. That's a key difference.

Some members have asked about the growth of the pie, noting that some artists or creators are not feeling the growth themselves. Most of the growth has come from digital services, like streaming services and user-uploaded content, which have no such regulations. It's the usual free-for-all. We are a very open country. We are a country close to the United States, which has the most powerful entertainment industry in the world. We are open to Europe as well.

Because we distribute the money we collect according to actual usage, if we say that 35% of content on Canadian radio has to be Canadian, then at least 35% of the royalties we collect will go to Canadian rights holders. If on a streaming service there's no such regulation, and only 3% of the music consumed there is Canadian—I'm not giving you exact numbers, although we have them—you don't need to be a specialist in math to understand that the money collected goes to other creators in other countries.

It is also imperative to ensure, through broadcasting regulation and not copyright regulation, that Canadian content is at least discoverable on those services. You cannot force people to click on a clip or listen to a song. People are free to choose; it's not like a radio station. However, Canadians should at least know about the availability of Canadian music so they can decide whether they want to listen to it or not. It's a key element that needs to be taken into account, and it explains some of those apparent discrepancies. They all have very good explanations.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Jeneroux.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Mr. Chair.

I'd just like to follow up on some of his testimony. As a suggestion to you and the clerk, it may be interesting to invite an artist or two who has experienced this, and perhaps somebody who has a label of their own. I'm sure a number of us have names coming to our minds. Maybe Drake or somebody like that?

[The Chair, Liberal, Dan Ruimy]

Drake? Yes, sure.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

He might be somebody who interests you, Mr. Chair.

[Voices]

Oh, oh!

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

On your cellphone.

I'm sure there are lots of suggestions out there, but I think inviting somebody along those lines might be worth pursuing at your end.

[The Chair, Liberal, Dan Ruimy]

Thank you very much for that intervention.

We have discussed this in committee. Even though we're meeting with a lot of organizations, it would be interesting to have artists with that type of influence here to answer questions. That would be helpful, so if you know anybody you would like to throw our way, send suggestions to the clerk.

[Eric Baptiste]

I've got my CDs, and right now I understand that the Beijing treaty is about audiovisual performances. To the best of my knowledge, we have no issue in the music business with the Beijing treaty. Maybe other witnesses you've seen here from the TV or movie industry have issues with it, but it's never been raised as an issue at SOCAN, for example.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Longfield, you have five minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair.

Thanks for a wide-ranging discussion here.

I come from a distribution background, a different type of distribution—industrial distribution. I'm trying to understand the efficiencies in the distribution system where we have SOCAN working on certain aspects. I have seen on your website the Layla system and some new digital tools that publishers can use to track income and distribution, the operational costs of SOCAN and how those might have changed over time.

Mr. MacKay, I'm thinking of how you're working with bilateral agreements with other countries, helping the artists get paid for their music. Of course, 80% of the revenue is going to the members, according to your website, but you still have your own operating costs.

CPCC also has operating costs.

How do we compare with other countries in terms of our support of the industry? Do we have a similar layered approach similar to other countries? Could you comment on how it might compare with the book-publishing industry, as an example?

[A voice]

[Inaudible—Editor]

[Lloyd Longfield, Liberal, Guelph, ON]

I'm sorry, Solange. I wasn't trying to cut you out.

[Solange Drouin]

No, that's okay. It's no problem.

[Eric Baptiste]

You did your homework, and thank you very much for your interest.

Yes, at SOCAN we believe very much in transparency and accuracy. We are obsessed about data points. We believe we hold, through our efforts, one of the world's best databases of sound recordings. We control the information of about 66-million sound recordings, 27-million songs, etc.

Layla is an effort to introduce drilled-down information to enable clients of the reproduction rights service, which we own in Audiam, to really follow in real time how much money has been made on YouTube, on Spotify, and Apple Music. We believe in that. We want to make that available to everyone.

Technology is not the enemy here. Technology is a disrupter. Technology has created challenges, and we believe technology is the solution to problems caused by technology. By having more transparency and by investing in good systems and data, we can automate most of the matching between reports we get from, say, Spotify or YouTube, with the information we have. We can identify most of the long tail at reasonable costs.

SOCAN's cost is about 10%, so 90¢ gets returned to the members. We are one of the most cost-effective collectives of this size in the world, and our costs over 10 years in constant dollars have actually gone down, so technology is really helpful.

[Lyette Bouchard]

Maybe I can just add that CPCC is an umbrella collective. We collect the money and then distribute it to the members of our collective. It's comparable to what is done in other countries.

Correct me if I'm wrong, but SORECOP in France works the same way. It's an umbrella collective. It receives the money, the levy, and then distributes to the different representatives of authors, publishers, sound recording companies, and artists.

It's comparable to the other systems in Europe, for instance.

[Lloyd Longfield, Liberal, Guelph, ON]

Okay.

[Ian MacKay]

For Re:Sound I can echo some of what Eric was saying in terms of the importance of data. I mentioned before that we had fought very hard before the Copyright Board to get full, 365-day radio logs from radio stations before we got a sample.

[Lloyd Longfield, Liberal, Guelph, ON]

Yes.

[Ian MacKay]

We're getting a lot more data. We need to manage that data much more cleverly and cost-effectively.

We have then worked with organizations like Bell Canada, the broadcasters, in making sure that with the ISRC codes, the standard identifiers, the labels used are getting from the labels to the radio stations, and the radio stations are ingesting them automatically. They used to take what they received from the record companies, manually transcribe it, and then send us logs based on that. They are now doing it all automatically, so we're getting standard identifiers back from the radio stations. It closes the whole loop and allows us to do things much more efficiently.