In these politically charged times, there is a tendency to view many policy issues, whether they be same sex marriage or tax reform, through a narrow lens — left or right, blue or red, liberal or conservative. The same is true for copyright issues.
The University of Toronto recently hosted a major conference on music and copyright law where some participants were quick to label positions as either liberal or conservative. Professor Terry Fisher of the Harvard Law School, author of Promises to Keep, a groundbreaking book on technology, law and the entertainment world, staked out the so-called liberal perspective, presenting his long-term plan for reconciling the divide between the industry and its customers. Fisher argued for an alternative compensation system — one that would grant the public unlimited access to online music while providing substantial compensation to the music industry to be generated through tax revenues.
Graham Henderson, the president of the Canadian Recording Industry Association, spoke after Fisher and countered with a conservative, George W. Bush-like view based on "values" and free markets. Calling him "Comrade Fisher," Henderson argued that the industry was fundamentally opposed to proposals that would replace a market-oriented approach where sales determine revenues with new alternative compensation systems. In his view, the music copyright issue would be best addressed by "digital rights morality" and by faith in the free market.
While the incongruity of an industry that has mistakenly sued teenagers and dead grandmothers preaching the need for greater morality is notable, it is this industry's professed love of the free market that is worthy of more detailed discussion. In fact, contrary to claims of faith in the free market, the music industry has been a leading proponent of government involvement, consistently seeking both financial support and legislative intervention from Ottawa. Consistent with most countries, Canada has never adopted an exclusively market-oriented approach to copyright and culture. This is reflected in our division of copyright policy responsibilities — the Copyright Act is officially administered by Industry Minister David Emerson, while the Department of Canadian Heritage Act grants responsibility for the formulation of cultural policy as it relates to copyright to Canadian Heritage Minister Liza Frulla. This duality suggests that copyright policy must consider both economic and cultural goals. Were Industry Canada to adopt an exclusively economic-based approach, it might eliminate government programs supporting the arts on the grounds that it is the market that should determine Canadian cultural activity.
Similarly, a single-minded focus by Canadian Heritage on cultural goals would risk the development of extreme copyright policies that place the interests of the culture sector ahead of the broader economy and the public interest. Since a market-based approach to music would presumably lead to no government funding, the industry has unsurprisingly ignored its own advice and sought millions of dollars in taxpayer assistance. For example, at last November's music lobby day on Parliament Hill, the industry urged the government to expand its scope and funding of the Canada Music Fund, calling for at least $35 million in annual support. Not only does the industry rely heavily on government financial support, it also looks to government to intervene in the marketplace by establishing new rules that provide protection against upstarts that threaten longstanding business models. Many in the industry have admitted that the major music labels were slow to respond to the Internet and its customers' demand for digital distribution of music. While the industry demonizes file sharing services such as Kazaa and BitTorrent, it fails to acknowledge that most of its problems have resulted from changes at the retail level, pricing pressures, and competition from entertainment alternatives. Viewed in that light, the emergence of the file sharing services was in reality a product of the industry failing to meet marketplace demand, rather than a function of users searching for free music (which is actually not free but compensated through a private copying levy system).
The remarkable growth of fee-based music services such as Apple iTunes bears this out. With a viable competitor to the peer-to-peer systems now on the market, Apple estimates that it will sell more than half a billion songs worldwide in 2005 or more than 4,000 songs during the five minutes it takes to read this column. Rather than changing its business practices to meet this market demand, however, the industry instinctively looks to government for legislative intervention. Just last month CRIA issued a release noting that sales had risen in Canada for the first time in six years. Instead of focusing on new performers, a better economy, reduced pricing, and improved marketing, it continued to focus on government intervention, commenting that "we should not be fooled that the worst is necessarily over." As Canada heads toward yet another round of copyright reform — there has been more copyright reform in the past 18 years in Canada than in the previous 120 years — policymakers and politicians should be mindful that they have already used legislative intervention to establish many rights and protections that have tilted the copyright balance heavily toward creators at the expense of users. With the music market showing signs of recovery, government ought to take the industry at its word and stay on the sidelines.
