Fair Dealing by Giulia Forsythe (CC BY-NC-SA 2.0) https://flic.kr/p/dRkXwP
The Battle Over Tariff 8, Part 2: The Recording Industry’s Surprising Opposition to Songwriter, Composer and Music Publisher Streaming Royalties
Yesterday I posted on the battle over Tariff 8, the Copyright Board of Canada’s new tariff for digital music streaming services that the media has suggested could open the door to popular foreign services migrating to Canada. Despite the initial excitement, the Canadian recording industry, led by Music Canada (formerly the Canadian Recording Industry Association) has taken aim at the decision, which its President Graham Henderson argues:
will further imperil artists’ livelihoods, and threatens to rob them of the fruits of their labour in the new digital marketplace. And it will further undermine the business environment, undercutting the ability of labels and other music companies to make future investments in Canadian talent.
As noted in the post, Re:Sound, the collective responsible for the tariff, has filed for judicial review of the decision and Music Canada is urging its supporters to “like” its Facebook protest page, which it says will help win the fight.
There are two things that make the campaign against the decision particularly striking: the industry’s failure to mention to that Tariff 8 is only one of several payments made for music streaming and its opposition to those other payments.
The Battle Over Tariff 8: What the Recording Industry Isn’t Saying About Canada’s Internet Streaming Royalties
Over the past month, Music Canada, the lead lobby group for the Canadian recording industry, has launched a social media campaign criticizing a recent Copyright Board of Canada decision that set some of the fees for Internet music streaming companies such as Pandora. The long-overdue decision seemingly paves the way for new online music services to enter the Canadian market, yet the industry is furious about rates it claims are among the worst in the world.
The Federal Court of Appeal will review the decision, but the industry has managed to get many musicians and music labels worked up over rates it labels 10 percent of nothing. While the Copyright Board has more than its fair share of faults, a closer examination of the Internet music streaming decision suggests that this is not one of them.
The Music Canada claim, which is supported by Re:Sound (the copyright collective that was seeking a tariff or fee for music streaming), is that the Canadian rates are only 10 percent of the equivalent rate in the United States. That has led to suggestions that decision devalues music and imperils artists’ livelihood.
Several years ago, the United Kingdom passed the controversial Digital Economy Act, which included provisions for disconnecting Internet users accused of repeat copyright infringement. That bill generated protests, but ultimately passed. The disconnection provisions never took effect, however, as they were the target of legal challenges. Now reports indicate that the copyright enforcement scheme has been shelved altogether as rights holders and Internet service providers have reached agreement on a voluntary system that looks a lot like Canada’s notice-and-notice approach.
The system involves a maximum of four warning letters to a customer per year. There is no disclosure of the subscriber information and no threat of loss of Internet service. Rights holders can take further legal action if they so choose. I wrote about Canada’s notice-and-notice system here (which similarly involves notices, no disclosure of personal information, and no loss of service), discussing its effectiveness and warning against the possibility that the Trans Pacific Partnership could be used to override the “made in Canada” approach.
Last week, negotiators from around the world gathered in Ottawa for negotiations on the Trans Pacific Partnership agreement. I was fortunate to be asked to meet with many of the intellectual property negotiators as part of a side session sponsored by the Electronic Frontier Foundation on the copyright implications of the agreement. EFF’s Jeremy Malcolm and Maira Sutton write about the event here, which also included Howard Knopf and Open Media’s Reilly Yeo.
My presentation, embedded below, focused on the Canadian notice-and-notice rules for Internet service provider liability. The government recently announced that notice-and-notice will take effect in January 2015. I explained the background of the Canadian approach, how it differs from the U.S. notice-and-takedown system, and how experience demonstrates its effectiveness.
Netflix is enormously popular in Canada with millions using the online video service. While the Canadian version of Netflix has improved the scope of available titles since it launched, there are still differences with the U.S. service, leading some subscribers to use virtual private networks to mask their address and access U.S. Netflix. Are those subscribers “stealing” something? The Globe and Mail’s Simon Houpt apparently thinks so.
This weekend he wrote a column titled Even the Content Creators are Stealing Content, which focused on content creators who unapologetically download television shows or use virtual private networks to access U.S. Netflix from Canada. Accessing the U.S. Netflix service is common in many countries including Canada (see stories on Australia, New Zealand, and the U.K.). Houpt argues that accessing the U.S. Netflix from Canada deprives creators of their fair share of earnings and make the creation of future shows less likely:
Paying for the Canadian service means your money goes to whoever holds the Canadian rights for the shows on Netflix. If you’re watching the U.S. service, the rights holders – that is, those who pay the creators to make the shows you’re actually watching – aren’t getting their fair share. That means they’re less likely to help get the next round of shows or movies green-lighted, making it harder for artists to get their projects off the ground.
Yet while the legal issues associated with accessing U.S. Netflix may be in a legal grey zone, the argument that creators are not paid seems wrong.