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Less Than 1%: Canadian Publisher Data Points to Tiny Impact of Access Copyright Royalty Decline

Last week, the Association of Canadian Publishers appeared before the Standing Committee on Industry, Science and Technology as part of the copyright review. The ACP, which commissioned a study last year that pointed to digital trends in publishing in Canada that did not identify copyright as key a concern, has been a prominent voice on the impact of declining revenues from Access Copyright licence. Yet as David Lametti, the Parliamentary Secretary for the Minister of Innovation, Science and Economic Development noted during questioning, data submitted by two ACP members to the committee suggest that the Access Copyright royalties have had little impact on overall publisher revenues.

Lametti asked the ACP the following:

We get submissions from various people as part of the committee, and we have submissions from two small Canadian publishers. Broadview Press claim in their submission to us that their annual revenue is $3.5 million, that the drop in access copyright revenue for them is $30,000. That’s a drop of less than 1%. House of Anansi in their submission to us say their annual revenue is $7 million with a loss of about $15,000 to $17,000 in access copyright money in the education sector. Again, that’s a loss less than 1%, actually a quarter of 1%. That seems to be a very different picture for small Canadian publishers in terms of their loss from access copyright revenues than we’re being told. That’s in their very own submissions to us.

The ACP did not respond to the issue, focusing instead on Broadview Press focusing on the U.S. market (the organization might have also noted that Broadview Press uses much of its submission to oppose an extension in the term of copyright). Yet even the small impact on overall publisher revenues does not tell the whole story. Consider the impact of the small drop in overall revenues attributable to Access Copyright in comparison to the amount of support from public sources for these two publishers. Over the past four years, Broadview Press alone has received $350,000 in support from the OMDC Book Fund plus an additional $20,000 from the OMDC export fund. The annual variances in Ontario public taxpayer support are larger than the Access Copyright decline and the total public support from the province alone is many times larger than the revenues from the one licence. The story is similar for House of Anansi, which has received $450,000 in support from the OMDC Book Fund and $54,000 from the export fund. In fact, House of Anansi has long generated nearly as much from just the export fund as it gets from Access Copyright.

The Ontario government is only part of the public support story for these publishers and dozens like them. The federal government also supports these publishers through the Canada Book Fund. The most recently posted recipient data – from 2014-15 – shows Broadview Press receiving $262,115 in federal taxpayer-funded support and House of Anansi receiving $296,494 in support. In all, these publishers have received millions on taxpayer support, undermining claims that the small drop in Access Copyright-related revenues has created an “unsustainable” situation.

The tiny impact on overall revenues from the decline of the Access Copyright licence is consistent with Statistics Canada data that shows the Canadian publishing market largely unaffected by fair dealing given the other changes taking place in the market. The data released in late March shows that Canadian publisher operating profit margin has increased since the copyright reforms in 2012 as it stood at 9.4% in 2012, 9.6% in 2014, and 10.2% in 2016.

As for the education publishing market, the Statscan data shows sales increasing for educational titles from Canadian publishers: up from $376.6 million in 2014 to $395.1 million in 2016. The data shows similar increases for children’s books from Canadian publishers. Interestingly, there is a parallel decline for educational sales as agents, suggesting that the educational market overall has seen little change other than a shift toward Canadian titles. The success of Canadian authors is mirrored by the Statscan data on nationality of sales with Canadian authors seeing a significant increase in sales in Canada, whereas foreign authors have experienced a slight decline. With respect to new titles published, there is a slight decline among Canadian authors of about 6%, but the rate of decline is far higher – nearly 13% – for foreign authors.

Canadian publishers have tried to convince MPs on the committee that the starting point for review of the Copyright Act should be that fair dealing has harmed their industry. But the real starting point should be their own data and official data from Statscan, which points to an industry that has not experienced significant negative effects from fair dealing. In fact, as Parliamentary Secretary David Lametti rightly noted, the data submitted from Canadian publishers directly to the committee highlights how a single licence from Access Copyright barely moves the dial given overall Canadian publisher revenues.

11 Comments

  1. And how about the individual content creators, Dr Geist? How have their revenues been affected by the drop in Access Copyright payments? What are their alternative sources of revenue?

  2. Don LePan, CEO and Company Founder, Broadview Press says:

    Evidently Michael Geist would like what writers and publishers produce to be free–and clearly he’d like to suggest that $30,000 is no big deal for a company such as Broadview Press, which declares a profit of $100,000-$200,000 most years on annual sales that typically amount to just over $3 million. Professor Geist does make a big deal out of Broadview receiving over $300,000 annually in government grants, to support a publishing program that each year–as any academic in English Studies will tell you–includes alongside its profitable titles a range of culturally valuable but uneconomic publications.

    Yes, that is indeed a lot of government support–and we are very grateful for it! But let’s look a little further at what taxpayers are supporting with those dollars. To start with, Geist and others might be interested to know more about Broadview’s wage and salary structure. The highest paid of the company’s 28 employees makes less than 3 times what the lowest paid employee makes, and no one makes more than $85,00 annually. Working at those levels of remuneration, we typically publish between 35 and 45 books every year–almost all of which are widely welcomed as being culturally and/or pedagogically valuable.

    I was curious as to what professor Geist himself might pull in, so I googled him just now. I see that we taxpayers paid Geist himself $209,477 in 2017 (see the Ontario Sunshine list: http://www.ontariosunshinelist.com/people/tmrqcx).

    One person, $209,477. Hmm.

    Given the degree to which Professor Geist seems to feel Broadview is benefiting from government largesse, it seems to me that the $209,477 we are paying him annually is a number that deserves to be more widely known. Not everything should be free, apparently.

    And the annual income of those who try to make a living by writing (and whose incomes Geist would evidently like to see reduced further through his so-called “fair dealing”)? Surveys have suggested that the average is well under $20,000 annually–in other words, less than a tenth of what Professor Geist hauls in.

    On one thing Professor Geist and I do agree–that the length of copyright restrictions in most countries is far too long. Canada has for many years been under pressure in trade negotiations to increase the duration of copyright to more than the current 50 years after the death of the author. If anything, I’d say it should be shortened to 30 or 40 years after an author dies; usually an author’s children are also dead by that time. Certainly there is no justification for lengthening the period beyond 50 years. I hope Professor Geist and I can meet on that piece of common ground!

    • In addition, Mr Geist rakes in gobs of money as a consultant, and google will turn up people arguing that some of this consultancy poses ethical problems.

      Not to mention the benefits that come with the salary of a tenured professor which writers and no doubt publishing employees don’t have (sabbaticals, 26-week work years, juicy pensions).

      With respect to Mr Geist’s position on fair dealing in the classroom, he has yet to answer a few basic ethical and practical questions. Here are two such:

      – if a writer’s work is good enough for a professor to be paid (handsomely) each time to teach it, why isn’t it good enough for the writer and publisher to earn a few pennies each time it’s taught?

      – why, of all the billions spent on education – salaries, physical plant, research, libraries – is it necessary to cut payments to writers and publishers for content, the very stuff of an education? Pennies a page for a course pack is the biggest bargain in a university education. If you consider the combined amount of tuition and government subsidy (some 80 or 90% of the cost of each university degree – and that’s just in the humanities), course pack payments to writers and publishers represent, in my rough calculation, about 0.003% of the cost of that education. And yet Geist and others are on some sort of holy crusade to eliminate it.

  3. As the only member of the Parliamentary Press Gallery in the committee room, I noted the smooth influence of Professor Geist on his friend David Lametti, Parliamentary Secretary to the Industry Minister. Lametti was tasked to deliver the same selective “facts” as the professor had prepared for his article. Did they meet in advance or just prep over the phone? Do other members of the committee know? Let’s make sure they do.

    • Interesting. Geist also approvingly quotes Minister Navdeep Bains who is, in the grand tradition of industry ministers, a small-c conservative Liberal rather than a progressive Liberal (but it’s interesting to note that copyright is the only issue on which a small-c conservative will side with the libertarian anti-copyrighters and not with those trying to control the use of their property – is he quite so free and easy with corporate patents?)

      Bains, Geist reports, has opined that copyright holders can resort to the courts when their work appears on pirate sites, meaning that there is no need for site-blocking powers for the CRTC, but he appears not to know what civil litigation costs, or he would not blithely make such a suggestion. He also does not seem to know what it takes to identify (and serve court papers on) pirates in distant lands, or what it takes to execute civil court judgments against them. In short, useless, the way critics of the mainstream media, before the Internet came along, were always told to start their own newspaper if they weren’t happy with the ethics of the news media.

    • It appears, browsing past news reports and public statements and events online, that Lametti and Geist go back a long ways and are in perfect sync on most issues. So Geist has a direct pipeline for his ideas into the minister’s office. In another minister’s office, flaky Mélanie Joly has often declared that she is a child of the Internet, and that you should be able to just click and get what you want (and these are the people who refuse to subject Netflix even to the consumer tax that applies to all other goods and services consumed in Canada – including those that come across the border). Copyright reform is doomed in favour of the right-wing libertarians like Geist and his ilk.

  4. As a critic of mainstream media, I took this advice and started my own digital newspaper that focusses on government accountability. http://www.blacklocks.ca. We have been 4 years in litigation with 13 federal departments that shared passwords (TPM) and distributed content with thousands of public service readers without license or payment. Facts are proven through Access to Information and not in dispute. The government is arguing against its own law in saying the distribution is “fair use”. Redacted or withheld emails indicate Justice Canada was counselled by members of the CIPPIC and other anti-copyright activists interested in labelling journalists as “trolls”, a novel defence under Canadian law. Some of these apparent ATI breaches are under adjudication by the Ontario Privacy & Info Commissioner. Other improper redactions are under review by the federal OIC. As for Minister Bains, I wouldn’t worry too much if I were you. The industry will explain it to him. Follow us on twitter @hollyanndoan or @mindingottawa

  5. Bob Morris says:

    A 1% decline in revenue translates to between 10% and 20% less in profit for most small publishing companies.

  6. Bob Morris says:

    Professor Geist’s salary really isn’t the issue, and as I recall he held the same views when he earned a lot less. The issue is that a tenured academic is paid in part to write. Not all authors of educational content are, and even those also on generous salaries often write to make extra. Publishers always publish to make money – they have to. And while one day there may be a new model for generating all of the materials needed in schools and universities – a model that doesn’t involve copying without permission or payment what others have produced commercially – we aren’t there yet. Which means that absent paying for content consumed, it won’t be available.

    • Basically, the issue boils down to this: Access Copyright accounts for about 2 one-thousands, at the very very most, of a university education. Having access to virtually every anything published anywhere anytime for pennies a page is the biggest bargain and most flexible source of content in the Canadian university system.

      Geist can’t be opposed on its own merits to paying this kind of money for quality content like that. There must be something else to this bizarre vendetta by Geist and his followers. And there is. They want to eliminate copyright entirely. This is the first step.

  7. Pingback: Canadian Publisher on the Term of Copyright: Life Plus 50 Years is "Already Too Long" - Michael Geist

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