Canadian Copyright Collective CPCC Demands a $160 Million Bailout

It appears that Music Canada is not the only one calling on the Canadian government to hand them free money. The CPCC is also wanting a $160 Million bailout.

It seems that there is a lot of corporate interests and groups wanting free money from the Canadian government. Last month, Music Canada (formerly the Canadian Recording Industry Association) called on the Canadian government to hand them free money. That demand was to the tune of $160 million over the course of four years. The industry alleges that it is all part of a plan to fairly compensate artists for their work because, clearly, selling music in a growing market place isn’t enough. The demand was blasted by critics as “brazen”.

While many were critical of the demand, it seems that Music Canada is far from alone in demanding free bailout money. According to documents released under Access to Information, the Canadian Private Copying Collective (CPCC) is also making a similar demand. They say that they are entitled to royalties for cell phones and other similar devices even though many consumers use them to listen to music through legal subscription services.

According to the collective, legislating royalty payments at this stage would take too long. So, instead, they are demanding $40 million to be paid out to them over the next four years. That, of course, totals $160 million. Critics such as Michael Geist point out that there really isn’t any information saying how they arrived at this conclusion:

First, the industry argues that legislative reform will take too long, so rather than changing the law to apply to all smartphones and similar devices sold in Canada, it wants the government to pay what it believes would be the equivalent revenues directly out of tax revenues. Second, the source of the $40 million is revealed in the notes. The CPCC wants a copying payment for every device sold in Canada. It estimates that in Europe there is a per device copying fee of $3.50. In Canada, that would yield $40 million.

The demand is striking for several reasons. First, private copying of music has gradually diminished as Canadians gravitate to subscription services such as Spotify or ad-based streaming services that remove the need for copying. The government memo notes that “a functional, fully-licensed music streaming marketplace reduces the practice of unlicensed copying by consumers.” Second, the government also notes in the preparatory materials that private copying revenues are declining in many countries including Japan, Poland, and Portugal, which recognize the diminishing relevance of music copying in a subscription-based world.

As I wrote in a piece on the broader music industry demands, the Canadian music market is growing much faster than the world average, with Canada jumping past Australia last year to become the sixth largest music market in the world. Music collective SOCAN, a coalition member, has seen Internet streaming revenues balloon from $3.4 million in 2013 to a record-setting $49.3 million in 2017. Yet despite the success stories, the CPCC and the broader music industry wants a $160 million handout based on the premise that every device sold in Canada should have a music copying fee attached to be paid by taxpayers.

Organizations asking for bailout money in a period where the industry is experiencing growth is always going to be controversial. This is regardless of whether or not they are allegedly non-profit or unable to partake in the growth. Even factoring in the theory that the money doesn’t necessarily just go into the organization, the money is at least heading to corporations at the receiving end of all this growth in the first place. So, from many different angles, the argument that the CPCC needs a bailout is going to be an extremely tough one to make in the first place.

What is definitely unusual is all these organizations demanding bailout money in the first place. Yes, plenty of money gets funnelled through organizations related to music from the government, but we haven’t really seen organizations like Music Canada or the CPCC just flat out asking for a massive bailout like this.

If you take the viewpoint that an organization like the CPCC is basically a sunset collective, then you start looking at the idea of throwing good money after bad. Why bailout an organization that is destined to be swept into the dustbin of history? There’s a lot about this that simply doesn’t make sense from the outset.

The question is, if both Music Canada and the CPCC are demanding bailouts, who else is anyway?

Drew Wilson on Twitter: @icecube85 and Google+.

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