Michael Geist

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Corporations Turn to P2P

The WSJ reports that companies such as GM, Coca-Cola Co. and videogame publisher Tulga Games Inc. are now using peer-to-peer technology to transmit large chunks of data like video files or software updates, to employees and customers. Instead of a costly expansion of its satellite network last year, GM turned […]

February 13, 2007 — Comments are Disabled — News

CPCC Goes For Broke, Part Two

While the substantive shortcomings of the latest attempt to add a levy to the Apple iPod and SD cards are important (not to mention legal questions of res judicata and political questions surrounding the Conservatives policy commitment to eliminate the levy), there is a bigger story at work. Ten years ago, the music industry's vision of what the market would look like today focused on two things – DRM and the private copying levy. DRM formed the key provisions in the WIPO Internet Treaties that were concluded in 1996, while CRIA celebrated the culmination of a 15 year lobbying effort to create a levy on blank media in 1997.

Fast forward to 2007 and it is clear that the industry got it completely wrong. DRM faces a consumer and regulatory backlash, with a growing number of leading digital music vendors – Yahoo, Real, and Apple – all calling on the industry to drop the restrictions. They are joined by independent labels who are successfully promoting their music through eMusic, the number two online music seller, and by the artists themselves. With the rumours of EMI dropping DRM, it looks like it is only a matter of time before the DRM-focused strategy is abandoned.

The private copying levy has gone through similar challenges. The levy has succeeded in generating an enormous amount of income (over $150 million), yet some believe it has become a roadblock to WIPO ratification (national treatment concerns associated with the levy), it is far more market distorting that its advocates anticipated, and much to CRIA's dismay, it has provided peer-to-peer file sharers with a legitimate argument that downloading for personal, non-commercial purposes is lawful in Canada.

At the same time, the emerging view worldwide is that some of the copying it compensates – device shifting from CDs to iPods – should not be compensated. For example:

February 12, 2007 — 6 comments — News

Yet Another Camcorder Claim

The Globe and Mail runs an interview with Ellis Jacob, the CEO of Cineplex Entertainment. He discusses camcording and in the process changes the claim yet again – after the industry claimed that 50 and 40 percent of camcorded films can be traced to Canada (while telling the U.S. government […]

February 12, 2007 — 7 comments — News

CPCC Goes For Broke, Part One

A remarkable week in music that started with the Steve Jobs call to drop DRM, followed by speculation that EMI will drop DRM, concluded with another critically important development – the Canadian Private Copying Collective, which administers the private copying levy, has asked the Copyright Board to increase the levy on blank CDs and add levies to electronic media cards (storage media) such as SD cards as well as digital audio players such as the Apple iPod. There is much to consider here, which I will divide between the specific issues raised by the tariff application and the bigger story that is at work.

On the specific tariff application, I think the CPCC is going to have a tough time convincing the Copyright Board (and almost certainly the federal court) that the levy increases and extensions to other media are warranted. The blank CD increase represents an astonishing request as the CPCC is now openly asking that more than half of the retail price of blank CDs to be comprised of levy costs. A backgrounder on the CPCC notes that blank CDs cost about 50 cents and that the levy currently comprises 21 cents of that cost. That is an enormous cost – 42 percent – and the collective wants to increase that by an additional 28 percent. This is a staggering market distortion that will obviously face very stiff opposition.

The proposal to extend the levy to storage media and Apple iPods also face an uphill climb. The storage media usage data simply does not come close to supporting a levy. The CPCC's FAQ says that its surveys suggest that 25 percent of content copied onto these cards is music and that 20 percent of people say that the last time they copied onto an electronic memory card, the content was music. Put another way, 75 percent of content copied onto these cards is not music and 80 percent of people say that the content they last copied onto these cards was not music. These results are obvious to anyone who owns a digital camera, but apparently not to the CPCC. While the Copyright Board's definition of ordinary use opens the door to considering storage media, this represents bad, market-distorting policy that (if approved) would force the 80 percent of non-music copiers to subsidize the 20 percent of music copiers.

The attempt to extend the levy to Apple iPods is similarly flawed.

February 11, 2007 — 14 comments — News

The Future of the Canadian Music Industry

Canadian Heritage has just released a new report [PDF version] on the future of the Canadian music industry that should be required reading for those engaged in music and copyright issues. Written by Shelley Stein-Sacks, the former head of the government's Music Entrepreneurship Program, the report is remarkable for several […]

February 9, 2007 — 13 comments — News