Bill C-11: A Backward Step For Music Creators

Here is a simplified list of key provisions in Bill C-11, the current revisions to Canada’s copyright law that are expected to be passed shortly, and a brief explanation of why they do little to improve the lot of music creators, and in some cases are detrimental to our situation.

1) Format and Time Shifting, Back Copies
The proposed legislation would permit reproduction of a work for private purposes where the work is a lawful copy—and not merely rented or borrowed—and where the individual making the copy did not circumvent a technological protection measure. A similar right for making back-up copies is also proposed.

The problem: Music creators and publishers will essentially lose two revenue streams thanks to Bill C-11. One is the private copy levy, which was not extended to mp3 players and similar devices in the new law. Since the levy only applies to recordable CDs, and sales of those are falling dramatically, it is only a matter of time before this revenue stream virtually disappears.

Secondly, music creators and publishers currently receive “broadcast mechanicals”, a royalty paid by broadcasters when they make copies of songs for broadcast purposes. Bill C-11 eliminates this revenue stream.

2) Anti-Circumvention Provisions
Bill C-11 would prohibit the circumvention of technological protection measures used by rights-holders to secure and control their digital content.

The problem: Since little or no music is protected by these measures, and has not been for years, this provision will do nothing to reduce the billions of songs that are file shared every year and for which music creators receive no compensation. The SAC believes the monetization of music file sharing is the only sensible approach in any case. The model we propose is available at http://www.songwriters.ca/proposalsummary.aspx

3) Changes to Fair Dealing
Bill C-11 expands the existing categories of fair dealing exceptions to include dealings for the purpose of parody or satire as well as for education purposes.

The problem: Because the definition in Bill C-11 is so broad, this provision will almost certainly lead to years of costly litigation to determine what is “fair dealing” and what is not. Bottom line: Huge legal costs and less revenue for music creators

4) Changes to Statutory Damages*
Non-commercial infringers of copyright would face considerably less exposure to statutory damages. The range of possible statutory damages would be reduced to $100 to $5,000 per infringer and cover all past infringements.

The problem: This provision limits damages to an amount so small that suing will not be economically viable, except for those with the deepest pockets. Again, the SAC does not favour litigation as a policy against music file sharing, but we understand litigation may be the only recourse in certain extreme situations. In other words, if legitimate damages are in excess of the proposed limits, why shouldn’t creators and right holders be able to sue for the full amount of the loss?

* We have had further legal opinion on this matter that creators and right holders can opt out of statutory damages and seek legal remedy for full actual damages. The question remains whether statutory damages are set at appropriate levels.

5) Limited Liability for ISPs and Search Engines
The government has proposed limiting the liability of ISPs and operators of Internet search engines for the copyright infringements of their subscribers, in that they act as mere conduits on the Internet.

The problem: ISPs already have “safe harbour” protection in law and have claimed for years they are only “dumb pipes”. Without getting into whether this is true or not as many assert, it does create a situation where Internet service providers have little incentive to work with right holders to address the issues.

So Bill C-11 legislates less revenue for music creators, imposes more expenses in holding on to the revenue we do receive, and more confusion as to what are rights as creators are.

It is worth noting that members of the SAC board, as well as other right holders, have gone to Ottawa many times to deliver the message to government that this bill is not a good one for Canada’s music creators.

Bill C-11 makes it clear our advocacy work to improve the legal and business environment for our creative community is far from done.

Many thanks,
Eddie Schwartz
President, S.A.C.

Click Here to read Bill C-11.

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Does Spotify Make Cents for Creators?

There has been a lot written about Spotify in recent days. As of now Spotify operates in Europe and the US only, but there are very similar services in the works here in Canada, and the discussion below may well apply to them as well.

Some of the attention Spotify has received lately is because a growing number of independent record labels have stopped allowing Spotify to stream the music of their artists. The central complaint has been that the revenue stream from Spotify is so miniscule that it provides virtually no compensation for music creators and indie labels, while undermining sales of physical product such as CDs, which pay considerably more.

Spotify has responded by announcing that it has paid the music industry roughly $150 million over the 3 years it has been in business.

That may seem like a lot, but for those of us who write and perform music there is both much more to the story, and unfortunately, far less.

Let’s begin with the $150 million figure. Since that revenue was paid out over 3 years it averages $50 million a year. Keep in mind that although Spotify has only operated in Europe for most of that time, the music it streams originated with creators from all over the world, and so that $50 million must be split between creators and right holders in the US, Canada, France, Australia, the UK, Ireland, and many more countries around the world.

Now let’s compare revenue from other sources to get some perspective.

In Canada, our excellent performing rights society, SOCAN, collects about $250 million a year from radio, TV and other sources. BMI, ASCAP and SESAC, the US performing rights societies, collect an amount between $1 and $2 billion a year. Worldwide performance revenues are billions more. This all sounds like a great deal of money. But when it is divided among all the creators and right holders in the world it amounts to modest payouts to the vast majority. SOCAN’s average royalty payment to songwriters is in the area of $500 annually.

So the $50 million a year from Spotify when divided among the world’s creators and right holders amounts to payments that are far below other uses such as performing royalties, and in fact are microscopic for creators and right holders.

Some argue that this kind of comparison is unfair to Spotify because it is still relatively new and in time it will reach many millions more subscribers and pay a reasonable amount to those who write and perform the music.

Maybe. But after 3 years, Spotify has only 1.6 million paying subscribers in Europe, or less than one half of one percent of the population. That does not bode well for Spotify eventually reaching the size of audience that it would need to fairly compensate creators.

So the situation comes down to this: Music creators are being asked to subsidize a model that pays them very little now, and may never pay a reasonable royalty for the use of their work.

As we have seen with a number of independent record labels, some are just saying no.

Youth Not Wasted: Songwriter Inspires Her Peers

Many people complain about the youth of today.  They are often described as having a sense of entitlement that can lead to disappointment when they get to the real world.  How refreshing it is to see what S.A.C. Member Michala Todd is doing in her teenage years. She is working hard, growing her craft, and finding ways to make contributions towards society.  She’s only 18 and already has a Nashville album behind her!  We celebrate her dedication and how her music and the very course of her youth is serving as a positive example.  We can’t wait to see what unfolds before her!

In Michala’s words…

At a very young age, I have always been drawn to music.  I felt it was a way of overcoming my shyness, and I could really relate to others that had the same interest and passion as I do.  I’ve been singing and performing, and building on my music career for over 8 years, and my dream is to be able to share my music for the world to hear, and to have them feel connected to my songs.

With the release of my EP “Millions of Pieces”, I took the first step forward to making this dream a reality.  I had the opportunity to be involved in the writing process for the first time when I began working on this project at the age of 15, .  This being a completely new experience for me, I wasn’t too sure what to expect, but I was very excited to be working with two amazing songwriters/producers; Don Somerville and Michael Lee in Nashville.  Although I didn’t have much input the first time we met, learning how a song comes together was an interesting process.  In total, I was involved in 5 of the 6 songs on “Millions of Pieces”.  Most of my inspiration came from things that were happening around me in school.  Having my voice heard and translated into a song was very rewarding.

The song, “The Dare” off of the EP, was inspired by D.A.R.E, the drug abuse resistance education program that I am involved in.  For the past 6 years, I have been a “champion” for this program.  I am given the opportunity to travel around to numerous elementary schools and speak to students on the importance of staying on the right path and following their dreams.  I feel that this program is extremely important, especially with the peer pressures that the young kids today have to deal with.  Even if I can inspire just one student, it is already truly rewarding.  This song speaks about following your dreams, no matter what obstacles you may be faced with; take the risk!

Now, at the age of 18, I am continuing to work with other co writers, as well as working on songs of my own, in preparation for a full length album.  To all of the songwriters and aspiring songwriters out there, some advice I could offer would be to just write as much as possible, and to put any ideas or words down on paper.  It’s a great way to learn and develop your skills, and who knows, maybe a great song will come out of it!

Visit Michala’s Songwriters Profile.