Monthly Archives: May 2013

Why the Copyright Board of Canada is essential

Published 05/30/2013

By Gilles Daigle

The Copyright Board of Canada is mandated by Parliament to hear and determine a variety of issues relating to copyright, including setting the royalties to be paid for the use of music. The Canadian Copyright Act, first passed in 1921 and amended regularly since then, gives music users (such as radio and television stations, Internet music services, etc.) the right to use copyright-protected music in exchange for the payment of royalties set by the Board.

Music users and owners of musical works often disagree on what the royalties should be. The role of the Copyright Board is to consider their respective arguments and evidence (which is usually complex economic valuation evidence) and to set royalties that are fair and equitable, in a manner than balances the interests of both sides. This is not an easy task, especially in this era of new Internet technologies and changing business models. But the Board must address these issues and it does so to the best of its ability and limited resources, often acting as the world leader on these new fronts.

The challenges involved in assessing the value of streaming and downloading music – while attempting to balance and reconcile the interests of digital music businesses and their consumers, with fair royalty payments for the songwriters and music publishers whose works stand to become the lifeblood of their online economy – is daunting, to say the least. Now, more than ever, the work of the Board is crucial in attempting to achieve and maintain this delicate balance.

The “music is free” attitude that has taken root among many music fans around the world is very much threatening the livelihood of songwriters and the other rightsholders in the music world. Royalties from licensing are how songwriters earn a living, and new technologies are often being developed and monetized by using music content without compensation.

More and more, songwriters are feeling threatened. In recent amendments to the Copyright Act (Bill C-11), the significant broadening of exceptions and the changes in the broadcast mechanicals regime stand to benefit digital music corporations that now find it even easier to profit from the fruits of songwriters’ talent and hard work without fairly compensating them. The refusal by government and the courts to make the private copying system technology-neutral by extending it to devices like iPods is a clear sign that corporate interests are once again trumping songwriters’ rights. A July 2012 Supreme Court of Canada decision similarly took away the right of songwriters to earn performance royalties from downloads, despite the fact that many countries around the world provide that source of remuneration.

The Supreme Court ruling was widely reported as a “victory for the Canadian consumer.” But there’s no significant difference in price for business models in the few countries that don’t collect this small royalty compensation for downloads, compared with the U.K., Germany, France, Australia, Japan, Brazil and the many other countries that do. The reality is that Canadian consumers have not and will not see a savings, while composers do not receive full compensation. That’s unfair to the songwriters and consumers alike, leaving the music service providers with windfall revenues they can add to their bottom line. These are the very type of considerations that illustrate why the Copyright Board’s proceedings, which allow for the full presentation of all relevant evidence and considerations, remain crucial in establishing a fair and just balance between the rights and interests of all parties connected to music creation, use and consumption.

For example, recently the Copyright Board of Canada dismissed an application filed by the Canadian Association of Broadcasters to rescind a commercial radio tariff requiring license fees for making copies of music in order to broadcast it. The proposal would have eliminated the compensation that songwriters and music publishers now earn from broadcasters when reproductions of their musical works are made and used for broadcasting purposes. This is a most important source of revenue for songwriters and publishers and the Copyright Board determined that the matter required a full hearing, to fully consider the new legislation that the broadcasters were relying on, before coming to any final conclusions. The matter will be heard before the Board in October 2013.

In light of a troubling trend that appears to increasingly favour major corporate interests over the Canadian creative economy, it’s essential to preserve the Copyright Board’s crucial role in balancing the rights of all stakeholders in the digital music ecosystem. The Copyright Board of Canada is the best available avenue to ensure that digital music businesses can thrive, consumers can access all the music they want, and songwriters can receive fair compensation for the use of their music. These issues are most complex and require the expertise of a specialized tribunal for proper consideration and determination.