Songwriters Association of Canada President Eddie Schwartz spoke with Vanessa Purdy at Toronto CIUT FM89.5 on December 14, 2011 about the S.A.C.’s music file-sharing proposal.
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.
Millions of music lovers have been “coloring outside the box” for years now in the form of music file-sharing using P2P and other similar methods. The SAC’s solution? Make the box bigger!
By licensing people who want to access music using P2P and other sharing technologies, we bring this massive new use of music into the fold. The revenues would be pooled and performers, songwriters and rights-holders would be paid for their work.
Folks who don’t want to music file-share would pay nothing. That’s one of the key differences between a license fee which the SAC supports, and a tax or levy, which the SAC does not.
Making the box bigger means expanding our idea of what are legitimate ways to acquire music. After all, people are going to use new technologies to access music. Trying to stop them, as some have done for the last 10 years and some continue to try, doesn’t make much sense.
So let’s embrace change. After all, it’s here, and more is on the way.
As many of you know, we at the Songwriters Association of Canada have been speaking and writing about monetizing music file-sharing in Canada and around the world over the last three years. Now it appears Brazil may well be the first country in the world to adopt a system to monetize music file-sharing. The Brazilian model differs from the current S.A.C. one in at least one aspect. While we have moved away from a “levy” applied to all internet accounts, which seems to be what our South American colleagues are suggesting, we now favor a “license fee” that consumers could opt out of if they did not wish to file-share.
We have said from the early days of our efforts that ultimately this approach must be world-wide, just as the collection and distribution of performing royalties is, and are very happy to see that creators in other countries are actively moving in a remarkably similar direction.
Here is what is a short summery of what is being proposed in Brazil:
Basically, non-commercial file sharing will be authorized – should the proposal be accepted and passed into law. Each broadband user will pay a R$3 (or US$1.71) fee together with her/his monthly Internet Service Provider (ISP) bill. The ISP will collect the fees and distribute it to a collecting society comprised of authors’ associations that will then distribute the collected fees to authors, composers, and so on in the proportion that the works are downloaded.
For more please follow this link:
By Eddie Schwartz
In recent weeks, the government has revealed details of Bill C-32, its long-anticipated revision to the Canadian Copyright Act. It is a complex piece of legislation and one that, if enacted, would affect all the creative endeavors in which copyright plays a role, such as music, movies, books, photography, and television, among others. The bill’s impact, or lack thereof, on the music industry is the focus of my comments below.
Bill C-32 comes at a time when there has been much talk that Canada is a “rogue” nation—that our current laws are inadequate to stop “piracy” and that we have become a “nation of infringers”.
One of the ways the Bill C-32 seeks to address these concerns is by harmonizing our copyright law with the United States and other World Intellectual Property Organization compliant nations. But WIPO compliance has not restored the music industry to health in the United States or any of the other countries where its provisions have been adopted. In fact, even more draconian measures, such as disconnecting file-sharers from the Internet are being experimented with in a number of European countries that are WIPO compliant. Just as a decade of lawsuits failed to stop or significantly slow the growth of file-sharing in the U.S., these efforts are likely to be counterproductive. File-sharers can easily employ available masking technologies and instead of ending “piracy”, it will simply be driven underground.
Under the proposed legislation it would be illegal to “break” digital locks, also known as technical protection measures or TPMs, used by the entertainment industry to control digital copying. In addition, infringers could be sued for up to $5,000.
Given that currently something in the order of 100 million unique songs without TPMs are already being shared over P2P networks in Canada and around the world, it’s difficult to understand what the government hopes to achieve by “locking the barn after the horses have run off”. Music file-sharing now constitutes well over 90 percent of all the music obtained on wired and wireless networks, and dwarfs all other means of distribution, including iTunes.
The Songwriters Association of Canada has proposed that Bill C-32 be amended to legalize music file-sharing in conjunction with a remuneration system for creators and rights-holders. Consumers who wish to file-share would be asked to pay a reasonable monthly licence fee. The revenue received could be distributed to performers, songwriters, and rights-holders on a transparent, pro-rata basis by one of Canada’s respected music collectives, such as SOCAN.
This one simple measure would not only go a long way toward eliminating the need for “locks and lawsuits”, but would create a new business model that would be fair to consumers and creators alike.
Apparently the government will hold consultations with interested parties later this year with a view to improving Bill C-32. Many of us who write and perform music for a living hope that the government takes a progressive approach to the difficult issues facing our industry, and moves beyond the failed policies of the last 10 years.
Rather than follow other nations down the copyright rabbit hole into a netherworld that makes less and less sense, Canada can lead the world to a forward-thinking approach that gives consumers the unrestricted access to music they want, while at the same time fairly compensating creators.
Eddie Schwartz is a Juno award-winning recording artist and songwriter, the president of the Songwriters Association of Canada, and a director of the Canadian Songwriters Hall of Fame. He represents the Society of Composers, Authors and Music Publishers of Canada in Nashville, where he resides with his family.
It was October 21st when Billy Bragg, Sawan Javad (Wide Mouth Mason), NDP’s Heritage Critic Charlie Angus and I were in Ottawa at a Press conference to talk about Canada’s Digital online challenges.
Canadian Press’ Jennifer Ditchburn’s article appears here: http://www.google.com/hostednews/canadianpress/article/ALeqM5h7DWd6762i_yzihYrpbI9yHK-bBQ
The Songwriters Association of Canada, under the leadership of President Eddie Schwartz, has worked tirelessly to ensure that a business model is created to fairly remunerate Canadian music creators and rights holders for the use of their works that are being file shared. The S.A.C. proposal can be found here:
This model is to address the fact that currently file sharing accounts for approximately 95% of the online activity and yet none has yet to pay creators for this use of their work.
The S.A.C. is determined to find a solution that works for music creators and right holders as well as consumers / music fans and file sharers and is equitable.
To let the S.A.C. know that you support this initiative, please sign onto the proposal at the link above.
In an Undercover.com.au article by Tim Cashmere, U2’s The Edge comments that something must be done to save the music industry. See the article here: http://undercover.com.au/News-Story.aspx?id=9831
When bands like U2 realize that their music is seemingly decreasing in value, the world pays attention.
The reality is that U2’s music is probably shared more now that it has ever been shared via peer to peer sites and other file sharing networks. An estimated 95% of the music activity in the digital space is on non-commercial sites and not currently paid for.
The S.A.C. is proposing a model to remunerate music creators for the use of their works for files shared on P2P sites and other bit torrent sites. A fair monthly fee to creators and rights holders for this use of their work will offer a revenue stream where there hasn’t been one since the first file sharing site started 10 year ago (Napster).
The fee would be collected at the point of access of the users music (ie: internet service or mobile providers) and then paid to those music creators whose music has been shared based on a pro-rata system, once files have been tracked through companies like Big Champagne.
Several recent studies have shown that music fans and consumers are willing to pay for their music. So why can’t we just facilitate making it possible through existing distribution methods?
This proposed model can be created with technology currently available.
Now all we need is the desire.
Come together everyone!