CRIA’s Higher Risk Strategy

Of all the reactions to today's SCC decision to skip the appeal of the private copying decision, I thought the Canadian Recording Industry Association's was the most remarkable.  I've obviously commented regularly on its high risk strategy of suing individual file sharers.  I think this is a bad strategy for many reasons.  Suing your customers (and we should be clear, file sharers are the industry's best customers) is never a good idea.  Further, the immense energy devoted to fighting file sharing, despite ample evidence that any industry woes have little do with the practice, is wasted time that could be spent actually responding to the market.

Today's response represents an even higher risk strategy.  CRIA is now going to war not only with its customers, but now also with its artists.  There have been several indications of this in the past year, namely CRIA's opposition to artists on ringtone compensation and on satellite radio.

But opposing the artists on private copying takes this strategy to new heights.  CRIA today claimed that artists will make up private copying levy losses through the marketplace.  The truth is that artists and rights holders lost $4 million today, the amount collected from the iPod and digital audio recorders during a fairly brief period.  Longer term, they lost tens of millions of dollars of potential compensation.  These are not the nickels and dimes that CRIA derides.  If anything, for Canadian artists the levy represents a potentially important revenue stream that will not be easily recouped.

Today's decision also likely means the end of a private copying levy that CRIA spent 15 years fighting to get.  The system is clearly broken and policy makers will either drop it completely (perhaps supplemented by a fair use doctrine that will permit copying such as store bought CDs to personal iPods) or expand the levy so that it resembles a European approach that extends to both audio and video, while providing even greater compensation.

Further, today's decision represents a serious blow to the iPod, which has been an incredible boon to the music industry.  Simply put, copying store bought CDs onto iPods, as CRIA's own Graham Henderson has supported, may now be unlawful in Canada since it is difficult to find an exception within the Copyright Act that would permit that form of copying.  While perhaps some in the industry may think this is a good thing as it transitions users to re-purchase the same music yet again as MP3 files from services such as iTunes, I think it will ultimately lower the value that consumers associate with music to the detriment of everyone in the industry.

Finally, it is worth noting what this decision does not mean.  While CRIA claims yet again that this means that file sharing is unlawful in Canada, the issue is still unsettled.  They argue that "unauthorized file sharing to hard drives of any kind, including those on home computers, is illegal."  Not so.  A good argument can be made that computer hard drives are not the equivalent of the hard drives embedded in digital audio players.  I don't think anyone knows for sure and I doubt CRIA will try to test the issue.  There is high risk and higher risk but that lawsuit would involve perhaps the highest risk.


    if puretracks will let me listen to 80% of their catalogue onlineor napster will let me transfer un,imited sumscriptions to a portable (yes I LOVE and KNOW I’m renting music) than I don’t care about P2P or private copying. A little money (less than price of one cd) a month get’s me all the musical bang i need

  2. Timothy Wesson says:

    I find it a little disingenuous to claim that “CRIA is now going to war not only with its customers, but now also with its artists.” since the CRIA represents the music companies, not the artists. The way you’ve phrased it, it appears that the CRIA is an artist’s body. It is not.

  3. Pradeep Chandak says:

    Marketing Manager, GMC, New Delhi, INDIA
    Read your very detailed write ups on VOIP telephony. They are very good!

    Need to full details of the VOIP regulations in Canada (without going into the comments of the industry)

    Can u pls help me on this via my email address below?
    Best Wishes

  4. Scout Nibblet says:

    IT Project Manager
    While I’ve been a participant of the MP3 movement since 1996, and still participate to some degree today, I find this new decision and all its abiguities to be disheartning.

    In the first place the only people seeing dollar signs here are the record companies/publishers. The artists will see very little increase in their royalty payments. Don’t blame the artists, they are legitimately the ones who deserve you patronage, its the record company executives who see their bonus package shrinking at the end of each fiscal year, or so they alude to it doing so. Problem is, CD sales are up (using a real life algorithm to calculate the number, not the phony Enron accounting style calculation the record companies use) and we now have online sales to add to it. So how can we be seeing a shortfall of sales?

    Secondly, why are CD’s $19.95 to $24.95 in Canada when a blank CD in a jewel case is under $0.35? So the costs associated with Studio Time, musicians etc are valid costs. Ok so some promotional costs, ie posters, art work,tv show appearances and travel costs. What about the other costs? So let’s say to record and promote an Album it costs $5.00 CAD. At 200,000 copies sold, that’s a million dollars! I can assure you the last Tragically Hip album did not cost that much money to produce!!!!!!! So let’s say the artist get’s 0.03 to 0.05 per album sold, that’s $100k for the artists. . running total is $5.40 CAD, who’s taking the other $19.00?

    How do artists make money? Not through re4cord sales, but by touring. That’s when they are in control of the operation if they are smart.

    To conclude, the recent decision that the record companies find to be so great, will only further isolate the music fan from the artist and their music. The cost of a CD is already WAY TOO HIGH considering everything. Remember in 1985, costs were higher to manufacture a CD, but come on. Anyway, this move will backfire on the record companies, because we as the general public, are tired of paying inflated prices for an album with one or two reasonably appealing tracks on it. That is born out by the increased sales of single tracks on services like iTunes. It is also born out by the fact that MP3 trading is now a sport! not a pastime or an activity, its a real sport for many people out there. The RIAA proved in the USA that they are fools. The whole campaign backfired on them. They tried to litigate individuals who had no computer, who’s gradchildren put the music on while visiting, single mothers (My GOD, did you want sympathy or just to alienate anyone left who supported your cause). The best one is they then tried to shut down services around the world like they are the supreme beings of music protection law! HA, you were told where to go and how to get there during that fiasco.

    When I buy a painting form an artist, and I hang it on the wall, does that preclude me from taking a picture of it so I can have it in my office, or my walet? NOPE! So why do the record companies think they can tell me what, when, and how I can enjoy the art I just purchased? Just look at the Mona Lisa, its photogrphed at least 1000 times or more a day in Paris, why is it that no one is concerned about copies of it?

    If you want to support an artist, bo see them when they are on tour, buy there T-Shirst and other stuff, and above all, if they are selling CD’s at the show, BUY THEM THERE, cause they make more money.

    My Rant is over however I only have one last thing to say; We only want to be treated failry.

  5. The Levy doesn’t help artists
    The Levy actually makes very little difference to the artists. It does however help pay for record label executives’s considerable compensation and annual bonuses.

  6. An alternative
    Here’s what I want, and I doubt I’m alone:

    – Do whatever I want with the stuff I bought. When I buy music, I should be able to copy it to my iPod, hard disk, burn a CD, whatever. As long as it’s just for my use.

    – Not be allowed to copy the stuff I bought for others. If someone else wants it, they should have to pay for it. When I give it to them for free, I’m taking money out of the artist’s pocket.

    (If the artist has signed with a record label which takes too big a cut, that’s a different problem — the issue is labour relations, and the Competition Bureau or Industrial Relations Board needs to get involved.)

    I mean, how complicated is that? We don’t need a new Copyright Law which gets into elaborate technological details. We just need a simple principle. Personal use is okay. Pirating is not. Period.

  7. Trying to understand.
    Does this mean it’s
    -legal for me to download an album from the internet?
    -NOT legal for me to upload music to the internet?
    -NOT legal for me to copy a CD I paid for to my ipod?

    If I understand this correctly downloading an album is more to my benefit than puchasing. Is that right?

  8. O man!
    What a mess.