Debate Sides Form as Canada Gears Up for Copyright Reform Drew Wilson | December 23, 2017 New Zealand isn’t the only country gearing up for copyright reform. Canada is also going to undertake a copyright reform process as well. Canada has seen its share of copyright reform debates over the last decade. While some countries are debating whether or not it is right to introduce online censorship, the Canadian debate may very well look a little different. Music Canada, formerly the controversial Canadian Recording Industry Association (CRIA), has already begun by laying out what it wants in the copyright reform debate. For long time supporters, the traditional position has always been that the multinational record labels through this organization want to bring in mass litigation. Suing as many alleged copyright infringers and hamstringing innovation by introducing strict anti-circumvention laws while trying to eliminate fair dealing provisions is a very familiar set of goals for the organization. Interestingly enough, they seem to be taking on a different tactic this time around. In a document, Music Canada tries to push the idea of the so-called value gap. In a nutshell, Music Canada takes aim at a multitude of platforms that have allowed artists to flourish and make their name known without the need of major corporate backing. Their argument is that because people can find out about producers content through sites like Spotify and YouTube, artists simply aren’t being paid. As such, Music Canada is hoping to target safe harbour rules that have allowed these platforms to exist in the first place. Music Canada claims that a site like YouTube allows users to upload their own content. They make the leap that users are primarily uploading copyright infringing material and profiting off of it through ads. Of course, as a lot of observers know, major music labels already have a host of deals with YouTube which allows them to earn a larger chunk of revenue from the music they produce. In addition, YouTube also employs ContentID so that record labels can compel YouTube to not allow uploads of their music. Additionally, YouTube has a strict DMCA policy where a mere copyright complaint from anyway can easily be enough to take the video down. Meanwhile, it is also widely known that some more independent labels and artists post their own music on the site themselves. Some labels have official accounts where they upload their music in an authorized manner. So to say that all YouTube is is a site that simply allows users to upload infringing material seems to be a rather misleading claim. Music Canada then goes on to take aim at Google News. They say that Google News posts snippets of articles. While they admit that Google News links back to the original source, Music Canada claims that few do click through and, instead, simply read the news off of Google News instead. Of course, as of today, when one browses Google News, the most users will get are headlines and maybe the first sentence of the article. As anyone who works journalism knows, the headline and first sentence isn’t enough to get a good grasp of the story in question. Music Canada then concludes that they want change with the safe harbour laws. They seem to suggest that weakening these laws is the way to go. So, really, they want to take aim at websites and the laws that protect them. Of course, as Michael Geist points out, the claims that artists are getting so little and that revenue is falling doesn’t really hold a lot of water: Yesterday I posted on SOCAN generating a 10X increase in Internet streaming revenues with growth rates of over 100 per cent over the past year for songwriters, composers, and music publishers. The industry numbers from Music Canada and IFPI tell a similar story. According to industry data, the Canadian music market is growing much faster than the world average (12.8 per cent in 2016 vs. 5.9 per cent globally), streaming revenues more than doubled last year to US$127.9 million (up from US$49.82 million) growing far faster than the world average of 60.4 per cent, the Canadian digital share of revenues of 63 per cent is far above the global average of 50 per cent, and Canada has leaped past Australia to become the 6th largest music market in the world. In fact, as the chart below indicates, the growth of streaming revenues in Canada since the 2012 copyright reforms has increased significantly year-after-year with growth rates for the industry and collectives mirroring each other. Second, the U.S. DMCA notice-and-takedown system, which the industry claims is to blame lower royalty rates on YouTube, does not exist in Canadian law. Music Canada wants government intervention into what amounts to a negotiated agreement by increasing potential liability for intermediaries in the hope of extracting better terms and higher royalty rates. However, focusing on Canadian copyright law to do so makes little sense since there is no notice-and-takedown system to amend. The Value Gap report may fail to make the case for Canadian legislative reform, but it does point to the sharp decline of Canadians who rely on pirated music. The report cites data from an IFPI international report on the listening habits of music consumers around the world. That report provided few details on the situation in Canada, but Music Canada discloses previously unreleased information specifically on Canadian consumers. It reports that Canadians spend 15.4 hours per week listening to music with listening to pirated music only accounting for 6 per cent of that time. A range of authorized and compensated sources, including radio, downloads, and streaming represents the vast majority of music listening habits. In other words, the industry’s data confirms that Canadian consumers show little interest in listening pirated music, preferring many other sources that contribute to its fast growing revenues. Some would argue that there has been a delay between piracy took hold and when the legitimate marketplace finally started to grow. As many long term observers know, when filesharing clients like Napster and Kazaa made their big splashes on the Internet, major record labels showed little interest in fostering a legitimate marketplace online. Instead, they opted to litigate as many people as possible. The filing of filesharing lawsuits is well documented. Many argued at the time that the major record labels are trying to put the genie back in the bottle during a time when the digital revolution was taking hold. It wasn’t until Apple came out with the iPod and iTunes that major record labels reluctantly started trying selling music online. Even then, the music was heavily encumbered by DRM that heavily restricts playback. The attitude that major labels just want the Internet to go away and have people return to the record stores ultimately proved to be a very costly mistake in the long run. So, it is likely that reluctance to embrace the digital age for years that may have cost the labels billions. Only in recent years has music sales started to increase. The calls for potentially weakening safe harbour laws isn’t the only thing being debated in Canada right now. At the Canadian telecommunications regulator, there are also calls to implement Internet censorship. Bell Canada is planning on pushing for a government controlled blacklist with no court oversight. Shaw, meanwhile, called for similar. Contrary to some reports, Shaw actually called for judicial oversight of such a blacklist unlike Bell. While these debates are happening on the regulator side of things, it is unclear if these ideas will also make their way into the copyright debate as well. So, of course, the question is, what is the governments position in all of this? Michael Geist offers this summary of what Canada is looking at: How can we ensure that the Copyright Act functions efficiently to foster a marketplace that is transparent, promotes innovation and access for users, and supports creators in getting fair market value for their copyrighted content? How can we ensure that the copyright framework continues to function in an environment of constant change in technology and business possibilities? Finally, how can our domestic regime position Canadian creators, users, and innovators to compete on and harness the full potential of the global stage? So, there are a number of interesting positions being played out. The major foreign labels seemed to have basically backed off of pushing for mass litigation and are focusing on safe harbour laws. Music Canada is definitely in a weak position for a number of reasons. For one, they are running up against certain realities on how things work on the Internet as a number of positions are easily debunked just by looking at how different sites operate. For another, they are pushing for something that is definitely best left for negotiation between themselves and some of these large sites. Finally, the government position on what they are seeing is miles apart from what Music Canada is hoping to achieve. Meanwhile, two ISPs are looking at internet censorship no doubt thanks to major multi-national corporate interests like movie studios and record labels. Even then, there is no real evidence at this stage to suggest that censorship will even enter the debate because it is currently sitting in the communications regulator’s lap. Still, it’s difficult to ignore the fact that ISPs in Canada are even entertaining the fact of online censorship in the first place. Finally, the government seems to be looking at things from a pro-innovation standpoint. Their focus seems to be on how they can promote the Canadian position on the world stage. What will be interesting is to see if that position holds or if lobbying will eventually win out and they start leaning towards restrictive copyright laws as previous governments have done before with disastrous results. At this stage, we are so early into the latest round of the copyright debate. So, positions are still being formed. While it doesn’t mean to hold off on making your position heard, it does mean that the different sides are still forming at this point. Drew Wilson on Twitter: @icecube85 and Google+.