Industry Committee on Dec. 12th, 2018

[Dan Albas]

I appreciate that. If you look at the United States, whether in terms of IP or creation of new works or whatnot, it's not just population. You could chalk it up to economic development. There are many different aspects, so certainly I appreciate the conversation here.

Some witnesses have suggested using terms like “such as” to elucidate or pronounce where a starting point would be, and then letting the courts eventually determine where that limit is.

Is that something both of you would support, or do you believe that going to an actual fair use versus fair dealing model would be better?

[Prof. Carys Craig]

I think we shouldn't get hung up on the language of whether it's fair use or fair dealing. In fact, I think simply adding the words “such as” arguably makes it much more like a fair use defence, as that term is used, but our focus should be on whether it's open, whether it's general, and whether it's flexible, and the words “such as” will achieve that.

Plus, I think codifying the fairness factors from the Supreme Court would be helpful in giving that a little bit more clarity.

[Dr. Meera Nair]

I would agree.

It's also important to remember that our fair use or our fairness factors, which were developed by our Supreme Court, are actually more in tune with Canadian events. Particularly in the 2004 CCH case, one of the elements our judiciary brought in was this aspect that the presence of a licence is not relevant to deciding whether a use is fair. I think it is important that we keep that front and centre, because that is where the United States went off the rails for a little while, when they started attributing fair use as being applicable only as an antidote to market failure.

I think as long as we are following what our courts have already instructed us, then, yes, “such as” and our own framework of exploration in the act would be very good.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

At this point I believe, Ms. Craig and Ms. Nair, we have a vehicle ready to whisk you away to the airport, if you would go with the clerk.

[Prof. Carys Craig]

Thank you very much.

[Dr. Meera Nair]

Thank you very much.

[The Chair, Liberal, Dan Ruimy]

Thank you very much, and once again, our apologies about the inner workings of the House. It happens.

[Prof. Carys Craig]

We appreciate your attention and we appreciate you taking the time.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

If we have any further follow-up questions, we will send them to you.

[Prof. Carys Craig]

Feel free to do so.

[Dr. Meera Nair]

Thank you very much.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Masse, you have the floor.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

Thanks to the witnesses who are leaving here, and as well to Ms. Tarlton of Ticketmaster for being here.

My question to Ticketmaster is with regard to the resale of tickets and artists' compensation. In 2003 Ticketmaster purchased TicketsNow, and then there was a prohibition on the resale of tickets. However, last year the Ticketmaster parent company, Live Nation, along with Maple Leaf Sports and Entertainment, lobbied the Ontario Government to change its policy for resale, which had been in place for 30 years. Since that took place, it has cost consumers millions of dollars.

I'd like to know how much Ticketmaster has profited from this new policy change and how much Maple Leaf Sports and Entertainment has profited. Also, to compare, how much have artists profited from this change in policy?

That's what I think I'd like to know to start with, please.

[Patti-Anne Tarlton]

You're referring to the Ontario provincial legislation?

[Brian Masse, NDP, Windsor West, ON]

I mean the sale of tickets now has increased profit margins, so where is the distribution of those profits and that resale money going? I'm wondering how much of that split is going to Ticketmaster or Maple Leaf Sports and Entertainment—I know you worked there before—and to artists, now that millions more dollars are being brought in for shows.

[Patti-Anne Tarlton]

The commercial terms in both primary and secondary and marketing partnerships in today's digital age are comprehensive, so there isn't one answer that will cover the entire industry. The specifics of the terms of those commercial arrangements are not public.

That said, you spoke also to the change in policy, and I think you are referring to the Ontario legislation, which allowed resale to happen in a sanctioned way in this province, in Ontario, and yes, we are very supportive of it. The reason is that it allows for those of us who are investing in the safe technology and the safe buying experience to—

[Brian Masse, NDP, Windsor West, ON]

I'm not looking for that. With the increased revenue streams coming in, I'm looking for how much the artists or creators have benefited from resale or secondary ticket exchanges—“primary”, “secondary”, or whatever terminology is fine with me—as there has been more money made off their performances. Do they benefit, and how can it be quantified?

[Patti-Anne Tarlton]

The industry is working in partnership. It's all about the balance of supply and demand and pricing. At the same time that we're building out safe resale environments, we're building out pricing tools so that the pricing can be market value. Artists and teams and such attractions as Broadway will be able to sell the tickets at closer to a market rate so that those revenues stay in their ecosystem.

The challenge we've had in the past is that those tickets do get traded when supply doesn't meet demand and market forces price them above. They are sent into third party environments that those artists do not benefit from.

[Brian Masse, NDP, Windsor West, ON]

What percentage of the resale or secondary market does Ticketmaster give to artists for a ticket? You put them out if you're a holder, and then they're resold for something if it's a hot show or whatever it might be. How much does the artist get percentage-wise of that resale as the market price then escalates?

[Patti-Anne Tarlton]

As I said, every attraction is its own business. Every venue, every touring attraction, every business has its own commercial terms. There's no one answer to that.

[Brian Masse, NDP, Windsor West, ON]

No. You would expect, then, that smaller shows would be differently compensated for resale than larger shows? Is that generally what you're saying—that every act is different in terms of what deal they can cut?

[Patti-Anne Tarlton]

What I'm saying is that what we will continue to do is invest in technologies to get tickets into the hands of the fans who want to see those attractions at the prices the attractions want those tickets to be issued—

[Brian Masse, NDP, Windsor West, ON]

Investing in technology is fine. That only helps your company and your process, because it controls the actual resale market. It now goes on Internet devices and so forth, as opposed to the traditional, for the person on the street.

What I'm interested in, though, is whether there's a difference for the actual creators. You're investing, obviously, to get a profit on return, but on the street the artists aren't getting anything from that resale. Putting aside the whole ethical issue of the resale of tickets virtually before they even enter the marketplace, what are artists getting out of this? Are they on their own individually to enter into separate contracts from Ticketmaster? Is that it? Do they have their own individual, separate contracts, whereby they'll each get maybe 1%, 10%, or 20%? What types of thresholds are we looking at for artists to be compensated for this resale?

[Patti-Anne Tarlton]

Again, we work in partnership with artists. We are investing in new mechanisms to right-price the tickets so that that money ends up in the hands of the artists. We use different technologies to....

We're not in the game of trying to promote resale. The resale is a safe environment, but really, we would prefer to sell tickets at the right price and keep them in the hands of those fans.

[Brian Masse, NDP, Windsor West, ON]

Does Ticketmaster withhold certain sales of tickets, then, to actually watch the price increase or decrease? You're saying you release all those tickets, and then...?

You lobbied to change a system here, and I want to know how much artists are actually benefiting from this, especially if other prices are arranged. Are you confirming that it's up to each individual act or artist to actually cut their own deal? What would those thresholds be? I'm not talking about a specific deal. Are some getting 100% of the increase in the cost? Are some getting 1%? Is it 50%? What's happening with this?