Canada’s music industry can proudly thump its chest with its ever-growing number of artists succeeding on the world stage, but the economy backing its infrastructure that provides equitable remuneration to its rank-and-file and developmental artists is in need of fresh grease.
Nielsen Music Canada has just reported the fact that as music streaming is exploding in the home market, only 34-percent of the active listening audience is paying for for a service, a number that pales by comparison to the adoption rate for Netflix. with an estimated 6.7M Canadian subscribers. and cable TV.
Traditional revenue sources that once pumped tens of millions of dollars into the music biz economy are now reduced to micropayments, and the euphoria backing the live attractions industry is itself under siege as travel and show costs balloon, and the once robust club scene withers as neighbourhoods become gentrified and rents necessarily soar.
Traditional music sales still pay the bills for record companies; however, more than 50-percent of these sales can be attributed to legacy artists and classic rock albums by acts that rarely tour or have key members resting in peace.
And it only gets worse. Music streaming is huge, but only 34-percent of Canadians pay for a service and, after various deductions, the payouts most artists receive will buy them a couple of buckets of KFC and a pasta salad.
Graham Henderson, president and CEO of trade org Music Canada, is fighting the good fight in Ottawa to close the financial disparity that tech firms reap from music and the payouts that music creators receive in the mail. The fact that he’s married to spiritedly independent Cowboy Junkies' singer Margo Timmins no doubt gives him a daily reminder that being famous doesn’t always deliver its due recompense and having a billion streams can amount to little more than an inflated sense of self-worth that has the equivalency of tens of thousands of (improbable) Facebook ‘friends’.
Henderson was in Ottawa yesterday (Tuesday, June 12), testifying in front of a committee struck by Heritage Canada that's exploring policy on how better to enhance artist remuneration in the digital age.
He’s been tarred and feathered by some in the mainstream media for suggesting we need to change how consumers currently feed their appetites for online content free-of-charge and having the audacity to argue that dominant players in the digital economy are making out like bandits from the absorption and delivery of content they have no skin in.
Henderson has some compelling ideas and is a warrior when it comes to taking on adversaries. He’s also worth contacting, as is Stuart Johnston who heads the Canadian Independent Music Association and is a fellow fighter for Canada’s unsung league of creators. Both walk on separate sides of the street, but, in more cases than not, they walk the avenue together.
Below, in part, is a transcript of what Henderson had to say in Ottawa on Tuesday.
“The origins of the Value Gap extend back more than two decades to a time when countries around the world, including Canada, began adapting and interpreting laws created in another era to protect telephone companies in the then-dawning digital marketplace.
“Around the world those laws understood the internet as a series of “dumb” pipes where your browsing habits were anonymous and the data travelling between sites was so vast it was unknowable. But twenty years later we know the Internet to be the “smartest pipes” humankind has ever made. Your web habits are meticulously tracked, and the metadata that they generate is collected, analyzed and sold every second of the day.
“While well-intentioned when they were created, the impact of these laws today is that wealth has been diverted from creators into the pockets of massive digital intermediaries, and what little is left over for creators is concentrated into fewer and fewer hands. As a result, the creative middle class is disappearing, and with it, numerous jobs and opportunities.
“There is no need to point fingers. No one planned for the creative middle class to suffer. The important thing at this juncture is to move forward purposefully and without delay to get the rules right. You should make absolutely certain that Canada’s Copyright Act ensures a creator’s right to be fairly remunerated when their work is commercialized by others.
“The foundation of the Value Gap is outdated safe harbour policies around the world. The announcement made last week by Ministers Bains and Joly that the Telecommunications Act and the Broadcasting Act will be reviewed, is an important step and in line with an international movement to find a solution to this problem. Safe harbours have been raised by other witnesses, and I hope that the committee will give significant consideration to addressing them.
“But right now, the Copyright Act is exacerbating the Value Gap by effectively requiring creators to subsidize billion-dollar technology companies. Here are four steps that this committee could recommend immediately that would help creators and harmonize Canadian policy with international standards:
1. Remove the $1.25 Million Radio Royalty Exemption
“Since 1997, commercial radio stations have been exempted from paying royalties on their first $1.25 million advertising revenue. It amounts to an $8 million annual cross-industry subsidy paid by artists and their recording industry partners to large, vertically-integrated and highly profitable media companies. Internationally, no other country has a similar subsidy, and the exemption does not apply for songwriter and publisher royalties – meaning that performers and record labels are the only rights holders whose royalties are used to subsidize the commercial radio industry. The exemption is unjustified and should be eliminated.
2, Amend the Definition of ‘Sound Recording’ in the Copyright Act
“The current definition of a “sound recording” in the Copyright Act excludes performers and record labels from receiving royalties for the use of their work in television and film soundtracks. This exception is unique to television and film soundtracks, and does not apply to composers, songwriters and music publishers. It is inequitable and unjustified, particularly in light of the profound role music plays in soundtracks, and it is costly to artists and record labels, who continue to subsidize those who exploit their recordings to the tune of $55 million per year. The Act should be amended to remove this cross-subsidy.
3. Amending the term of copyright for musical works
“The term of copyright protection in Canada for the authors of musical works is out of line with international copyright norms. Under the Copyright Act, protection for musical works subsists for the duration of the author’s life plus a further period of 50 years. By contrast, the majority of Canada’s largest trading partners recognize longer copyright terms for musical works, and a general standard of the life of the author plus 70 years has emerged.
4. Private Copying: Renew Support for Music Creators
“The private copying levy, originally intended to be technologically neutral, has been limited by various decisions to media that are effectively obsolete. This “important source of earned income for over 100,000 music creators is now in jeopardy unless the regime is updated.”
If you disagree, I suggest you contact Henderson and offer some plausible alternatives. If you are a freeloader, prepare to get your comeuppance because freeloaders are freeloaders and as such your opinions don’t count for much.
To read the complete transcript of Henderson’s brief, link here.