The False Link Between C-11's Digital Lock Rules and Video Game Industry Jobs
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Wednesday December 14, 2011
The task of defending the bill has lately fallen to Paul Calandra, the Parliamentary Secretary for Canadian Heritage. As I posted last month, Calandra has focused on the claim that there is no jurisdiction "where digital locks have been used and the actual availability of content has been reduced." The argument is a complete red herring as no one has argued C-11 will reduce the availability of content but rather that it will eliminate many of the rights consumers obtain when they purchase that content.
Calandra has now also turned to the video game industry as a major source of support. Given the fact that writers, performers, publishers, musicians, documentary film makers, and artists have all called for greater balance on digital locks, the government has been left with fewer and fewer creative industries that support its position. On Monday, Calandra repeatedly referenced the video game industry and the prospect of lost jobs as a reason to support restrictive digital lock rules. For example:
I wonder if the member and her party opposite are talking about putting an end to the video gaming industry in this country with weak TPM measures.
Later, Calandara asked an MP:
Could he explain to the House how, in the absence of effective technical protection measures, that industry could continue to flourish in the province of Quebec?
Calandra regularly referenced the 14,000 jobs in the industry and suggested that they would be put at risk with "weak" TPM measures. Given the focus, it is important to examine the evidence that supports claims that jobs are at risk.
Assuming the ESAC wants the rules for more than just preventing cheating at games, its own evidence demonstrates why so-called "weak" TPMs (more correctly described as balanced, WIPO compliant TPMs) do not put the industry at risk. In 2007, it released a report called Entertainment Software: The Industry in Canada, which estimated that there were approximately 9,000 video game jobs in Canada. Four years later, the industry has grown to 16,000 jobs, yet Canada has had no digital lock legislation during that period. In other words, without any changes to Canadian copyright law, the industry has emerged as a major success story. Yet Calandra implausibly argues that adding legal protection for digital locks that comply with international treaties and that are consistent with countries like New Zealand (whose video game industry grew by 46 percent last year with those "weak" TPMs) will somehow put the Canadian industry out of business.
Not only is the claim unsupported by years of experience, but when the industry was recently asked about perceived risks, copyright concerns fell well down on the list. Earlier this year, the ESAC commissioned a study by SECOR Consulting that surveyed the industry and asked for the top three risks faced by the Canadian video game industry over the next two to five years. Their responses, in order of priority:
The reference to copyright as a concern was so low - barely above concerns about an economic recession - that SECOR did not discuss it further. Instead, it focused on the real risks to the video game industry, namely competitive issues, the need for talent (many in the industry recognize that focusing on education may be more important than copyright), and government support.
The latter issue is particularly noteworthy since the video game industry is heavily subsidized by tax credits, so that Canadians already effectively spend hundreds of millions of dollars to support these 14,000 jobs. When Calandra asks about the future of the video game industry in Quebec, MPs might note that taxpayers in the province have spent nearly half a billion dollars in subsidies, covering up to 37.5% of labour costs. This is estimated as a taxpayer contribution of $11,428 per employee. Quebec is not alone - the B.C. Interactive Digital Media Tax Credit covers 17.5% of qualified labour expenditures, to a maximum of 60% of production costs and Ontario has provided hundreds of millions in breaks to the industry as well. The irony of directing hundreds of millions of dollars that could be allocated toward education or health care toward an industry that then becomes one of the largest lobbyists opposing education and consumer interests on the copyright file should not be lost on anyone.
The video game industry has been a Canadian success story and copyright is certainly an issue for some companies within it (though not all - others, such as Ancaster, Ontario-based Battlegoat Studios, oppose the ESAC position). But the government's claim that adding balanced digital lock rules to Canadian copyright law would destroy the industry is plainly false and completely unsupported by recent experience and studies commissioned by the ESAC. Based on the industry's own data, opinion surveys of Canadian video game makers, industry growth in other countries with balanced digital lock rules, and the massive taxpayer investment in the industry, there is little reason to believe that amending the Bill C-11 digital lock approach would harm the Canadian video game industry.
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Wednesday December 14, 2011
We want to enhance competition and investment in this country, and this is why we adopted this policy back in 2008 for the AWS spectrum. Let me say that the price went down by an average of 11% since then, and we will continue this way with the 700 megahertz spectrum. We launched consultation with the industry to make sure that we enhance competition and provide better choice and better rates for our consumers.
Last week I wrote about the National Post seeking $150 licences for posting short excerpts online. It appears that the paper has now dropped the system.Mar.12/13Comments (1)