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Cultural Policy

Bookseller Restrictions About Competition, Not Culture

Wednesday March 17, 2010
Eight years ago, the federal government faced a hot-button cultural policy issue as online retail giant Amazon.com, which was already selling millions of dollars of books to Canadians from its U.S.-based site, sought entry into the Canadian market.  Canadian investment regulations posed a significant barrier, however, since the law required government approval for foreign investment in the book publishing and distribution sectors.

My weekly technology law column (Toronto Star version, homepage version) notes that Amazon was ultimately granted a form of non-entry entry.  The company established Amazon.ca, but did not set up shop in Canada.  Instead, it outsourced distribution to Canada Post, enabling the government to rule that the company’s plans fell outside the book distribution restrictions.


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Debating Amazon and Canadian Culture Laws

Wednesday March 17, 2010
Yesterday I appeared on CBC Radio's Q to debate the issue of Amazon and its plan to establish a distribution centre in Canada.  A podcast of the debate is now online (first segment).
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Bookseller Restrictions About Competition, Not Culture

Tuesday March 16, 2010
Appeared in the Toronto Star on March 15, 2010 as bookstalls Rules About Competition, Not Culture

Eight years ago, the federal government faced a hot-button cultural policy issue as online retail giant Amazon.com, which was already selling millions of dollars of books to Canadians from its U.S.-based site, sought entry into the Canadian market.  Canadian investment regulations posed a significant barrier, however, since the law required government approval for foreign investment in the book publishing and distribution sectors.

Amazon was ultimately granted a form of non-entry entry.  The company established Amazon.ca, but did not set up shop in Canada.  Instead, it outsourced distribution to Canada Post, enabling the government to rule that the company’s plans fell outside the book distribution restrictions.

Amazon.ca is now well-entrenched in the Canadian e-commerce landscape and seeks to create its own Canadian distribution channel.  The plan requires government approval, which recently led to predictable outcries from the Canadian Booksellers Association.  The CBA wrote to Canadian Heritage Minister James Moore - who must decide the issue - to urge him to reject Amazon’s application.  

It argued that Amazon’s entry would "detrimentally affect independent businesses and would raise serious concerns over the protection of our cultural industries. Individual Canadian booksellers have traditionally played a key role in ensuring the promotion of Canadian authors and Canadian culture. These are values that no American dot.com retailer could ever purport to understand or promote."

The CBA’s attempt to cloak the issue as a matter of Canadian culture is unsurprising, but Moore should recognize this for what it is - a transparent attempt to hamstring a tough competitor that ultimately hurts the Canadian culture sector.

Evidence of the benefits of major retailers to Canadian culture comes directly from a 2007 Turner-Riggs report commissioned by Canadian Heritage on the Canadian book retail sector.  It pointed to a Quill & Quire study that found that consumers were far more likely to find Canadian titles in the large chains than in smaller independent stores.  

Moreover, a second study of sales from eleven small Canadian literary presses found that online sellers represented the largest source of sales growth, while both chain and independent booksellers experienced relatively static sales.

Neither of these findings should come as much of a surprise.  The scarcity of space in brick and mortar bookstores has long been a key concern for Canadian authors and publishers, who fear that their titles might get squeezed off the shelves.  

Big chain retailers alleviated those concerns to some degree by offering up far more space for titles of all origins (though at a cost of greater reliance on those chains and a weaker bargaining position on commercial terms). Online sellers such as Amazon removed the scarcity concerns altogether, since the number of books the company can offer is unlimited.  

That undoubtedly means more competition, yet it also ensures that fears consumers will be unable to access Canadian titles have disappeared.  Indeed, the report concludes "the visibility of Canadian titles - and Canadians' access to them - in online book retail rose significantly with the launch of Amazon.ca and its considerable selection of Canadian- sourced inventory."

In 2000, the Standing Committee on Canadian Heritage conducted hearings on the Canadian book market.  The resulting report - The Challenge of Change: A Consideration of the Canadian Book Industry - recommended that the government "ensure that no foreign investor is allowed to take over a Canadian firm in the book industry unless credible assurances are made that the investment will increase the availability of Canadian-authored books."

The experience of the past decade has demonstrated that greater retail competition does increase the availability of Canadian books. While the book industry may still require support to bring Canadian books to market, restrictions on who may sell or distribute those books represent a harmful barrier from a bygone era.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.


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Canadian Bookseller Association Opposes New Amazon Distribution Network

Tuesday March 09, 2010
The Globe and Mail reports that the Canadian Bookseller Association is urging the government to block Amazon.com from building a distribution network in Canada.
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British Library To Offer 65,000 Free E-book Downloads

Monday February 08, 2010
The British Library plans to make more than 65,000 19th century works of fiction available as free downloads for the public this spring.
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CBC.ca and iCopyright

Monday February 01, 2010
There is lots of coverage of the CBC.ca's use of the iCopyright system.  I reference it in this week's column as an example of what a publicly funded institution should not be doing.  The most comprehensive coverage comes from Cameron McMaster at the Canadian Media Policy Portal here and here.
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NFB Unreels Online Smash Hits

Monday February 01, 2010
In recent years, Canadians have become increasingly accustomed to hearing about Internet success stories elsewhere with fewer examples of homegrown initiatives. However, as my weekly technology law column (Toronto Star version, homepage version) discusses, an unlikely Canadian online video success has emerged recently that has not received its due - the National Film Board of Canada’s Screening Room


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National Film Board Unreels Online Smash Hits

Monday February 01, 2010
Appeared in the Toronto Star on February 1, 2010 as National Film Board unreels online smash hits

In recent years, Canadians have become increasingly accustomed to hearing about Internet success stories elsewhere with fewer examples of homegrown initiatives. However, an unlikely Canadian online video success has emerged recently that has not received its due - the National Film Board of Canada’s Screening Room. 

The NFB may never replace YouTube in the minds of most when it comes to Internet video, but a series of innovations have highlighted the benefits of an open distribution model and the potential for Canadian content to reach a global audience online.

Last year, just months before the NFB celebrated its 70th anniversary, it launched the NFB Screening Room, an online portal designed to make its films more readily accessible to Canadians and interested viewers around the world.  To meet its objective, it committed to be as open, transparent, and accessible as possible, including making the films freely available and embeddable on third party websites.

In January 2009, the site started with 500 films.  Today, the number of available films has nearly tripled, with almost 1,500 films, clips, and trailers.  The growing selection has been accompanied by a massive increase in audience. There have been 3.7 million online film views over the past year - 2.2 million from Canada and 1.5 million from the rest of the world.  That number is set to continue to grow as daily views have jumped from 3,000 per day in January 2009 to more than 20,000 film views per day in January 2010.

The site also uses mobile technology to increase public access and exposure to Canadian films.  In October 2009, the NFB launched an iPhone application that has been downloaded more than 170,000 times and led to more than 500,000 film views on the ubiquitous mobile device.

Interestingly, the NFB reports the most popular viewing time is in the evening hours, suggesting that watching a film online is an effective substitute for conventional television programming.   

The NFB also rolled out new participative initiatives.  For example, it launched an "open content" project called GDP, an interactive one-year effort to document the economic crisis. The NFB invited Canadians to submit their own videos discussing the effects of the economic downturn, leading to more than 25 videos along with hundreds of photos and text comments.

The NFB success story is noteworthy for two reasons beyond the impressive statistics.  First, the project is instructive from a public policy perspective.  As the NFB’s content manager recently noted, the Screening Room “puts the films back in front of the people who paid for them in the first place - Canadian taxpayers.” 

That philosophy ought to be emulated by other publicly funded cultural bodies. For example, CBC.ca recently began promoting an online licensing system that charges sites as much as $250 per month to embed a single article on a website.  While the desire for additional revenue is understandable, the goal for a publicly funded body surely must be to make public access the priority, rather than to garner small incremental revenues.

Second, the NFB has demonstrated the potential of the Internet and new media to attract new audiences for Canadian content.  The old regulatory models premised on scarcity that led to Canadian content requirements are disappearing quickly, replaced by a world of abundance in which artificial barriers do little to keep content out. 

As the NFB recognized, remaining relevant in that world requires ensuring your work is accessible as possible. While there are unquestionably risks, there are tremendous potential benefits for Canadian creators and the export of Canadian culture.


Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.


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National Library of the Netherlands Plans to Digitize Everything

Wednesday January 13, 2010
The National Library of the Netherlands has unveiled a strategic plan that includes creating a new national digital infrastructure with access to everything published in and about the Netherlands.
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Consumer Choice The Key To Solving Fee-For-Carriage Fight

Monday November 02, 2009
Appeared in the Toronto Star on November 2, 2009 as Consumer Choice Key To Ending This Fight

For the past two months, Canadians have been subjected to a non-stop marketing campaign pitting two deep-pocketed industries - broadcasters and broadcast distributors - against each other.  Television and radio commercials, full-page newspaper advertisements, websites and Twitter posts all seek to convince the public that new fees for local television signals are, depending on your perspective, either a TV tax or crucial funding to save local television.

Broadcasters claim some local TV stations will close if they do not receive millions in additional fees from cable and satellite companies as compensation for distributing their signal.  Cable and satellite companies leave little doubt they will pass along any new fees - possibly as much as $10 per month per subscriber - to their customers. The additional fees inevitably will not come from the bottom lines of cable and satellite companies, but rather from the pockets of consumers.

While the reaction for many Canadians might be sensibly to tune out the entire mess (today is the deadline for comments), politicians and regulators will still be left seeking a solution. In fact, some politicians have pledged to support local television, but also promised to avoid new consumer costs.  Can these two positions be reconciled?

Perhaps.

The answer may lie in giving consumers more choice, by allowing them to pay only for the channels they want - regardless of whether they are local, foreign, or specialty (such as CNN or movie networks).  

A full "a la carte" model would require three steps. First, exclude public broadcasters from the issue altogether. The CBC argues it is also entitled to fee-for-carriage compensation, yet that runs counter to the very notion of a public broadcaster.  The public has already paid for the broadcasts and should not be asked to pay again.  Public broadcasters should instead form a new basic tier for cable and satellite providers that would be considerably cheaper since it would only include channels for which no fees are attached.

Second, make all remaining channels - local, foreign, and specialty - optional for consumers.  Groups of channels can still be packaged to offer better value (sports, movie, local channel, or U.S. channel packages), but the crucial difference from the current system would be that Canadian consumers would get to decide what channels they want to pay for.

Third, institute a fee-for-carriage system so private broadcasters are compensated for their local signals where consumers choose to subscribe.  If Canadians are really concerned with their local television, they will subscribe and the broadcasters will be the beneficiaries. If the Canadian broadcasters are wrong, however, they lose both compensation and mandatory carriage.

Such a system should meet everyone's needs. Politicians succeed in getting local television stations fees for their signal without forcing consumers who don’t want the channels to pay for them.  Consumers gain much-needed control over their cable bills so that they are not forced to pay new fees for signals they don’t want.  Broadcasters get their long sought-after fee-for-carriage model.  

Moreover, this approach fosters incentives for broadcasters to invest in local news and original programming because strategies based on simply licensing popular U.S. content will become less effective as consumers anxious to view those programs subscribe to the U.S. channels rather than the Canadian simulcast.

Adopting a genuine choice model would undoubtedly represent a dramatic shift in Canadian broadcast policy that has long featured must-carry obligations for Canadian broadcasters.  Yet it is the broadcasters themselves that argue for a new paradigm.  A system that matches fee-for-carriage with consumer choice may best reflect the needs of a television universe scarcely imagined when the Broadcasting Act was first drafted.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.


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