Like a record baby by Maarten Hornstra (CC BY-NC-SA 2.0) https://flic.kr/p/6VD4Dv

Like a record baby by Maarten Hornstra (CC BY-NC-SA 2.0) https://flic.kr/p/6VD4Dv

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The Great Canadian Copyright Giveaway: Why Copyright Term Extension for Sound Recordings Could Cost Consumers Millions

Randy Bachman, the well-known Canadian musician, found himself embroiled in a public fight with Prime Minister Stephen Harper last year when Harper used his song “Takin’ Care of Business” as a theme song for a major speech. Bachman said he probably would not have granted permission to use the song, since “I don’t think he’s taking care of business for the right people or the right reasons.” Bachman was singing a different tune yesterday as the government released its budget and apparently took care of the right people – record companies. Despite no study, no public demands, and the potential cost to the public of millions of dollars, the government announced that it will extend the term of copyright for sound recordings and performances from 50 to 70 years. For that giveaway, Bachman was quoted as saying “thanks for the term extension PM Harper, you really are taking care of business.”

While the government lined up industry supporters to praise the term extension, the decision is unexpected and unnecessary (it also announced that it will accede to the Marrakesh copyright treaty for the blind, but that should not require significant domestic reforms). The music industry did not raise term extension as a key concern during either the 2012 copyright reform bill or the 2014 Canadian Heritage committee study on the industry. Experience elsewhere suggests that the extension is a windfall for record companies, with little benefit to artists or the public. In fact, many countries that have implemented the extension have been forced to do so through trade or political agreements, while signalling their opposition along the way.

[Update: New post linking the term extension to lobbying from Universal Music over the release of cheaper public domain Beatles records in Canada.]

Canada will extend term without any public discussion or consultation, yet other studies have found that retroactive extension does not lead to increased creation and that the optimal term length should enable performers and record labels to recoup their investment, not extend into near-unlimited terms to the detriment of the public. For Canadian consumers, the extension could cost millions of dollars as works that were scheduled to come into the public domain will now remain locked down for decades.

For example, the 2006 Gowers Report on Intellectual Property, a wide ranging and well respected government-sponsored review in the UK, came out against term extension for sound recordings and performances:

In conclusion, the Review finds the arguments in favour of term extension unconvincing. The evidence suggests that extending the term of protection for sound recordings or performers’ rights prospectively would not increase the incentives to invest, would not increase the number of works created or made available, and would negatively impact upon consumers and industry. Furthermore, by increasing the period of protection, future creators would have to wait an additional length of time to build upon past works to create new products and those wishing to revive protected but forgotten material would be unable to do so for a longer period of time. The CIPIL report indicates that the overall impact of term extension on welfare would be a net loss in present value terms of 7.8 per cent of current revenue, approximately £155 million.

A Dutch study on intellectual property reached the same conclusion, noting that the arguments in favour of extension were unconvincing and that the extension would create significant costs for consumers and society as a whole. It concluded:

To conclude, the arguments made in favour of a term extension are not convincing. Many arguments already fall outside the objectives of related rights protection for phonograms. The fact that some recordings still have economic value as rights therein expire, cannot in itself provide a justification for extending the term of protection. Related rights were designed as incentives to invest, without unduly restricting competition, not as full-fledged property rights aimed at preserving ‘value’ in perpetuity. Other arguments do not convince because a term extension would either be ineffective in addressing the concerns in question, because there are other, better remedies available or advisable, or because the costs of an extension would outweigh its eventual benefits. The term of related rights must reflect a balance between  incentives, market freedom and costs for society. This balance will be upset when terms are extended for the mere reason that content subject to expiration still has market value. The public domain is not merely a graveyard of recordings that have lost all value in the market place. It is also an essential source of inspiration to subsequent creators, innovators and distributors.

With many more studies and reports reaching the same conclusion (see here, here, here, and here) – some estimating that the costs to the public would exceed one billion euros with 72 percent of the benefits going to record labels – the issue unsurprisingly proved very controversial in Europe. The European Union ultimately passed an extension from 50 to 70 years in 2011, but not without significant opposition from member states.  Eight countries – Belgium, Czech Republic, Luxembourg, Netherlands, Romania, Slovakia, Slovenia and Sweden – all voted against, while Austria and Estonia abstained.  Sweden argued that the extension was “neither fair nor balanced”, while Belgium argued that it would mainly benefit record producers and negatively affect access to cultural materials in libraries and archives.

Belgium’s concern regarding the lack of benefit for artists was also reflected in the Gowers report, which noted:

If the purpose of extension is to increase revenue to artists, given the low number of recordings still making money 50 years after release, it seems that a more sensible starting point would be to review the contractual arrangements for the percentages artists receive.

While the European experience on term extension for sound recordings and performances is instructive, there have been Canadian studies that have reached similar conclusions. Industry Canada commissioned University of Montreal economist Abraham Hollander to examine the issue in 2005.  Hollander’s study found that the economic value of a term extension to the recording industry was very small:

[Sound recordings] are protected for a period of 50 years from fixation. Adding 20 years of protection would contribute 2.3% to the present value of royalties under a 7% discount rate, assuming that the flow of royalties remains unchanged during the whole period. Under identical assumptions, extending the protection period to 100 years would contribute a mere 3.0% to the present value. This, however, is true only if the royalty flow remains constant over time. When the annual royalties decline rapidly over time, as is typical, the increase in present value would be considerably smaller.

Not only have the studies come out against term extension, but copyright stakeholders have not publicly emphasized the issue. Term extension for sound recordings and performances was nowhere to be found among the thousands of submissions to the 2010 copyright consultation, it was not discussed in the 2002 Canadian roadmap for copyright reform, and groups like the Canadian Independent Record Production Association and the American Federation of Musicians of the United States and Canada did not raise it in their submissions on copyright reform. The music industry’s form letter did not discuss term extension and it was not an issue that was prominently raised in the 2012 copyright reforms. In fact, just last year the Standing Committee on Canadian Heritage conducted a major review of the music industry in Canada with dozens of witnesses taking the time to appear or submit briefs. The final report and the government’s response never raise the term of protection for sound recordings and performances as a concern.

Why is the government using the budget to enact copyright term extension that primarily benefits foreign record labels, has proven controversial elsewhere, has been largely dismissed by numerous studies (including one funded by the government), was not the subject of a major public campaign from stakeholders, and that could cost Canadians millions of dollars?

My best guess is the Trans Pacific Partnership agreement. The TPP is nearing the end game and the U.S. is still demanding many changes to Canadian copyright law, including copyright term extension for all works (not just sound recordings). The Canadian government’s strategy in recent years has been to enact reforms before the trade agreements are finalized in order to enhance its bargaining position. For example, it moved forward with notice-and-notice rules for Internet providers without the necessary regulations in order to have the system in place and protect it at the TPP talks. It may be trying to do the same here by extending term on sound recordings and hoping that that concession satisfies U.S. copyright demands. Yet the concession comes at a significant price – locked down works and increased costs to consumers -  while providing another reminder that too often Canadian copyright law is effectively written by U.S. lobby groups who do not have Canadian interests in mind.

55 Comments

  1. Pingback: Tories Quietly Slip Tougher Copyright Rule Into Budget - Sean Says So

  2. True I think – but this sort of thing does not worry me overly, as the most creative talents are currently doing an end run around big music, big publishing etc. The music that now appears through record labels seems mostly to be derivative mush, whatever the type. Innovative, creative new music is on YouTube, iTunes and other places. The same for books either print or eBooks which you find now on a number of online platforms. Art is migrating to tumblr and Deviantart. So while this post is written in your usual careful and considered style it has an antique feel to me. Disruption is the term used for this change, I think. Here is an example: https://www.youtube.com/user/DanielaSings

    • Fair points. It is true that more work is being produced & released by going around the established corporate channels.

      One major concern I have is access to old material. It can be difficult to track down older lesser known works. Sometimes it is impossible to obtain legally because a publisher or record label who has the rights has no intention to ever print/press/release the work in any form.

    • Very short-sighted. The avenues of publication you list, youtube and itunes, are corporate entities and thus will immediately give in to any legal demand from any recording company to take something down because it sounds too much like something they “own”. Even in the case of the artist you linked, she probably isn’t allowed to monetize any of the covers she’s put up. Copyright should be drastically shortened, if anything. Nobody creates music from whole cloth, it’s always a derivative work to some extent. The old white men in power need to stop pretending otherwise for their own benefit.

  3. Pingback: Tories Quietly Slip Tougher Copyright Rule Into Budget | TKG News

  4. Wow. Once again, that US government puppet Harper has screwed over Canadians without even a consultation or debate to completely ignore this time. His contempt for Canadians is just astounding.

    So once again I ask all of you that voted this clown into office (again), are you going to make this mistake again this coming fall for a third time?

  5. Information only moves faster and faster with the passage of time. Terms should be coming down, WAY down. 10 years is enough in the 21st century.

    How much do you want to bet that within the next 20 years there will be another extension? What amounts to effectively infinite terms does nothing but increase my now near-total lack of respect for copyrights.

  6. Pingback: 1p – The Great Canadian Copyright Giveaway | blog.offeryour.com

  7. Pingback: Argh. Canada adopting life + 70 years copyright--via the 2015 budget! #shame #tpp #copyright http://www.michaelgeist.ca/2015/04/the-great-canadian-copyright-giveaway-why-copyright-term-extension-for-sound-recordings-could-cost-consumers-millions/

  8. Why?

    Ask yourself what role copyright might have in promoting online surveillance.

    • Copyright is the only “information crime”. So it’s the only excuse for surveillance, other than cyber-terrorism, which hasn’t happened, and may not ever happen if we’d just realize that there’s simply never any need to put our vital infrastructure control systems online. But more to the point here, this gift to media companies comes at a time when Harper needs media companies to give his party good media coverage as a favour in return. The corruption here, and the blindness to it, make me sick.

  9. Don’t make this automatic. Require the rightsholder to file a form with the government and pay $1 (or more). Doing that will let the vast majority of works still fall into the public domain and Disney can keep their mouse.

    • Good suggestion. An opt-in model with a fee might be a more sensible approach. I have little objection for a company like Disney or Marvel being able to retain copyrights on ongoing active properties. Dormant works though should fall into the public domain.

  10. Better yet, make it a sliding scale. Free for 20 years, then 1 dollar for the 21st, doubling every year thereafter.

    Then we’ll find out just what that d*mn mouse is really worth!

  11. Maury Markowitz says:

    I’m an avid Wikipedian who writes mostly about Canadian history. In order to avoid spurious demand letters from IP law firms, the Wiki has had to adopt strict rules about items being in the public domain or explicitly released under some sort of permissive licence.

    Until now, this meant that anything documenting the World War II era or earlier could safely be used without threat. Now an entire section of Canadian history is blanked out, a great comfort to the veterans, I’m sure.

    Let us now start the debate over which is more important to Canadians a whole, that a few aging rockers can take advantage of the new tax breaks in the budget, or that Canadian heritage can be safely documented?

    • There are many (properly curated) websites, and museums, dedicated to Canadian history.
      The history is not lost, the Vets are absolutely not forgotten, “Now an entire section of Canadian history is blanked out” from???
      Anyone who wants, needs, or has an interest in the World War II era and Canadian history need only look for it.

      Canadian heritage is safely documented, to suggest otherwise is ignorant.

    • When we were kids we didn’t have to go looking for history, if we did we would never have known about it because I hated history. Every Saturday morning when I woke up and made my breakfast I would watch the historic battles of the first and second world wars and Vietnam and Korea. I was intreged by watching what our country men did for freedom and if it was not there I would of just watched cartoons instead. The wiki guy is right, you have to put history in front of our children not make them hunt for it. Thanks

      • You don’t look so old that libraries didn’t exist when you were growing up? Or that history wasn’t taught in school.
        I had a history class every year, not you?

        Thankfully my parents didn’t sit me in front of a TV to learn of my history. I was taught by teachers and text books; and of course my parents experiences.

        No one has to “hunt” for a library or museum in Canada, what are you talking about?

  12. It’s a way to conveniently hide history from the younger generations. I grew up watching The War Years and World At War and The Vietnam War and Gwen Dyers documentaries on war and that stuff you hardly see anymore. All they want the younger generations to know about is 911. Who cares about 911, the first and second world war explains everything anyone needs to know about humanity. Thanks

  13. Pingback: The Great Canadian Copyright Giveaway: Why Copyright Term Extension for Sound Recordings Could Cost Consumers Millions | Michael Geist #copyright | infophile

  14. This still requires an amendment to the Copyright Act. Adopting the budget alone does not do this. The short time left to the Harper government may not allow for this to happen. Will the new government also agree to do this?

    • An amendment to the Copyright Act is exactly what the government is planning and they may get it to pass before the election. I found this good summary in a blog by Barry Sookman:

      “The announced amendments to the Copyright Act are the most significant amendments to the Act since the 2012 amendments made in the Copyright Modernization Act. Given that the amendments are likely to be made as part of a budget implementation bill, they will probably be passed by the House of Commons and the Senate and become law before the summer break.”

      The full article is here: http://www.barrysookman.com/2015/04/21/canada-to-accede-to-marrakesh-treaty-and-extend-copyright-term-in-sound-recordings/#sthash.2DDlMvmC.dpuf

      • You and Mr. Sookman have too much faith in the present government’s ability to pass this sort of thing quickly. Passing a budget implementation bill in the remaining two months is theoretically possible, but the realities of the current parliament make this unlikely.

  15. Pingback: Change to copyright law in federal budget ‘a really bad idea’ as critics worry about threat to artistic freedom | National Post

  16. Stephen Harper says:

    “I don’t condone copyright infringement.”

    Wink, wink.

  17. Devil's Advocate says:

    Harper’s just pavin’ the way for the TPP, and selling us out the way he always has.

  18. Pingback: Canada to Extend Copyright Term from 50 to 70 years | Kalogiannides Law

  19. You have NO inalienable right to another persons works! Period!
    Every human given the spark of creativity has the right to determine its destiny and dissemination.
    We should feel blessed when artists make their efforts available to us.
    If someone’s art is going to be used in an economy, they, and their heirs ,deserve to be compensated for it.

    • Devil's Advocate says:

      You forgot the sarc mark on that one.

      • If I were a Resource Class Warrior, maybe. But I strive – as we all should – to be a Creative Class Warrior.

        • I dunno, your level of logic hilroy seems more fitting for a social justice warrior. Or the propaganda of the media conglomerates of the copyright industry.

    • Weak Thought says:

      I agree. I’ll give up my intellectual property rights THE DAY AFTER all you non-creators give up YOUR property rights. I’m likin that 2-story bungaloo across the street….

  20. Pingback: Dice Loaded Against Public in Canada's Copyright Term Extension | americanpeacenik technology journal

  21. Pingback: Dice Loaded Against Public in Canada's Copyright Term Extension | Michigan Standard

  22. orphan works feeding frenzy.
    nescafe BC water, alberta oil, saudi wheat board, ont. power co, copyright extension. (newsline feeds to india, years back)

    Just wait till quebec can’t move it’s lumber quota.

  23. Pingback: Canada Quietly Announces It Will Lengthen Copyright Terms for Sound Recordings by 20 Years With No Public Consultation » infojustice

  24. John Ciccone says:

    How much of this is moot when the composition embodied in the recording will remain copyright protected longer than its recording, even with the extension? Assuming we’re usually talking about records made at roughly the same time as the songs were written (term of copyr in composition = 50 years after death of last surviving composer) and assuming no-one’s yet found a way to extricate the recording and not use the composition.

    And if the recording did go PD first, is anyone really expecting iTunes to cut the cost of that download in half?

    Cheers.

  25. Pingback: Dice Loaded Against Public in Canada's Copyright Term Extension - Re:Create

  26. Pingback: TPP's first victim: Canada extends copyright term from 50 years to 70 years | Reddit Spy

  27. Pingback: Canada Extends Copyright Terms, Finally Giving Musicians Who Released Works More Than 50 Years Ago A Reason To Create | Technology

  28. Pingback: TPP’s first victim: Canada extends copyright term from 50 years to 70 years | My Blog

  29. Pingback: TPP’s first victim: Canada extends copyright term from 50 years to 70 years via /r/technology | moomblr!

  30. Pingback: Canada's copyright term extension for sound recordings taxes public, enriches record labels

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  32. Mr. Geist.

    Here’s an article you should read: http://bit.ly/1DqvbV3

  33. Pingback: Canadian Copyright Term Extension for Sound Recordings – A Clockwork Luka

  34. Pingback: Michael Geist On Canadian Copyright Extension And The Public Domain « Durnmoose Movie Musings

  35. Why was this not even mentioned by the government? All I’ve heard is radio ads promoting how Harper is giving tax breaks to families… Whe don’t want and don’t need longer terms of copyright. 50 years is more than enough, thanks. Harper is a sneaky so-and-so that shows no respect for our shared values. We want more access to information, not less!

  36. Pingback: John Degen Loses Argument Against Straw Man | The Tritonester

  37. Pingback: Major Publishers Using Public Domain to Screw Canadian Songwriters | The Tritonester

  38. I thought that the counter started when the author died. So, why are Bachman and Leonard Cohen complaining? Is it different for music recording?

    • John Ciccone says:

      Yes.

      A “music recording” contains at least 2 main and separate components: (1) the composition; and (2) the recording of that composition.

      Many other types of rights are bundled in there as well. Those are the main ones, if you will.

  39. Pingback: The Great Canadian Copyright Giveaway: Why Copyright Term Extension for Sound Recordings Could Cost Consumers Millions – Michael Geist | newspeak

  40. Pingback: Copyright modernization | Cats for Harper