Good afternoon. My name is Caroline Rioux. I am President of the Canadian Musical Reproduction Rights Agency, CMRRA. I thank the committee for the opportunity to share our experiences and recommendations for amendments to the Copyright Act. I have prepared a few brief slides to assist you in following my presentation.
CMRRA is a collective that licenses the reproduction of musical works on behalf of more than 6,000 music publisher and songwriter clients. Together they represent more than 80,000 music catalogues, which comprise a large majority of the songs sold, broadcast, and streamed in Canada. CMRRA grants licences to authorize the copying of these songs to record companies that release sound recordings on the marketplace, such as CDs; online music services, such as iTunes, Spotify, and YouTube; and Canadian radio and television broadcasters.
Reproductions of musical works may be licensed under a tariff certified by the Copyright Board or by direct agreement with users. Pursuant to those licences, CMRRA collects and distributes royalties to rights holders after having carefully matched the usage data received from those users to the copyright ownership information in our database.
I am here today to talk to you about certain exceptions to copyright liability that were introduced in 2012. In the interests of time, I will describe the impact of only two of these exceptions. Unfortunately, there is insufficient time to cover the third item from my initial presentation, technological neutrality and the impact of the most recent Copyright Board decision on the rates applicable to online streaming services. This issue will nonetheless be covered in our written submission, because it is of critical importance to us.
With regard to backup copies, in 2012 a broad exception for backup copies was introduced. As a result, in 2016 the Copyright Board applied a large blanket discount on the established rate, reducing royalties payable since 2012 by 23.31%. In doing so, the board effectively took an estimated $5.6 million away from rights holders to subsidize already profitable radio stations. We firmly believe that rights holders should be compensated for these valuable copies. CMRRA recommends that the Copyright Act be amended to clarify that the exception for backup copies should be limited to copies made for non-commercial purposes only, consistent with other exceptions under the act, such as for user-generated content and time-shifting.
The second exception is “ephemeral copies”. Radio stations make copies of musical works for many purposes. Copies intended to exist for no more than 30 days are known as ephemeral copies. Until 2012 the ephemeral copies exception effectively addressed the concerns of both rights holders and broadcasters. Rights holders rightly wanted to be compensated for the reproduction of their works, while broadcasters wanted to minimize the onerous task of seeking licences from countless individual rights holders. Crucially, the exception did not apply where the right was otherwise available via a collective licence.
Following lobbying by broadcasters, the collective exception clause was repealed in 2012, giving the exception very broad application—but only to broadcasters. As a result, the Copyright Board reduced the royalties payable by up to an additional 27.8%, worth up to $7 million per year, provided that broadcasters could somehow prove they met the conditions of the exception. Ironically, the exercise of proving or disproving which reproductions actually qualify for the exception has introduced a significant administrative and enforcement burden on rights holders, resulting in the further erosion of the value of the right.
There is no reason why commercial broadcasters should not compensate rights holders when they themselves benefit so greatly from the copies at hand. CMRRA recommends that subsection 30.9(6) be reintroduced, in keeping with the original intention. That one user group or technology should benefit from an exception over another is not technologically neutral, and represents an unfair advantage to broadcasters.
In conclusion, given the ongoing difficulties caused by the exceptions introduced in 2012, we ask Parliament to refrain from introducing any further exceptions to copyright, but instead focus on addressing the erosion of copyright that has been caused by the existing exceptions. Traditional revenue streams have declined, but a robust copyright law protects against the pace of change by adhering to a principle of technological neutrality.
The exceptions outlined in this submission compromise that principle, and in so doing further erode the value of music and the value of creation. In addition to these recommendations, CMRRA asks that you improve the efficiency of the Copyright Board. We recognize that this has already been identified as a priority, and we appreciate Minister Bains' recently announced innovation strategy.
We also ask that you make the private copying regime technologically neutral, address the value gap by amending the hosting services exception, and extend the term of copyright for musical works to life plus 70.
Thank you.