Industry Committee on Oct. 29th, 2018

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Longfield, you have five minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks, Mr. Chair.

Thank you to all the witnesses. It's a very technical discussion we're having in a very short period of time.

Mr. Petricone, again, thanks for meeting with us when we were in Washington.

I'm wondering whether you've seen some of the same discussions around the revenue share between the creators and the providers of technology in the States. Have the creators in the States had the same kind of drop in revenue that we've seen in Canada?

[Michael Petricone]

It depends on how you want to measure it. One aspect of these new technologies is that they've changed the revenue stream, so not only might there be more or less revenue coming in, but it's also going to different groups.

However, there is some good news. According to the RIAA, the Recording Industry Association of America, the first half revenues in the music industry in the United States are up 10%, to $4.6 billion. Most notably for us, 75% of those revenues come from streaming music.

Clearly, the music industry went through a period of disruption with new technology. That is not uncommon. Now what they're doing is meeting the consumers' needs, because consumers want streaming music. They want to be able to listen to their music anywhere on a variety of devices. Now, the record labels are enabling that and the revenue is coming in. So, as we get through this period of transition, the picture looks quite bright.

[Lloyd Longfield, Liberal, Guelph, ON]

Is that something the technology companies are doing voluntarily, or did you have a change in legislation and regulations in the States around how streaming is handled?

[Michael Petricone]

We just passed a law in the United States called the Music Modernization Act, which basically streamlines how digital music is paid for and incorporates pre-1972 music into our system, because before it was a state-by-state policy, which was unhelpful if you're trying to run a national business.

In what has become emblematic of the entire debate, the passage of the Music Modernization Act not only was bi-partisan in Congress but also included all the stakeholders of record labels, publishers, artists, streaming platforms.... At first, when the new technology came out, it was quite adversarial and fractious, but I think there's a growing realization that we are all part of the same ecosystem, and if the ecosystem is healthy, we all benefit.

[Lloyd Longfield, Liberal, Guelph, ON]

We've been trying to get some witnesses from the American streaming services to testify at our committee. We're still in the fractious state, I think, in Canada. The creators are getting paid fractions of fractions of pennies per stream. They need millions and millions of streams to try to make up for lost revenue.

There was a pivot point at some point in the discussion in the States. How long ago was that?

[Michael Petricone]

I think it has been gradual, as consumers have been adopting streaming music.

[Lloyd Longfield, Liberal, Guelph, ON]

Okay. Thank you. That's definitely something that we need to include in our study.

I'll turn to OpenMedia.

We've had a lot of conflicting testimony, which is why we do these things. We don't want everybody agreeing. I'm wondering where you would sit in terms of the protection of revenue for creators when you look at, let's say, things like resale right, reversionary right, for copyright to go back to the artist after a set amount of time, or granting journalists remuneration rights so that people who are using photos, as an example—revenue used to go to the original photographer.

How does that fit, in terms of the openness you're describing to us today?

[Laura Tribe]

I'm not familiar with the details of all of the proposals that you've put forward, but I would say that, generally speaking, as I said earlier, we do believe that creators should be compensated. I think that if there are copyrighted images that are being passed around by journalists that have had their content—they should make sure that that's being used fairly and appropriately.

I think there are a number of challenges in making sure creators are compensated. What we're looking at is trying to find ways that make sure that is available—specifically, the angle we're going for is making sure people are able to access the content they're interested in and they want, whether that is through the ability to legally license that through streaming services or whether that's through paid news sources where they're accessing content because it's something that matters to them.

If there's a specific proposal within there that you'd like me to dig into a little more to see how it fits against the openness....

[Lloyd Longfield, Liberal, Guelph, ON]

The chair's looking down, so he's looking at the clock right now. I'm over time.

[The Chair, Liberal, Dan Ruimy]

Thanks for reminding me.

[Voices]

Oh, oh!

[Lloyd Longfield, Liberal, Guelph, ON]

There's a lot I could dig into, but unfortunately, I don't have the time.

Thank you for your testimony.

[The Chair, Liberal, Dan Ruimy]

I was ignoring you so that you could keep going.

Mr. Lloyd, you have five minutes.

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

Thank you.

Ms. Tribe, you talked at length about the USMCA, or NAFTA 2.0, and its impacts on this copyright study, because it's a very fluid environment. I was wondering if you had any comments, in terms of the study, on any recommendations we should have in light of the context of the new NAFTA to promote users' rights in the context of the deal.

[Laura Tribe]

Absolutely. I think the number one thing is we need to actually expand what fair dealing looks like, and fair use, to bring more balance to that. Our concerns with what was agreed to in the USMCA is that it shifts into a more heavy-handed copyright regime without providing anything for users in exchange. What we're really looking for is expanding fair dealing, potentially adopting the U.S. model of fair use to just broaden it more wholeheartedly.

Marie, I'm not sure if there's anything else you want to add on the things he asked for.

[Marie Aspiazu]

The only thing I would add is that we would definitely want to keep our notice and notice system as opposed to taking the U.S. notice and takedown system, which is a lot more restrictive.

However, as I mentioned in my part of the testimony, we can definitely tweak the notice and notice system, especially in terms of the language in the notices and the settlement fees as well as some of the more technical aspects and the ways in which ISPs are asked to deal with these notices, which can be very burdensome.

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

You mentioned “heavy-handed”. Can you give us some examples of heavy-handedness?

[Laura Tribe]

I think looking at the copyright term extensions is a good example. We're hearing a lot of arguments here and we're discussing a lot of ways that creators need to be compensated. Extending copyright terms from 50 to 70 years after the life of an artist does not compensate that artist.

We're talking about creators who are looking to be paid now, and that has a lot of challenges; but extending it from 50 to 70 years after their death harms the public. That harms people who are no longer able to access that information in the public domain for another 20 years. We will have a 20-year period in Canada where no new content enters the public domain once this deal is adopted, without any real justification for how that's going to help people in Canada.

Kelsey, did you want to add something?

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

Isn't that the consensus around the world, though, the 70 years after the death of the author?

[Kelsey Merkley]

We are seeing a definite move towards that. I'm—

[Laura Tribe]

We're seeing the standard of 50 increasingly move to 70 with pressure from the United States.

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

Where is the standard 50?

[Marie Aspiazu]

The international Berne Convention, which is—

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

Every European country is 70, America is 70, so which countries are we talking about?