Industry Committee on Oct. 1st, 2018

[Gabriel Pelletier]

Yes.

I simply want to point out that, initially, the scriptwriters obtain the use rights. The SACD can negotiate rights for them because, traditionally, as I was saying earlier, they were originally freelancers, even for broadcasters.

Furthermore, Ms. Beaudry is confusing dramatic works and non-dramatic works. This is about dramatic works, and copyright applies differently. Our ability to negotiate is at stake. We give producers a licence to use the work. Once this is done, we obtain a share of the profits. However, as a result of the definition of profits, it's mathematically impossible to obtain royalties.

For example, the most popular film and biggest box office hit in Canada, Bon Cop Bad Cop, which you should all know, earned $8 million. Fifty per cent of the $8 million went to the theatre operators, which left $4 million. Between 25% and 30% went to the distributors. This left $1.5 million. In addition, since we're discussing profits, the film cost $5 million to produce. It's therefore impossible to obtain a share of the profits.

In other words, I'm asking today that creators be given the ability to negotiate.

[David de Burgh Graham]

Okay.

I have only 30 seconds left, and I'd like to ask the people from Telus a question.

It's just to finish off.

What is Telus's position on FairPlay?

[Ann Mainville-Neeson]

We supported the FairPlay proposal. We are not part of the coalition, but we did support the FairPlay application. The reason is that piracy is an important problem for Canada, and we believe as an ISP that we have a role to play and an ethical obligation, let's say, to ensure that piracy is addressed.

[David de Burgh Graham]

You weren't a member of FairPlay at the outset, so what caused a change of mind?

[Ann Mainville-Neeson]

It wasn't a change of mind. It is simply that we are not vertically integrated. We are not the primary owners of rights, and therefore we supported separately.

[David de Burgh Graham]

All right. Thank you.

[The Chair, Liberal, Dan Ruimy]

Go ahead, Mr. Albas, for seven minutes.

[Dan Albas]

Thank you, Mr. Chair, and I'd like to thank everyone here for their testimony today and for their expertise.

I'd like to start with Telus. I sincerely appreciate that you've brought up a number of small and reasonable requests. I think that basing it off some of the changes in the 2012 Copyright Modernization Act and getting feedback is very good. I appreciate that.

On your first recommendation regarding a single recording, would a single recording framework that is accessed by users, as you have recommended, align with the current laws around personal recordings and licences for on-demand services?

In my mind, a single copy saved on a server sounds more like a version of on-demand service rather than a personal recording.

[Ann Mainville-Neeson]

It's all about who is making that recording.

On an NPVR it's no different from someone who has recorded on their device at home, on their home PVR, except for the network provider, since we are also providers of on-demand content; therefore, we negotiate those rights and we pay for those rights, but that's in order to offer the programs to people who have not recorded and who decide to look through our menu and access some of the great content that we have to offer. In the case of an NPVR, this is someone who has chosen to record something, and they are doing so in a general cloud space.

Operators of that cloud question why they should have that excessive duplication, with so many copies of the same thing being stored. It's also not ecologically friendly to have so much storage of the same things, so it's simply a back office request in order to streamline and have that single copy. Only those who have selected the record would have access to that single recording, and we would have the metadata and whatnot, other information to ensure that if someone started to record five minutes late, they would only access that program starting five minutes late.

[Dan Albas]

The reason I ask is that these statutory reviews happen on a regular basis, although maybe not as quickly as some would want. However, that didn't quite answer the question, because, again, if you have one copy that's being passed out, it does sound like more of an on-demand service than like someone choosing to record something for their personal viewing later on.

Again, I just worry about some of the content holders who may form deals with Telus and other companies like yours, who may say you are violating the terms of the arrangement because it's less of a personal recording and more of an on-demand service.

[Ann Mainville-Neeson]

That's why we want to limit our proposal to that personal relationship with the recording. It's so the person who makes that recording is the only person who can access that recording, as opposed to an on-demand service whereby anyone who wants to watch a program can access it, the difference being that we're not proposing that we as network operators simply record everything for later access by people who have recorders, nor do we propose that people be able to have indefinite amounts of storage so that the user ends up recording everything.

We are proposing essentially replicating the home PVR on a network, but streamlining it so that you don't have as much waste. Waste is not conducive to innovation.

[Dan Albas]

Thank you.

Your second recommendation specifically talks about strengthening innovation in Canada by allowing new technologies and services to come to the market without taking much of a risk, or a huge risk.

Can you give us some concrete examples of these new technologies and services that you have in mind?

[Ann Mainville-Neeson]

For example, there's the NPVR; for example, there are new business models, which, as we mentioned with respect to notice and notice.... I'm trying to think of innovation on a more general perspective, but when we talk about notice and notice, we'd like automation, and more automation leads to potential errors. The error rate can never be brought down to absolute zero, which means that we'd be taking that risk by putting more automation into our notice and notice regime or execution. We're exposing ourselves to that risk, which is unfortunate, because we are facing increasing costs and an increasing number of notices to forward.

[Dan Albas]

We had testimony last week about more of a standardized notice and notice regime, as well as limiting what content can be included in that. You're in favour of that, then.

[Ann Mainville-Neeson]

Absolutely.

[Dan Albas]

You also say that grossly disproportionate damages have been assessed. Can you give us a concrete example?

[Ann Mainville-Neeson]

No, because in the instances of disproportionate damage, it's more about the risk of innovation not coming to market because of that fear, the idea being that under the act there is no limit.

It means that if we decide to implement something that ultimately ends up being non-compliant, something we implemented in good faith.... As we've heard from other testimony today or previously, applying and interpreting the Copyright Act is very complex, so the concern is more with that potential of people not bringing things to market because of the potential for great damages.

I'm not suggesting that this has actually occurred in the market, that there's an example of someone facing significant risk. Instead, it's the fact that things are not being brought to market at all, which is an even worse case for Canada.

[Dan Albas]

I recognize the point.

Let's maybe talk about innovation that is happening right now. There is a considerable amount of innovation on online platforms—for example, YouTube and Twitch. A number of users have often said they are putting forward content in good faith and have still been hit with copyright infringement notices.

Do you see that space as one that the law needs to better manage?

[Ann Mainville-Neeson]

It certainly is, on many fronts, whether you're looking at piracy or this notion that there are copyright infringement notices that are fraudulent or that are being abused for whatever reason, through phishing exercises, which cause security concerns. I think there are definitely concerns.

We receive hundreds of thousands of notices per month. Many of those may not be from actual copyright holders.

[Dan Albas]

That would be one aspect. There are some people who are utilizing the notice and notice regime for their own nefarious ends. I think that's something we should take note of.

Again, I specifically referenced YouTube and Twitch. A lot of young people are using those platforms. A lot of not-so-young people, I would say, utilize those platforms. This is your chance to talk about the way the law operates in terms of that.

As an Internet service provider, do you have any insight as to where we can make that regime better?

[Ann Mainville-Neeson]

Well, as an Internet service provider, we're distributing the content. These services are being used by our customers, but we don't have insight as to what notices of infringement YouTube might be receiving. YouTube will also receive some notices of infringement, as would the ISP. I think your question is better directed at those particular platforms.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Angus.

You have seven minutes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Chair.

I want to thank the witnesses for their presentations. As a musician and writer, I fully understand the need to respect copyright and the important need for Parliament to implement legislation that will ensure a good environment for the creative community.

This subject requires me to be very clear, so I'll ask my questions in English.

Madame Dupré, in terms of getting revenue streams for musicians and songs, you mentioned YouTube. What is the regime right now for collecting royalties from YouTube?

[Marie-Josée Dupré]

I worked at SOCAN, the collective that manages the public performance of music. If I remember correctly, there are some licence fees that are paid by YouTube, but not necessarily for all of the user-generated content. These are experimental licences unless that has changed.

Right now, what we received as a decision from the European Parliament is that the statutes are voted on, and then each of the countries in the EU will have to make sure that they adjust their copyright acts so that all of these platforms have the obligation to pay licence fees. Even though the content is not theirs specifically, they have a responsibility as a broadcaster—I'm not using the right word—to make sure that they compensate the rights holders.

[Charlie Angus, NDP, Timmins—James Bay, ON]

My hair is grey, and I'm old enough to remember that there were no glory years for musicians in copyright. We were always robbed.

One year I co-wrote the video of the year, and I told my wife, “This is our year, honey. We're going to get the big money”, because we were in heavy rotation. My cheque was $25.

At that time, the cable networks that were running TV shows claimed they were not making money off of them and that they were offering a service to musicians. SOCAN fought that, and we changed the legislation. Then of course, cable networks went out of business.

When YouTube started, everyone said, “Well, they just got started in a garage, and they're young upstarts.” Now they're part of the biggest corporate entity in the world, Google. Everybody I know shares music on YouTube. I live on YouTube.

SOCAN is able to go after hairstylists and little restaurants to pay copyright fees. Wouldn't it be better if we just had blanket copyright legislation so that for people who were posting songs or making videos out of songs, there was a blanket fee that could be distributed among artists, as we did with cable television and in other areas? Would that provide a guaranteed revenue stream for the use of music on YouTube?