While some were surprised that the educational institutions did not seek judicial review of the Copyright Board decision, I suspect that many institutions came around to the view that the interim tariff was helpful in the short-term. Many institutions were facing faculty not ready to shift away from the Access Copyright licence in January 2011. The interim tariff bought them time to complete the transition. That transition now appears to begin as soon as September 2011 as universities prepare for an alternate approach based on five key sources of materials:
- textbooks purchased by faculty and students remains a common practice and will continue to be used (whether electronic or paper) for the foreseeable future.
- university and college site licences to databases of books and articles provides broad, compensated access to materials that can be incorporated into electronic coursepacks. For example, the Canadian Research Knowledge Network covers 75 universities with 75 national licences that provide research content across all disciplines. The value of these licences is over $100 million per year.
- the growth of open access and public domain materials means that many journals and other materials in professional disciplines such as law, engineering, and medicine are often freely accessible.
- fair dealing (with or without statutory reforms) must be interpreted in a broad and liberal manner and allows for many uses in appropriate circumstances. The CAUT guidelines provide a helpful look at the rights for teachers to use materials.
- pay-per-use transactional licences can be purchased for materials not otherwise available through site licenses, open access, or fair dealing. The pay-per-use approach offers more direct compensation to the author than a collective license approach.
The availability of these alternatives played a key role in the Copyright Board’s interim tariff decision. The Board’s reasons for issuing the interim tariff included:
to confirm that institutions that do not require a licence from Access Copyright are not required to deal with it, whether pursuant to the interim tariff or otherwise.
At paragraph 30, the Board expanded:
An interim decision will allow Institutions to continue to avail themselves of the existing licensing scheme if they so wish. It will provide certainty until the Board certifies a final tariff. It will not impose a single licensing solution; instead, it will add a tool Institutions can use to comply with their copyright obligations. Since Access secures rights on a non-exclusive basis,
Institutions remain free to seek licences from others, even for their uses of the Access repertoire. As always, Institutions that do not make protected uses of that repertoire are not targeted by the decision in any event.
Further, at paragraph 50, it noted:
the interim tariff we adopt in this matter is not mandatory. An Institution can avoid its application by purchasing the work, negotiating a licence to copy the work with Access or its affiliates, not using any work in the repertoire of Access or engaging only in conduct exempt from liability.
While the Board was proceeding under the assumption that institutions could obtain licences from others, it appears that Access Copyright and the publishers are actively working to shut down some alternative licensing avenues. Recent reports indicate that attempts to obtain pay-per-use digital licences have been denied by Access Copyright, which is insisting on an all-or-nothing approach that forces to universities to adopt the full licence or not use some digital materials. Several universities advise that requests for digital licences from publishers have been referred to Access Copyright, who respond with the following:
We are very pleased to advise you that the Copyright Board of Canada has issued an interim tariff that applies to post-secondary educational institutions across Canada (excluding Quebec) titled the Access Copyright Interim Post-Secondary Educational Institution Tariff, 2011-2013. As a result of this interim tariff, post-secondary educational institutions may make copies from portions of published works in the repertoire of Access Copyright on the same terms as the institutions’ previous licence agreements with Access Copyright.
Additionally, the interim tariff provides institutions such as yours with an option to elect to use the tariff to make digital copies of portions of published works in Access Copyright’s repertoire. This comprehensive digital option provides post-secondary institutions with a convenient and legal way to use content in digital format for such uses as posting material to course websites, e-reserves or emailing material to students.
Once an institution elects the digital option, it provides immediate, advanced, legal authorization for faculty to scan material and post to course websites. This provides significant time and cost savings compared to contacting rightsholders of Access Copyright directly to get permission to copy specific works case-by-case.
As a result of the Board’s decision, Access Copyright is no longer offering transactional licences to make digital copies of published works when the amount copied falls under the terms of the interim tariff. Your institution can elect to licence digital copies pursuant to Schedule G of the interim tariff by contacting us in writing. If you wish to elect to licence digital copies under the interim tariff, please have your school’s administrator contact our Licensing Services staff at email@example.com.
In case you didn’t see it, the interim tariff has been amended as of April 7, 2011 and, if your school does opt in to Schedule G, there are currently no reporting requirements for digital copies which fall under the terms of the tariff.
Access Copyright, the publishers, and authors are obviously entitled to license their works in the manner they see fit, though it is curious that Access Copyright did not disclose its intent to stop pay-per-use digital licensing to the Copyright Board. The policy does raise the question of whether authors are truly supportive a policy that leaves money on the table in the hope of pressuring universities into signing a larger deal. As for why Access Copyright is doing this, their recently released annual report provides a clue – last year the collective spent more on itself than it did in distributions to Canadian authors. More on the economics of Access Copyright in tomorrow’s post.
I started reading this, thinking that it might be balanced analysis of how Access Copyright is functioning. But he just couldn’t resist – in the last sentence he reveals his bias by claiming that AC spends more on itself than it pays out to authors. This is untrue, and shows sloppy research unworthy of a Canadian professor. AC only pays authors directly if it has their contact information. If it doesn’t, it sends the money to their publisher, with a requirement to send the authors their portion. The total amount paid to authors is much, much higher than the amount paid directly. I hope this is not indicative of the honesty of the upcoming post on AC economics, though I suspect it is.
Speaking of bias … Bob – how long have you been working for AC?
I don’t work for them. Being factually correct does not amount to being biased.
For what it’s worth I think Bob has a point and stating how AC works (intentionally or practically) is fine. There’s been obvious shilling on this blog by all sorts of parties and I don’t think this is astroturfing.
Who to believe? The well-respected professor who quotes his source (the AC Annual Report), or some anonymous guy named “Bob”?
The world is recognizing that archaic and Victorian era classrooms and reading material are holding back the potential of our youth. It won’t be too long until Access Copyright becomes a whisper of times gone by. Sad to see AC holding on to such business models. This doesn’t protect creators interests at all.
Well, I’d ask you all to believe me, but I know where that will lead. It’s next to impossible to break through the wall of irrational Geist-loyalty, even armed with evidence of clear factual mistakes.
Bob, I think it’s admirable of you to have held out hope for a balanced analysis. What a generous soul. I think all you have to do is note how selective Dr. Geist was in his quoting of the Copyright Board. He has completely ignored how scathing the Board was in response to the wave of tariff objections he himself orchestrated, and now continues a very well organized and clearly well-financed campaign against Access Copyright that, as you have noted, is based on “sloppy research unworthy of a Canadian professor.”
The saddest part in all of this, for me, is that well-intentioned educational institutions are being led down a garden path of tariff avoidance (and artist alienation) based on this same sloppy research, sloppier legal interpretation (see the Copyruight Board’s response to objectors), and an initial calculation of rising costs that was little other than politically motivated nonsense-math.
BTW, Access Copyright’s entire yearly licence revenues from ALL sources (including but not exclusive to all of Canada’s post-secondary institutions)? A mere 4% of the yearly revenues for just one university in Canada (the University of Ottawa in fact). And that’s REAL math.
I don’t think an institution such as the UofA is being “led” by Dr. Geist or anyone else external to them, their own research indicated the AC tariff would have added over $1,000,000 to their annual operating budget. In lean times, when enrollments are down and the government is tight with grants for post secondary, I don’t care where you are, $1,000,000 is a substantial amount of coin. Keep in mind, there are other costs to the institutions than simply the substantially increased tariff. Onerous reporting and audit requirements require a great deal of time and money, not to mention raising privacy concerns.
There was a time, and not so very long ago, when university presidents were considered well-paid if their salary was in the region of $200,000 a year. Now, this is the starter salary for a VP at a small university, and annual presidential payouts of close to $1 million are being reported. Other senior administrators routinely earn in the mid-hundreds of thousands. Most professors and certainly most full professors now make nearly $200,000 a year. I don’t actually have a problem with this as it may be what is needed to recruit and retain the best talent. But it doesn’t them seem appropriate for these people to denounce a few dollars per student per year in acquiring the learning materials that clearly they can’t manage without as an unreasonable burden on the system. When I was a student – admittedly quite a long time ago – professors didn’t hand out lengthy photocopied portions of books and journals. They wrote their own materials, required students to buy the texts, and expected them to know how to use a library. All of which is to say that much of the current debate is more a reflection on how teachers teach (and how students learn) than on the iniquities of copyright licensing, which may be a transient phenomenon. Or not.
I’m a bit confused as well.
Looking at the report, AC reported expenses of $8.704 million (page 14), but $23.324 million in distributions (page 19). For 2010 (all dollar figures in 1000s):
Balance forward: $29,571
@2010 provision: $24,035
There is a $22 million dollar liability against undistributed royalties; royalties where the rightsholders are being searched for.
So, I too have a bit of a time seeing where the statement “last year the collective spent more on itself than it did in distributions to Canadian authors” came from.
While a million dollars sounds like a lot, don’t forget that this is number is based on a student population of 37,600 (according to the U of A’s own website).
Works out to $26.60 per student.
Anon-K — that’s a valid confusion you have there.
I guess we’ll have to wait for part two of this exciting three-part series entitled “Why I Begrudge Artists Payment for Their Creative Work That My School Uses,” by A.N Extremelywellcompensatedfreeculturetheorist.
AC = Grand Moff Tarken. Schools = Leia
Degen = Boba Fett?
“The more you tighten your grip, Tarkin, the more star systems will slip through your fingers.”
“BTW, Access Copyright’s entire yearly licence revenues from ALL sources (including but not exclusive to all of Canada’s post-secondary institutions)? A mere 4% of the yearly revenues for just one university in Canada (the University of Ottawa in fact). And that’s REAL math. ”
John, once again you are comparing the cost of A-C licencing to university revenue as though the small relative figure somehow justifies the expense. This is irrelevant, and you would do better justify it based on what the universities get for it instead.
BTW I mailed an invoice to your home for $100. I know I did not do anything to earn it, but I figure it is such a small amount compared to your annual income that you will be happy to pay it. Thanks in advance.
@Bob RE: Executive Salaries
This is a huge pet peeve of mine, when executive bodies are making that much money, still expecting an annual increase, while at the same time forcing salaried employees to take salary cuts due to “hard times”. Executives making obscene amounts of money by most standards earn no sympathy in my book. I don’t know where you’re going that professors hand out photocopies (Though when I was a student, I wished they had, but I’ve only been out of school 12 years for Undergrad and have since completed 6 grad courses, as recently as 3 years ago. That’s 4 different universities/colleges and there was always the pain of text books…thousands of dollars worth.
@Anon-K RE: “Works out to $26.60 per student.”
It’s this mentality that drives me nuts. Well, it’s only a few dollars. $26 per semester for a student on student loans would potentially add months to the payback period. It took me 9.5 years at almost $500/mo to pay my loans back because I come from a low-income family and couldn’t have done university without. It’s always the student that gets to carry the burden. A few dollars here, a few dollars there plus regular tuition increases potentially adds hundreds per year. Added to the fact that inflation is outpacing the cost of living…it’s the student gets $c3r3d.
Universities more and more are being run like business…degree-mills as one might have it. Less research focused, less academic freedom, less student focused, top heavy secretive less accountable executive management with only an eye on the bottom dollar. I’m not saying the UofA falls in to this category, but a $1,000,000 is a lot of caviar!!!!
And the conclusion is surely that the business models now applied to the public sector (universities, schools, hospitals, government) have to accommodate the costs of doing business. These include paying for their raw materials. Computers are essential, but they aren’t handed out free. Content likewise.
But as a business, if you can LEGALLY get your content cheaper, wouldn’t this be the prudent way to go? Contrary to popular belief and fear-mongering, universities are not looking to pirate materials or ruin creators. The content owner(s) still will get compensated accordingly. Universities are looking at alternative “open” materials and/or alternative licensing schemes, such as direct licensing…which cuts AC out as the middle-man. This is simply good business.
Couldn’t agree more – I said as much earlier, that AC might be a transient phenomenon. And I agree also that universities aren’t trying to do anything wrong. But it is hardly plausible that any alternatives will eliminate everything that does go through AC. Some publishers operate direct licensing. Some effectively bake reuse costs into their base pricing. But many publishers do not want to get into micro-licensing, which is why they use organizations like AC. And you also need to look at the relative costs. It isn’t going to be less expensive to process each transaction than to use the AC system.
I think there is something basic being overlooked.
If AC is providing a good value that will let universities operate without undue headaches then they would likely jump at it. I know if I was running a business this would be my take.
The seeming fact that they are looking elsewhere begs the question of AC’s value. Either the price is too high compared to other options or the requirements that come with it are too onerous.
And the silly argument that ‘I’m only asking for 4% of your income, you won’t miss it’ should be shelved, it just dosen’t fly outside of the AC boardroom.
Of course its possible that the universities and/or AC are just both being pigheaded … never discount that factor 😉
“It isn’t going to be less expensive to process each transaction than to use the AC system.”
Depends on how it’s implemented. If you already have an existing copyright procurement department/team with a well established contact list, which I realize not all universities do, there is potential for great savings. Even if you don’t, if you hire a couple people to do this, and that’s all they do, even say at $150,000 (Including benefits) per FTE that leaves you $750,000 plus what was already being paid to AC under the old tariff. A lot of usage rights can be purchased for this kind of money. No, not more than AC can offer, but how many universities even come close to utilizing AC’s full library? I think targeted licensing and open sources are the direction many universities are going to be heading in the not so distant future. I don’t consider this good for the student since it has a limiting factor on the learning resources available but this really has little to do about education.
On a side note, but related to the new tariff. How much was the increase…over 1000% wasn’t it? I was thinking while I was out at lunch today, “What would happen if the recording industry tries such a move?” After all their sales are down, or so they claim. So, an album on iTunes that might cost $12.99 now costs $129.99, PLUS, now you have to report all your usage and submit to audits where you have your hardware scanned for illegal copies. Something tells me people would look to alternative, cheaper sources and independent artists.
Sorry, my math sucks today….should read
…even say at $150,000 (Including benefits) per FTE that leaves you $700,000…
$700,000 might seem a lot but transactional direct permissions typically have a $500 or $1000 minimum because the publisher needs to recoup both their admin cost of processing these requests and the royalty component.
admin cost of processing
This process sounds like a prime candidate for automation, and the internet.
Dramatically reduce the admin cost, perhaps to less than 100th of the costs you quote. When transactional costs reach that level, the barriers you speak of disappear.
It could even be outsourced to Paypal or Google :-)…
“Well, I’d ask you all to believe me, but I know where that will lead. It’s next to impossible to break through the wall of irrational Geist-loyalty, even armed with evidence of clear factual mistakes. ”
After reading many of your comments on this site I am stirred to leave one of my own.
Has it ever occurred you that perhaps you are woefully inadequate to the task at hand.
As you have again and again tried to bring your wisdom to the veneration of Mr. Geist, it is also you who again and again note your own failure.
Einstein once defined insanity as doing the same thing over and over again and expecting different results.
Likewise, how many courses does a typical University offer? A large university like the UofA or UofT might offer what, 1500-2000 courses, perhaps more. Such information is pretty scarce. Even so, that would probably cover 3000-5000 separate books. I’m estimating an average of 1.5 books per course. I know some have more and some have none. It’s just an estimate. The “Admin cost” to set up an account/agreement is a one time deal, then should be negligible after that. “$500 or $1000” for a single book, perhaps, but if you come at them with a list 500 books they would be foolish to not cut a deal.
This assumes an institution replaces every book and does not pursue open options.
Folks, you need to practice paying attention, which admittedly is very hard to do when the MO of this blog (and a number of its defenders) is distraction. The argument is not “the relative smallness of the ask is it’s own justification — I’m only asking 4%, so you won’t miss it.” No-one said that. I didn’t say it. Access Copyright didn’t say it.
I do the percentage calculation so we can get an accurate picture of the players at the table, not to justify expense. The tariff fee will be justified by the decision of the Copyright Board, which will weigh known, tracked usage and set a fair price for it in between what Access Copyright has calculated and what those representing education are willing to pay. As the Copyright Board rightly pointed out several times, the tariff exists to compensate for actual use, so if an institution does not want to pay, all they need to do is not use. This is not “pay me for nothing” as Darryl idiotically suggests; it’s “if you intend to keep using my stuff, here’s the negotiated fair price for it.”
Where the percentage calculation bears fruit is in considering the so-called burden to students. Can I assume we’ve all paid student loans? Good, then let’s get off our high horses of woe is me, and look at the students of tomorrow under an AC tariff and in an AC free environment. We’d all like to save them whatever per-student fee it will work out to be (remember, the fee will be fair because it will represent actual use).
Geist & Co. suggest we help the student by eliminating the per-student fee altogether by opting out of AC content. Great, but that content needs to be replaced with something else, maybe some open access stuff but likely the majority of it from private licensing, which will carry with it costs that can also be calculated per student. Even open access costs money to create, especially in an institutional educational environment — these costs are simply calculated differently than a traditional royalty structure. Make no mistake, the costs will still be there, and someone (most likely the students) will be paying them.
I’ve had an open call out on bets that tuition and student fee rates will drop in the next five years as a result of widespread AC opt-out. So far, no takers.
So, who will replace the lost content (assuming it’s even possible to provide a robust learning environment without using the AC repertoire)? Perhaps CKRN through their university consortium licensing structure. Perhaps. Who pays for CKRN’s corporate structure and administration costs, btw? Canada’s large universities. Where do they get their money? Tuition and student fees, as well as healthy public and corporate funding.
Again… will tuition and student fees go down if post-secondary education manages their end run around collectively licensed Canadian content? Let me know your wagers.
They could go down, of course; it’s economically possible that these two sets of onerous fees are removed from students, which is where my initial calculation comes in. Somebody in this fight could afford to subsidize student use of content so they don’t pay a per-student fee. Is it the collective of small Canadian creators and publishers who provide clearly valuable and much used content, or a consoritium of massive-budget universities looking to shave .oowhatever of a percentage point from their combined economic might?
Honestly, look at the real numbers and then ask yourself again — who is the Goliath and who the David in this battle?
My point about $26.60 per student is to put the million dollar number in perspective. At that rate, for Queen’s University in Kingston, Ont (enrolment 23,883 according to the Queens website) the amount would be about $635,300. Or for RMC (enrolment of ~1200) $31920. This of course assumes the $26.60 rate is consistent across the size of the institution, which is probably not completely true. While it is yet another fee that the student will need to absorb, frankly, why should the student be isolated from the real world costs of doing business (in the case of RMC, there are students who pay to go there). This sounds harsher than intended; I’ve had too many experiences with new grads that expect everything to be handed to them and get a rude awakening when they enter the workforce.
As far as the tariff increase is concerned… you are correct that a PORTION of the tariff went up by about 1000%. However, the overall impact was no where near that much, as there were reductions in other areas. From the “University of Alberta Looking to Walk Away from Access Copyright” link below, “The increase at the U of A alone would involve an annual payment rise from $763,000 to $1,835,662”, an overall increase of 140% (the new tariff payment would be 240% of the old one). This means that the cost to the student at the new tariff rates would be $48.82 per year, as opposed to $20.34 annually.
AC holds creators hostage
I find a bit ironic that Degen vilifies this post as “Why I Begrudge Artists Payment…” while not recognizing that AC actually holds creators hostage by requiring an all or nothing license agreement from the institutions. This kind of blanket license does not make sense and is just a grab for money.
Anon-K said: “I’ve had too many experiences with new grads that expect everything to be handed to them and get a rude awakening when they enter the workforce.”
I too have experienced this. Too many coddled kids coming out of school with a silver spoon in their mouth with no “real” life experience and they get very rude awakening when they actually have to start cooking, doing their own laundry, paying for things and seeing the real value of “stuff”. REAL deadlines at work!?!?!?! Makes me snicker. I lived what is considered below the poverty line between the ages of about 14 – 29. I didn’t have all the latest gadgets and rarely had money to go out, unless you consider loitering around town going out, but it taught me how to live and respect for money, which few kids seem to have any concept of today.
In regards to the tariff, while I agree that it’s not a substantial amount per student, a 140% increase is still substantial and screams of a money grab. In any case, it really the onerous reporting requirements and potential invasion of privacy I have the biggest problem with. They want to scan all employee e-mails for infringing works? REALLY?!?!?! Perhaps when hell freezes over. 😉 I’d convert my account to POP and remove everything from the server before I’d allow that to happen. I don’t have infringing material in my account, it’s the principle of assumed guilt I have a problem with. If they want to search e-mail accounts of all staff and/or students, they should need just cause and a court ordered warrant for that kind of privacy invasion. Luckily, my university is one which decided to walk away from AC.
“the tariff exists to compensate for actual use”
This is more-or-less true for the current tariff. It is not at all true for the new one they want to implement which will charge a flat blanket fee which is totally divorced from actual usage, AND increase the reporting requirements to boot.
IF it is true that AC is stopping pay-per-use for items in their catalog in favor of an all or nothing annual fee, then they are in essence saying it’s my way or the highway.
That’s fine, it’s their business … just please loose the cries of indignation when people pull out into the 100KM lane and don’t look back.
Creators should be paid but AC is not the only stop along the road, and with their recent track record of closing deals creators may want to consider looking for other destinations.
Inquiring minds want to know?
And once again, can anyone point to a reason why people are walking away from AC other than the cost/liabilities that they are asking?
Is MG such a messianic figure that he can lead people astray over common sense?
Would not fair value and requirements close the deal?
One of the things I see about this whole debate is it’s relationship to new models for copyrighted works. As a simple contrast, compare the AC model against the Open Access model. Look at it from the viewpoints of the educational institutions, the students, the authors, and the AC collective organization.
Which “model” works best in the long term, for which parties?
There are really only 2 parties that really matter in this whole equation, the authors and the students. Each are affected by the decisions made by the larger organizations and the curriculum choices, but when you boil it down only the quality of education for the students and the authors of the material really matter.
Which model is more cost efficient in terms of administrative overhead and total cost of educational content to students? Historical? Now? Future?
Considering the interconnected and automated world we live in, are there other models that might be even more efficient than both of these?
I think what we are seeing is a clash between some “out of the box” thinking by the people charged with creating effective and flexible educational materials, and the traditional collective that services the market for that material. The open media model has always been an option, but as long as the collective model was clearly more cost efficient overall, it dominated. Modern automated administration has decreased the costs associated with migration to an open access model plus selective materials. When you combine that with the increased costs of the collective model, this issue isn’t anywhere as clear anymore.
In crass business terms, AC is up against their customers, who have found a better way to meet their needs. AC has competition, and that competition is a new way of thinking, enabled by advancing technology. AC needs to adapt to that new reality.
Authors and students may need to change the way they supply and access materials, but they will still be able to meet their needs under either model, or even new models.
There is a bigger picture here. Future forms of education, enabled by that same technology, will be affected by the shape of the licensing models for educational material. Which models would work best in that future?
There is much more than cost of content to consider
In providing any service there is more than just the content to consider. There is the method of delivery, burden of administration, privacy issues…
Business relationships can be simple to complex but at the en of the day it’s to the one paying to decide.
If AC loses it’s clients it will have no one to blame but itself, end of story
“And once again, can anyone point to a reason why people are walking away from AC other than the cost/liabilities that they are asking?”
For us, I believe, it was pretty much pure cost. Between the extra cost of the tariff (Approximately 40,000 students) plus the extra man hours required for the reporting it was simply more cost effective to pull away from AC. Added to that we’ve been on the open materials bandwagon for quite some time (Long before the new tariff) and have a well established copyright procurement group with a very large portfolio already outside of AC.
One big advantage here, of course, is that we don’t have to have that conversation with the academic group about e-mail scans, because you know some of them would morally object to it and cause a hell of a stink. I would bet good money some would quit before submitting to such a scan.
Yes, AC spent more on itself than it did on repertoire authors.
Their estimate is $3.99 million. And one can calculate this figure from the bar graphs it released to ‘prove’ how nice they were.
On the other hand, their costs were: $8.7 million.
So, for every dollar they gave a writer they spent: $2.29 on themselves.
There is a huge difference between a “repertoire author” and the creators receiving the far greater share of the distribution. The unlocatable “repertoire” payments were a solution – a less-than-perfect solution – to the failure (despite good faith efforts)to find the recipient. It represents just a small portion of the actual distribution to creators. To use that as the entire distribution amount is simply incorrect.
You and Geist also both ignore the fact that a move away from “repertoire” payments to the PayBack system is fundamentally fair, and results in greater accuracy in making sure money for usage gets into the hands of the folks who actually created the works used.
I thought we were all about the fairness over here, no?
There’s no question disagreements between Canadian creators exist about how AC should be distributing royalties (what? people fighting over money?), but criticism stemming from a desire to get a bigger share of the pot despite one’s own work not being used get no traction with me.
Which is why I agree with the tariff since, as the Copyright Board recognizes, it can’t exist if the use is not happening.