Canadian Association of Broadcasters Attacks CRIA

This month, more unfavorable news for the CRIA (Canadian recording Industry Association) has emerged.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

Surprisingly, there’s a big difference between this instance and past circumstances. This week, the Canadian Association of Broadcasters attacked the CRIA. In a unanimous resolution amongst its members, the CAB stated it “…will take all measures to publicly oppose this egregious and abusive demand by the record labels including taking action before Parliament, the Copyright Board and the courts.” It appears the CRIA has made a powerful enemy.

The Canadian Association of Broadcasters, according to their about page, represents a majority of broadcasters from radio to television. Their members include A & E Television Networks, BBC Worldwide Canada Ltd., CBS Paramount International Television, Discovery Communications Inc., Metro Goldwyn Mayer Studios Inc., National Institute of Broadcasting (NIB), NBC Universal, 20th Century Fox / Incendo T.V. Dist., Télé-Québec, Telus Business Solutions, and Warner Bros. International Television Dist among others. Many of these powerful companies are MPAA members, which the CRIA appears to have upset.

The members of the CRIA include the big four record labels whose parent companies make up a majority of the RIAA (Recording Industry Association of America) membership, and a handful of small Canadian record labels. Exactly how did the members of the MPAA indirectly declare war on the members of the RIAA? From something surprisingly under the radar – tariff 22.

SOCAN (Society of Composers, Authors and Music Publishers of Canada) is one of the organizations backing tariff 22. According to SOCAN, the organization has “modified its original proposal for Tariff 22 by creating various categories of music uses under the tariff, with accompanying rates and services […] These encompass communications such as permanent and temporary downloads, on-demand streaming, audio webcasts, webcasts of radio or TV station signals and communications via game sites.” In essence, they demand that retroactive fees dating clear back to 1996. Many objectors, including CAB, were quick to denounce such demands, but according to the decision by the copyright board, the objectors faced a significant setback saying, “SOCAN undertook not to pursue small users retroactively. SOCAN will however claim royalties from large users starting in 1996. Each situation will be looked at on a case by case basis by SOCAN. Common sense and economics will prevail.” No real mystery why this would upset the members of CAB – and they knew exactly who to point the finger of blame at.

While the decision was a significant blow, it’s not over yet given that the decision also states, “For the following reasons, we have decided to deal at this time only with those uses that are targeted in CSI – Online Music. First, this part of the tariff will, in all likelihood, generate the bulk of Tariff 22 royalties. Second, dealing with the other uses targeted in Tariff 22 raises administrative and wording issues that will require extensive consultations with the parties. The tariff for these uses will be certified at a later date. That being said, for the sake of convenience and coherence, the descriptive and analytical parts of these reasons are written as if we were dealing with all of proposed Tariff 22.” So while another decision is to be expected, it looks like CAB is stepping the war up from a cold war to an all out public deathmatch.

According to the press release issued by CAB, which isn’t a press release that minces words on the subject, their members pay up to $70 million in royalties annually through nine different tariffs to four different collectives. “This is set to increase substantially in the face of a newly proposed reproduction right tariff filed on behalf of the Canadian Recording Industry Association (CRIA) through the Audio-Video Licensing Agency (AVLA) and the Société de gestion collective des droits des producteurs de phonogrammes et de vidéogrammes du Québec (SOPROQ).” The press release says, “The record labels are demanding an additional payment close to $50 million annually for the right to make technical reproductions that are secondary to playing the music over the air – a right for which radio broadcasters already pay.”

Amidst the fury: “The irony of the record labels’ demand is that private radio creates value for the recording industry. Private radio broadcasters are deeply concerned about the attempt by the recording industry to recoup its losses by claiming additional payments for music played on the air,” said CAB President & CEO Glenn O’Farrell. “While broadcasters recognize that artists, producers and other rights-holders should be fairly compensated for the use of their songs, our industry believes that this tariff proposal is a blatant abuse of the principles of the Copyright Act. This demand won’t help the record labels – it will only hurt one of the few areas that is still working well for them in the digital world.”

File-sharing allegedly is one of the reasons for these losses. CRIA has been saying this for some time. This concept of file-sharing being responsible for sale losses was something tackled by an independent entity and commissioned by the Industry Canada. According to this study, there is no evidence to suggest that file-sharing can be blamed for an increase or a decrease in sales. Essentially speaking, according to in-depth research, file-sharing has no effect on music sales as a whole. On the other hand, amongst the file-sharing sub-population in Canada, file-sharing has had a positive effect in music sales within Canada. Whether or not CAB realizes this, though, may be beside the point given that CRIAs drum beat on file-sharing seems to be used against them in this instance.

The announcement comes at interesting times. Just two days after CABs announcement, Lawrence Lessig, during a speech at TED addressed the issue. He suggests that ASCAP (The American Society of Composers, Authors and Publishers) at one point kept increasing royalty rates for radio play over 400%. In response, the broadcasters banded together to form BMI (Broadcasting Music Inc) and essentially started broadcasting public domain content as a result of the royalty rate demands. With no public backlash to this action, ASCAP couldn’t maintain control of the industry and “buckled” under the pressure.

It’s probably unlikely that CAB members would resort to this given that they say how they would resort to things like the Canadian government and the Canadian courts to fight the tariff 22 decision. Another thing to consider is that CAB members also have a lot of money that would go into defending their financial interests. Whether or not this turns out to be a game of chicken between the two organizations is something that won’t be known for some time. A deal being reached between them or one of the organizations backing down from the fight are always possibilities, but what is known is that one side has emitted a war cry on this copyright debacle.

Drew Wilson on Twitter: @icecube85 and Google+.

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