Senate Hearings on Bill C-11 – A Look at the Tenth Hearing (First Segment)

We are continuing our special coverage of the Bill C-11 hearing at the Senate. This one happens to be the first segment of hearing ten.

We finally made it to the last hearing of the week. This covers the first segment of that hearing.

If you want a quick reference to the epic amounts of coverage we gave this, you can check that out below:

Hearing 1 – Privacy Commissioner and Global Affairs/Justice Department
Hearing 2 – Digital rights organizations and lobby groups (1)
Hearing 3 – Lobby groups (2) and platforms (1)
Hearing 4 – Lobby groups (3) and lobby groups (4)
Hearing 5 – Lobby groups (5) and lobby groups (6)
Hearing 6 – Music Canada / platforms (2) and lobby groups (7)
Hearing 7 – Scholars/researhers and digital first creators (1)
Hearing 8 – Digital first creators (2) / lobby groups (8)
Hearing 9 – Digital first creator (3) / lobby group (9) / platform (3) / Lobby group (10)

So, going into this 10th hearing, we can’t help but also note that next week, no hearings are scheduled. On the one hand, this does suggest that this special coverage might be coming to an end. On the other hand, during the second segment of the ninth hearing, Senator Leo Housakos commented that there might be some more hearings in the weeks ahead. So, it’s still hard to say if these hearings are basically over. Still, there is currently one more hearing left to go.

As always, the video we are watching can be found here. Well offer the usual disclaimer that, in terms of thoroughness, nothing will beat an official transcript or the official video. Still, we’ll be happy to do our best to summarize what is said and offer analysis on what we heard. With that, let’s take a look inside this hearing.

Opening Remarks

Patrick Aldous of Nettwerk Music Group Inc. opened with his remarks. He said that they appreciate the government’s well-intentioned effort to support the Canadian music economy through Bill C-11, however, the government will end up with the opposite effect. Cancon has little relevance to music discovery. Streaming has shifted music away from terrestrial radio and other traditional media towards what has been referred to as online scenes. Understanding these scenes can help open up a pathway to a global audience. These scenes are digital in nature and not bound by geography. Moving towards a digital marketing strategy has had a tremendous impact on Nettwerks artists and, by extension, their business.

From there, he notes that Canadian artists earn roughly 90% of their streaming revenues from beyond Canada’s borders. A cancon style regulatory approach on streaming would be inconsistent with the borderless career aspirations of Canadian artists. At best, the cancon system would be completely irrelevant to Nettwerks strategy of music discovery. At worst, it could significantly damage it. A cancon style regulatory approach could seriously damage the exportability of a Canadian artist.

He said that their research says that when an artist becomes successful solely within a geographically defined music market, it implies that the artist is only meaningful within that geographical region. That could dramatically restrict an artists ability to reach a global audience, making it extremely difficult for that artist to break out of that market. Imposing a cancon style regulatory regime on music streaming services would exponentially amplify this effect.

To avoid this, Canadian artists would be incentivized to sign onto record labels in a larger music market such as the US and would be disincentivized to sign on to Canadian record labels. He says that we live in a flat digital world that works to the great benefit to Canadian artists. Putting in this wall or regulation will only serve to lock Canadian artists in.

After that, he spoke about the knock-on effect. They share the concerns in Spotify’s testimony where other governments may follow in Canada’s lead with respect to regulation in streaming services. They worry that this will result in protectionist digital music markets around the world which would result in the fracturing of digital music market services along national lines. That could be very damaging to any global facing business model and significantly reduce the ability of any Canadian company to export its artists and develop their careers.

From there, he tackles the UGD (User Generated Content) issue. He says that Nettwerk has been able to leverage virtual moments of user generated content on YouTube, Instagram, and TikTok into accelerants of international success for Canadian artists. It is the fan driven unregulated nature of this content that makes it so effective. Regulation of user generated content would be highly detrimental to this phenomenon. Bill C-11 inserts an unnecessary regulation of private commercial relationships.

He then notes that Nettwerk negotiated its first agreement with Spotify in 2009 and Nettwerk is one of the few independent labels to have a direct distribution relationship with Apple, Spotify, and Amazon Music. Be inserting regulations into those carefully negotiated and long fostered private relationships, Bill c-11 would effectively make the CRTC a party to their private commercial agreements. The uninfluenced data they receive from their streaming partners is essential for them to better understand the ever evolving factors that influence music discovery and their platforms. Imposing a regulatory regime on those services would compromise that data and impeded their ability to grow their Canadian artists globally.

He concludes that the success of artists in the steaming economy should be fostered and developed using the borderless tools that the streaming services already provide. He believes that imposing such regulatory regimes would close doors of opportunity that are currently open to Canadian artists and ultimately decrease the number of artists that are able to have sustainable careers around the world. He then supports the recommendations made by DiMA. He also calls for the removal of provisions that allows the CRTC to interfere in algorithmic decision making. He also supports Spotify’s recommendations on criteria the CRTC must consider before regulating streaming music services. What’s more, he supports YouTube’s position of Section 4.2 with regards to user generated content.

From there, he closed with believing that Canada should adopt a bottom up approach rather than a top down approach with regards to regulation in these spheres.

(it’s really interesting hearing the similarities that record labels have to digital first creators with regard to the bill. You really get that sense of unity for the opposition to this bill just by listening to him.)

Clotilde Heibing of the Alliance nationale de l’industrie musicale then opened with her remarks. She noted that it is regrettable that they have to fight for what gains they have made in the last few years.

Natalie Bernardin, also of the Alliance nationale de l’industrie musicale, joined in. She touched on Section 5.2 and admits this might not be what’s most passionately debated in Bill C-11, but she says that it’s important to them. This deals with requirements for the CRTC to consult with minority groups which the CRTC wanted to have removed.

Questioning the Witnesses

Senator Paula Simons began questions in this hearing. She notes that they’ve talked a lot about how the digital disruption has affected television, but not nearly enough was talked about how the digital disruption has affected the traditional music business model was blown apart by digital disruption. When Aldous is talking about how much their artists are getting from streaming, that is a very important thing for people to differentiate.

She says that one of the things the government has said to them was that they need to have some kind of way to scope in the giant record labels that use YouTube as an alternative or as a way of competing with Spotify and Apple and use YouTube as a music streaming service. Specifically, this is targeted at the Big 3 major record labels like Sony. She says that she wanted to know where Nettwerk would fit into that paradigm. She asked if Nettwerk streams on YouTube in that way or are the deals more exclusive to the more commercial music streaming services?

Aldous responded by saying that yes, they consider YouTube a valuable partner as well. Indeed, they have direct business deals with Apple, Spotify, and Amazon Music, but YouTube is also a partner in their strategy. All of their music is available on YouTube and they find it’s a great way to achieve fan engagement.

Senator Simons commented that the government argues that they need to have 4.2 (2) in order to capture big record labels on YouTube so that they’re not providing unfair competition to Spotify.

Aldous responded that they certainly have nowhere near the market share of the major record labels. However, it is his understanding that they would be captured within that particular provision. A distinction is not made with the size of the company. This is thanks to the revenue generating provision that would lead to their music being captured under that provision.

Senator Simons commented that all of their artists have that registry number. Aldous responded that this is correct. Senator Simons asked if Aldous has seen YouTube’s proposed amendments.

Aldous responded that he has not seen the full text from them. He’s discussed them with the representatives of YouTube, however, he doesn’t have an intimate working knowledge of those provisions.

Senator Simons asked that, as he understands them, is he content with YouTube’s position.

Aldous responded that YouTube’s suggestions represent a bit of a compromise on 4.2. They have readily said to them that for-profit commercial music is something that they are willing to let go of which is his understanding. Nettwerks position with regards to 4.2 is more specifically focused in on user generated content and how that interacts with his strategy of generating these viral moments in the context of social media.

Senator Simons asked if he was going to get caught between the devil and the deep blue sea. This is because Nettwerk doesn’t have anywhere near the market share of a label like Sony. At the same time, Nettwerk is not akin to a kid with a guitar and a web cam. They are making highly produced music meant for a highly competitive market, but in a much narrower niche.

Aldous responded that this is correct. He thinks that this is part of the challenge with that particular provision. It cuts a rather wide swath. The challenges at the House of Commons level is what constitutes a for profit or revenue generating enterprise was one of their concerns coming out of those hearings. How they can get some better definition as to what is a revenue generating enterprise as those are not all created equal as Senator Simons rightly points out.

Senator Rene Cormier wanted to get some of the other witnesses responses to what they are aware of of the perception of artists about the bill. He notes that they’ve heard a lot from YouTubers. They spoke about the negative impact this bill would have on them. he’s sure they have creatives among their members that also use YouTube who stream content. He wanted to know what they think about this bill and if this bill stops them from reaching audiences outside of Canada. What are the benefits of the bill? He wanted them to speak from the artists position on what their point of view of the bill is.

Heibing responded that they see a very clear difference between content that is created by professionals and content created by people who are not professionals. They are in a very different position where they have many different self-generating artists and businesses. Their audiences are very regional. Sometimes it’s national, but rarely international. They need protections.

Bernardin added that their artists are very very small fish in a huge ocean. She was listening to another witness and wanted to have their artists to have access to this type of platform of course. This is because the Canadian market, the francophone market, makes the ocean even smaller. So the market is smaller. So, they have to aim high so these people can have access and they have to be discoverable. Then, the problem becomes that a number of businesses in their communities is a very small number. They’re talking about a community of 11 start ups, so they need to better fund these businesses so they are better able to fight and find their own place in the market. They don’t have the ability to become discoverable compared to these large businesses, so they are behind the 8-ball.

(Considering how easy it is to enter the market, if you aren’t posting your stuff on these platforms you want to be in and complain you aren’t discoverable, then you really only have yourself to blame, really. You don’t need legislation to make an account and start uploading your work.)

Senator Cormier then spoke about 5.2 with regards to consultations with the witnesses.

Senator Fabian Manning noted Aldous’s comments about building a business relationship with music streaming services. At the same time, he mentioned that Bill C-11 could work at the detriment of their efforts. Aldous said that Bill C-11 would effectively make the CRTC a party to their private negotiations with no real benefit to Canadian artists or consumers. He asked about the detriments this bill could have and how artists will respond of Bill C-11 is passed in its current form.

Aldous responded that the implications is that, as mentioned in his opening statement, we currently have an open flat world for Canadian artists within digital streaming services. Within that open and flat world, they are able to receive very informative sets of data from their partners that allows them to both interpret the success of their artists and predict to some degree of accuracy where some of that success may go internationally.

Their concerns are with the regulatory approach that could interfere with that how those services interact with Canadian music. It will result in a segregation of Canadian music within Canada itself. further, the discoverability of Canadian music outside of Canada will suffer. It’s what they at Nettwerk refers to as geofencing. Some people call it geolocking. It’s a phenomenon within a digital streaming service – regional localized success feeds upon itself and ultimately locks an artist into a particular geographical area. Once that artist is locked into a geographical area from a streaming success perspective, it becomes extremely difficult to break that artist out of that geographically defined area.

They see that with some of their Canadian artists. They also have Australian artists. It’s a challenge for Australian artists. In fact, it’s a challenge for any smaller music market from around the world. So, he says, the imposition of a regulatory approach will not only represent interference within the data that they receive, they also ultimately believe it will result in Canadian artists being geofenced within Canada itself. It’s not a particularly viable career path for Canadian artists in a streaming era.

(Geofencing drives a lot of people crazy. Here you have fans willing to listen to an artists music, and the fence basically responds by saying, ‘no, not allowed’. I believe a lot of digital stores have long called this outdated thinking – especially Beatport some years ago. It might make sense to some degree many years ago before the internet era took off, but it ultimately makes no sense now. You can call it geofencing, you can call it geolocking, what I call it is “terrible business practice” in today’s modern digital world. Forcing this in Canada via regulation is basically economic sabotage at the end of the day.)

Senator Manning commented that he noted that approximately 90% of Nettwerk streaming revenue comes from outside of Canada. He also noted that a Quebec artist has approximately 98% of his streaming revenue comes from outside of Canada. Aldous warned of the dangers of locking Canadian artists in their own domestic market when it comes to digital streaming. Will this bill make Canada take the lead in cultural protectionism?

Aldous responded that yes, it does. That is one of their major concerns. Australia and France took a similar run of legislation – both of which were abandoned to his understanding. He doesn’t know the current status of both efforts. Their concern is that – and they have been told by their music business partners is on Canada with respect to this legislation. They fear that the business model that they’ve built in an open world of digital streaming will become segregated and closed off on a regionally and geographically defined basis. It will become increasingly difficult to break artists in to other protected markets around the world.

(This aspect really cannot be emphasized enough. A number of supporters of the legislation seem to shrug off these concerns like it’s nothing and that if it worked in the physical world, then it will work in the digital world. The truth in the matter is that businesses have been growing and expanding thanks to access to other markets. Other markets do access ours, but as a result, the cultural world really becomes a much more enriching place. My taste in music has become increasingly international as a result of this open world market and I feel like I’ve become enriched as a person because of it. If I continued my career as a music artist, I could really incorporate my own blend of content and create new music as a result of that. It’s a really exciting world as a Canadian music artist today because of this. We really stand to lose a heck of a lot if we go back down this path of physical borders. Some of these bill c-11 supporters seem to just be sleepwalking their way to this financial ruin. Once everyone goes full protectionist, it’s basically game over for a lot of creators.)

Senator Julie Miville-Dechene directed her question to Aldous. She says that she seems to have heard him say that the CRTC was going to intervene in the algorithms. So, if they go to the bill itself, there is quite a clear section of the bill to the effect that the CRTC is not authorized to use a computer algorithm or source code. So, it is up to the different actors who can choose the means of what action can be taken to recommend Canadian content. Is this what he said that algorithms would be manipulated or did she misunderstand?

Aldous responded that no, she did not misunderstand. Their concern, which they share with DiMA, is with the specific language of the legislation which says that The Commission (CRTC) shall not make an order that requires the use of a specific algorithm or source code. While they appreciate that, they don’t think that goes far enough. They think there should be a sub-provision added that prevents the CRTC from interfering with algorithmic decision making. So, a sub-section could say that the CRTC shall not require changes, nor the use of undertakings, with respect to algorithms or source code. They believe that is different than simply saying that The Commission cannot mandate the use of a specific algorithm or source code. So, it’s the imposition of a specific source code over the imposition of an overall interference of an algorithm on a digital service provider. They feel that is a very important distinction.

Senator Miville-Dechene asked how their version would be better than the one here. (I thought he explained that quite thoroughly, but OK.)

Aldous responded that it would take it a step beyond what is there right now. It’s saying not only can the regulator not impose a specific algorithm that was designed by the regulator, but also prevent the regulator from forcing digital streaming services to manipulate their own algorithm to a particular end that’s dictated by the regulator. It’s the difference between handing digital streaming services the engine that is built versus getting under the hood and manipulating the engine that the digital streaming services have already built.

Senator Miville-Dechene commented that it’s a much larger article that they are proposing because it means that the platforms cannot use its algorithms to obtain the results, that’s what he wants to prevent. This is obviously part of the bill in that the government wants Canadian content to be discoverable. That’s what he doesn’t want if she understands correctly.

Aldous responded that it’s not that they don’t want it. They think there are plenty of tools within the digital streaming services today that (interrupted)

Senator Miville-Dechene asked like what?

Aldous responded that algorithmic discovery is only one form of discovery on digital streaming services. There’s what’s called organic discovery which is the sharing of music amongst users as well as the creation of playlists and the sharing of their own playlists. Then, there is editorial playlisting which is human based editorial curated playlists on digital streaming services that allow for the highlighting and showcasing of Canadian talent. They believe their partners at Apple and Spotify Music and Amazon do a great job of that curatorial approach. So, there are other tools at the disposal of the digital streaming platforms that do not involve algorithmic manipulation. They think that those tools are more than sufficient to support Canadian content and Canadian discoverability on those platforms.

It is from his understanding, certainly from Spotify’s testimony, that they are more than willing to support that and support Canadian content discoverability through curatorial showcasing.

Senator Karen Sorensen commented that she thinks she heard that cancon rules drive Canadian artists to American regimes. Is the geofencing what he meant by that?

Aldous responded that this is correct. Artists and their management would look at a geofenced Canadian music economy and say that they can’t have an international career if they look at a geofenced market that’s protected.

Senator Sorensen then asked if they think that this bill in its current form have any benefits for Canadian creators.

Heibing responded that they don’t think that they are in the same circles at all. Their situation is so different from an international situation. They don’t have managers wondering if they should move to the US. These are all concerns outside of what their industry would have. They are so set back by discoverability and limited tools that they often have the impression that they will lose – it’s not a defeatist attitude, but it’s an attitude that maybe we need to have better means for themselves. They don’t have data on their own artists, so they really can’t answer the question that isn’t an answer. It’s not a lack of will, it’s just that they are not equipped to do this.

(This has been such a bizarre position. There’s so much of an attitude of “I can’t”. At the same time, they want to conduct business at such a microscopic level, yet be rewarded because regulation makes it so. If you want to, so badly, operate business in such a small niche, then you have to understand the limitations of those niches. If it doesn’t adequately support your business, then you adapt to survive. It’s like there’s this expectation that the world revolves around them and that the world must conform to how they handle business no matter how poorly it may be. I don’t really understand how you expect sympathy when business is conducted like that.)

Aldous responded that we’ve been so focused on the challenges of the bill, its difficult to change the lens of his analysis that these elements are positive. They appreciate the intention and the spirit of the bill. Nettwerk fully supports anything that helps the Canadian music industry. There are undoubtedly elements of this bill that will do that. They can’t speak to those because they have been so focused on the portions of the bill that they view as a challenge.

Senator Leo Housakos commented that there is a problem that seems to be reoccurring. He’s been hearing it from many witnesses. He’s been hearing it from many stakeholders. That’s algorithmic manipulation. He never knew what an algorithm was until the study of this bill. The more he dives into it, the more scary it gets. At the end of the day, algorithmic manipulation determines what one sees at the end of the day. That’s clearly the case. In this particular bill, they have a government that has gone above and beyond trying to assure everyone that it’s not about algorithmic manipulation. They said the bill does not do that. It does not give the power to some dark nefarious force that will determine these things.

Yet, he says, they have many stakeholders that support the bill say that we need exactly that to support Canadian culture. So, we can’t suck and blow at the same time (is that a Spaceballs reference?). Either the government is right and this bill does not allow for algorithmic manipulation or the Chairman of the CRTC that came and testified before them is right when he said that the bill doesn’t give him the ability to do it, but it gives him the authority to force platforms to do it.

To him, it has created a lot of uncertainty and discomfort for both Canadians who use these platforms for information – especially young Canadian’s like his kids generation – and others who use this for news and entertainment. It seems that this is the centre of their universe. Can the panel talk to them vise-a-vise algorithmic manipulation. Do they feel the bill does do algorithmic manipulation or not? Is this a good thing or a bad thing?

Heibing responded that before working in the music industry, she worked in a highly competitive economic business. What is always remarkable to her is that the government and the CRTC is always late in the technological world. When you want to manipulate an algorithm, there are always those who are more advanced than you. So, their advice is imposing a result, imposing a requirement, rather than a means, to impose a quota for a result that you want to obtain to allow the platforms that are highly rich and highly developed to find a solution and reach the quotas.

Aldous responded that all they can do is go by what the CRTC chair has said which is to say that there does appear to be a pathway to the manipulation of algorithms in this proposed bill. He believes it has to do with the distinct language that DiMA has pointed out in their testimony as well as their friends at Spotify.

He further comments that to answer the question of whether it’s a good thing for government to manipulate algorithms in a private enterprise, they don’t think it is. They think that the platforms, as constituted, are working. They are certainly working for many Canadian creators, themselves included, and they believe that an open system without manipulation from government is the appropriate form of commerce and pursuit in this area. Obviously, they wouldn’t be there if there wasn’t a concern about that issue specifically.

Senator Yuen Pau Woo commented that Aldous gave them the impression that there could be geofencing and that it’s either one or the other. However, he says he doesn’t understand because bits and bytes don’t recognize borders in a digital context. Why does a piece of music, particularly a piece of music from their portfolio does not want to be identified as Canadian in the first place. Why would that preclude what scene that music is best suited? He then makes a European Football (for American’s, soccer) reference about Manchester being a global phenomenon despite being a very local team. So, he wants him to help Senators understand the dichotomy of scenes and geography.

Aldous responded that he’s not sure if it was his intent to draw such a distinction between scenes and geography. Canadian artists can absolutely function within a global scene. They can thrive both locally in the Canadian market and on a global scale. It’s not so much that it’s one or the other, it’s an imposition on listening habits. It creates this in a geographic area early on with an artists career. Well, then concentrate that geographical listening habit over time and that will appear, in their experience, to the streaming services as a lack of global relevance beyond that geographical area. So, if you are creating a microcosm of a musical community or a musical scene within a geographically defined area, that tends to build on itself and feed on itself to the point where it becomes increasingly difficult to engage listeners outside that geographic area.

He then said that they absolutely don’t think that there is any inconsistency with a thriving Canadian music economy with Canadian artists who do identify as Canadian, but who engage in a scenes based approach that is a global approach. so, if you take a scene like indie-folk, well, you are going to have indie-folk fans all around the world with specific creative input within that scene that is distinctive and within that geographic origin. So, there’s definitely room and a need for Canadian voices in a scenes based global economy. He cites an indigenous Haida woman from BC where 90% of her listeners engage from outside of Canada. this is a scene where she brings a unique voice to the scene that she is engaged in.

So, he comments, he doesn’t see that as an inconsistency. He sees it as a danger of putting up a geographic fence that prevents Canadian artists from engaging in a global scene.

Senator Woo responded that there is no necessity for that fence to be built. There’s no reason why an algorithm might not classify a piece of music as both Canadian and part of the indie-folk scene and allow it to thrive in both domains.

Aldous responded seemingly with a hint of frustration (I don’t blame him for that. This has been explained multiple times already) that there is nothing wrong with classifying something as Canadian. It’s a question of whether you are imposing a cancon style of regulation on that that there has to be a certain amount of that that has to be discoverable within a streaming service. That is what he believes will result in a geofencing phenomenon.

Senator Bernadetta Clemente commented that she hears Aldous say that Canadians are benefiting from the current context. She then wondered if he could speak to the emerging artists that we can be concerned about. Those who face barriers. They are outstanding and excellent, but because of societal issues, they face barriers. She asked if he could comment on that. Also, she asked how he would amend Bill C-11 to address his concerns about algorithmic manipulation.

(I’m confused at this point because I thought the latter question was actually answered earlier already.)

Aldous responded that in terms of artists who face barriers who face challenges in meeting a global music market in a flat digital world, again, he believes in a bottom up approach as opposed to a top down approach if the government wants to assist those who deservedly want to have their voices heard. The best approach is to support those artists in a developmental level and their ability to make excellent music have access to excellent producers and well funded and well run music companies in Canada that can take them to that global market.

Certainly, he says, there are artists within that flat digital world, there are communities that are shared amongst the platforms that will start that process. What typically happens is you see an artist started to develop within an online community and, at some point, that hits the radar of a company like Nettwerk and they approach that artist to start elevating them to the next level. It’s not so much regulating the discoverability of that content. It’s about supporting those artists at the development level to allow them to put them in a position where that music is being discovered. He thinks that’s an important distinction that was highlighted well in another organizations testimony.

In terms of how they would change Bill C-11, he believes he already touched on that (I thought he did too). He wants it to be made explicit that it’s not open for the CRTC to manipulate the algorithms of the digital music providers. That is, at the core, what they are really talking about. As he mentioned in his opening presentation, he shared many of the views expressed by Spotify in terms of if there is the CRTC viewing, or taking a position, on digital streaming service providers, that there should be specific criteria that it must consider before regulating music streaming services. They don’t see that in this legislation. They believe that Canadian consumers should get options while retaining control of their listening experience.

Finally, he says, the whole concept of Canadian content needs to be updated and related obligations should reflect audio streaming models rather than an old terrestrial radio model which is what they believe is what the current legislation reflects.

Senator Housakos commented that it seems to him that emerging artists currently don’t face any barriers online with the platforms that are currently available. Does Aldous agree with that statement? With C-11, would they face any barriers?

Aldous responded that in a flat digital world, the barriers artists face is not getting onto the platform, it’s cutting through the noise and being heard. That is everyone’s challenge within a flat digital world (100% agree. Being heard these days with all the other noise can very easily be a tough nut to crack.)

He thinks that C-11, where it will hurt them is that they are looking to find success outside of the borders of the country if they become geofenced within the development process. They believe that a cancon style regulatory regime which, let’s face it, cancon did many wonderful things for artists, but it was designed for artists that fit in with a commercial radio format. It worked very well for those artists, but that’s never been the focus of Nettwerk. They were always interested that did well outside of those formats.

He further commented that imposing that regulatory approach on emerging artists, he doesn’t think, will help them in the long run. There may be some mid-term benefit that allows you to have some discoverability within Canada, but that comes with a two edged sword in terms of an artists long term viability.

With that, the hearing adjourned.

Concluding Thoughts

First of all, when I saw Nettwerk’s name crop up in the witness list, I was actually intrigued with what they may have to say. Back in the mid-2000’s, they had the Save the Music Fan campaign in response to the then-called CRIA was trying to bring mass file-sharing lawsuits into Canada (something that mercifully didn’t really materialize – at least to the degree that it ramped up in the US). They were very clear at the time that file-sharing lawsuits are counter-productive because you are basically suing your own customers in the end. So, they’ve always had that forward looking thinking for well over a decade to my knowledge. As a result, I had a huge amount of respect to that record label.

During this hearing, they really didn’t disappoint. Sure, the representative may have been very careful with his wording throughout the Question and Answer period, but all of the points he made were very much spot on that I could tell. It was interesting to hear how the label more or less mirrored the concerns of digital first creators, but ultimately adapted to his particular business model. Sure, the word “adapted” might have been the product of the schedule timing which is obviously outside of Nettwerk’s control, but hearing those similar concerns was quite striking and worth considering nevertheless.

Another point worth bringing up is the fact that you see that echo of what digital first creators are saying. They also basically called for the bottom up approach rather than that top down approach. Rather than forcing platforms to show certain kinds of content, wouldn’t it be better to invest in these creators so that they have all the tools and opportunity to succeed today? This is a sentiment that I certainly share. If we are demanding payments from these platforms to go into a fund, then distribute that funding to the very creators (such as myself) who use these platforms in the first place.

I certainly still have some reservations of taxing these platforms in that way given the potential loss in revenue for creators across the board (that money has to come from somewhere, after all), but if that money is ultimately getting redirected to creators who are trying to get a leg up on things and need a small cash infusion to provide that necessary nudge into the open, then that is probably the best way to handle such a concept.

Probably where this hearing did fall short a little bit was the seemingly repeated questions from some of the senators. Nettwerk was basically asked several times about his reaction to the algorithm provisions and Section 4.2. Each time, as far as I could tell, he answered those questions quite clearly. I could even tell that, after a while, he was growing a bit annoyed that he was basically being asked the same question several times, so, I really think that was on the senators part. As a result, it seemed like most of the time was spent on Nettwerk.

As for the other witnesses, I could really get the sense from the few answers that was provided that what they were ultimately asking for is to be able to conduct business as usual and have legislation force platforms to reward them for it. I really got that catch-22 of what they are demanding.

On the one hand, they are demanding discoverability requirements and financial windfalls from these platforms, but at the same time, they don’t really want to be bothered with all that razzle dazzle of marketing, understanding how these platforms, or even, at times, bother with posting their work. What they are seemingly after is they want all of the reward and do none of the risk or work as a result.

On the other hand, they kept saying that they don’t have the knowledge or the capabilities, or even motivation, of tackling this issue of getting their work onto these platforms and getting their visibility up. It’s like they want the legislation to do all that work for them which is a ridiculous ask. So, if you aren’t wanting to really go out and have an international audience and, instead, want to focus on such a smaller more geographical and less “techy” approach, then what makes you think that the platforms somehow owe them money or visibility?

Either you want to put in the time and effort of making an online presence or you don’t. That decision ultimately rests on these companies. If they don’t want to put forth the time and effort and feel that this doesn’t fit their business model, fine. It just makes it, in my view, impossible to complain you aren’t being heard on these platforms. I consider it ridiculous that anyone expects legislation to basically conduct business for them so they can just sit back and reap the rewards with little to no effort.

So, an interesting hearing that brings in the perspective of a Canadian record label and their perspective on both the legislation and how they see the internet works.

Drew Wilson on Twitter: @icecube85 and Facebook.

3 Trackbacks and Pingbacks

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: