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Tag archive: Economic Club of Canada (10)

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Graham Henderson releases Music Canada’s Closing the Value Gap report at the Economic Club of Canada

On June 26, in front of a sold out audience at the Economic Club of Canada, Music Canada President and CEO Graham Henderson delivered a keynote address to launch our latest report Closing the Value Gap: How to Fix Safe Harbours & Save the Creative Middle Class.

Henderson’s message was clear – the creative middle class is being eliminated by outdated copyright laws. His speech can be viewed on the Economic Club’s Facebook page.

In his speech, Henderson shared some of the startling new economic evidence in the report which details the scope of harm done, and confirms that the Value Gap in Canada continues to grow.  

In a series of studies, Dr. George Barker, Visiting Fellow, London School of Economics, and Honorary Associate Professor, Australian National University, has documented that the Value Gap in Canada is significantly larger than previously understood, and that it continues to widen.

Dr. Barker distilled his findings to three key measures:

  • $19.3 billion – the cumulative Canadian recorded music Value Gap over 20 years since 1997
  • $1.6 billion – the music industry Value Gap in Canada in 2017 alone
  • $82 million – the average annual increase in the music industry Value Gap in Canada between 1997 and 2017

After his speech, Henderson was joined on stage by the MP for Toronto-Danforth and Chair of the Standing Committee on Canadian Heritage Julie Dabrusin. As Chair of the Committee, Dabrusin recently released a report, Shifting Paradigms, that recommended to the government a series of actions that would help artists and the creative industries.  Henderson called the report, “a guide to fix the Internet.”

Dabrusin credited artists testimony at the Heritage Committee for the report’s recommendations, and cited Miranda Mulholland’s personal account of how Value Gap has affected her career as a catalyst for her careful consideration of these issues. 

“I think we should give a bit of a shout out to Miranda Mulholland,” said Dabrusin. “… She spoke very, very forcefully about the value gap and where it was most forceful was that it brought up her personal journey, the stories of other artists who she knew. So it wasn’t just a dry, matter of fact on a piece of paper anymore. It was hearing the actual impact that was happening in our communities and young people’s lives. And that was the first time that perhaps I’d even twigged a bit more carefully to those issues.”

Dabrusin also encouraged everyone in the music industry to continue to work together when dealing with the Federal government noting that for the Copyright Act Review, almost all music stakeholders came forward with the music priorities to address the Value Gap. 

Following the event, Henderson has spoken about the urgent need to close the Value Gap in a number of media appearances, including BNN Bloomberg, CP24, the Toronto Sun, and the Wire Report.

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Miranda Mulholland brings crucial message to Ottawa in ‘Redefining Success in a Digital Marketplace’ speech

On Nov. 22, Miranda Mulholland brought an important and timely message to Ottawa as she delivered a keynote speech at the Economic Club of Canada. In addition to her credentials as a talented artist and entrepreneur, Mulholland has emerged as a trailblazer in the global artists’ rights movement: in May, she became the first creator to deliver a keynote address at the Economic Club of Canada, and recently spearheaded a letter co-signed by 100 fellow artists on recommendations for a reformed Copyright Board of Canada.

Mulholland’s keynote topic was “Redefining Success in a Digital Marketplace.” Her speech highlighted the challenges for artists working in today’s digital age and proposed solutions to help create a more balanced music ecosystem in which creators can earn a living.

Mulholland’s speech was followed by a panel discussion with representatives from different cultural industries, who discussed how the digital marketplace has affected their industries and their individual careers. The panel, which was moderated by Vassy Kapelos, Global National’s Ottawa Bureau Chief and host of The West Block, included:

Video of the keynote and panel is now available online, and embedded below. The event was attended by many artists and Ottawa music industry members, as well as MPs Gord Brown, Julie Dabrusin, and Pierre Nantel, who are members of the All Party Music Caucus. A selection of photos and social media posts from event is included at the end of this post.

Mulholland began by observing “an extremely important anniversary in the lives of all creators” – the date the Copyright Modernization Act came into force, just over 5 years ago. Although Mulholland referred to the Act as a “landmark”, she acknowledged that it wasn’t perfect and “probably created as many problems for creators as it solved.” Fortunately, the legislation included a specific provision that mandates a review of the Act, 5 years to the day that it came into force. Unfortunately, that date passed two weeks ago, and creators are still waiting for the review to begin.

“I find this disappointing,” said Mulholland. She then spoke about her path to advocacy, referencing two conversations with Heritage Minister Mélanie Joly, who told her “artists need to speak up” in the government’s “Canadian Content in a Digital World” consultations. Those conversations led directly to the founding of Focus On Creators, a coalition of more than 3,500 Canadian creators asking the government to put creators at the heart of future policy. Speaking of her previous speech at the Economic Club, Mulholland thanked MP Julie Dabrusin for raising some of the issues her keynote addressed in a meeting of the Standing Committee on Canadian Heritage. After noting that she is aware of the government’s increased funding for grants and export, Mulholland reiterated her call for a market that properly values their work: “the main message of creators, and what we’re trying to say, is that we want a functioning marketplace right here at home. We are here, and we’re speaking up. We’d love to be heard.”

After a brief recap of her artistic bona fides – violin training since age 4; studying Opera Performance at Western and McGill Universities; founding a record label and festival; performing as a member of Harrow Fair, Great Lake Swimmers, and performing on hundreds of recordings by artists such as Cowboy Junkies, Donovan Woods and Rose Cousins, as well as film & television work including CBC’s Republic of Doyle and the film Maudie; a member of the Soulpepper Theatre Company and the Board of Governors of Massey/Roy Thomson Hall – Mulholland acknowledged that she has a serious problem: “My problem is that because of this Broken Promise of a Golden Age, I’m barely able to make a living.”

Mulholland explained that when sharing her concerns with policymakers, the response that she is often given “is that creators are asking for the clock to be turned back… but that is not what we want. However, we do need to look back at the policies and promises that were made in the late 90s, and recognize that times have changed. My MySpace page doesn’t work anymore. If anything, we’d like to turn the clock forward and rethink some of these ideas and assumptions that have turned out to be false and predictions that have sadly not come to pass.”

After outlining some of the challenges that today’s artists face, including financial hardship and an increasing number of middlemen involved in distributing her music and collecting revenues, Mulholland pivoted from the solution often offered to creators expressing their concerns (“adapt”) to a key theme of her speech: Accountability.

“Let’s look at the current situation and who is accountable for the devaluation to which we are forced to adapt,” said Mulholland. “Accountability means acknowledging value and compensating for it.”

Mulholland called for accountability from digital services like YouTube, and showed why the often-proposed solution of live touring is not a panacea, or even feasible for many artists. Turning to solutions, Mulholland referred a pamphlet distributed with advocacy infographics, which are available on her website. Explaining that we all have a role to play in improving the music ecosystem, Mulholland identified steps that artists, consumers, industry members, and government can take to help ameliorate the current situation.

Mulholland urged the government to end tech company safe harbours: “The European Commission has now acknowledged that the market isn’t functioning properly, and they have identified and accepted the problem as the unintended Value Gap, and agreed that legal clarification is needed. Can we follow suit?”

She also called on the government to end other industry cross-subsidies, such as the Radio Royalty Exemption, “an industry cross-subsidy given to every commercial radio station in Canada, exempting them from paying more than $100 in royalties to artists and record labels on their first $1.25 million in advertising revenue,” said Mulholland. “The Exemption was introduced as a political compromise in the 1997 amendments to the Copyright Act, but it is now outdated and unjustified – if it ever was justified. It is really not right that artists and labels continue to subsidize these large media companies. I am subsidizing Bell.”

Mulholland then highlighted that due to the definition of sound recordings in the Copyright Act, recorded music is actually not considered a ‘sound recording’ (and thus not entitled to royalties) when it is included in a TV or film soundtrack. “This affects me greatly,” said Mulholland, “because for example, even though I played on almost every episode of CBC’s Republic of Doyle, which is now syndicated worldwide, I only received the one-time union rate I got per session, which was around $280, while the composer collects residuals every time that show airs. 44 countries around the world – the UK, France and Australia among them – afford performers and record labels the right to receive public performance royalties when their sound recordings are used as a part of a soundtrack in TV and film.”

Mulholland closed by stating “a culture of permission-less innovation” is what led to the current situation. With that, she referenced another anniversary – the two hundredth anniversary of Frankenstein. “Mary Shelley wrote this classic after witnessing the disastrous consequences of her industrial revolution,” said Mulholland. “The moral of her story is that monsters are created when the only question being asked is ‘Can I?’

We know what’s it has done to the livelihood of creators – it’s produced the Value Gap, and that is our monster.”

 

Had an amazing time at the Economic Club of Canada panel talking about the music business and what is means to be an…

Posted by Jessica Pearson and the East Wind on Wednesday, November 22, 2017

I had the wonderful opportunity of seeing Miranda Mulholland present this speech yesterday at the Economic Club of…

Posted by Maddy O'Regan on Thursday, November 23, 2017

https://www.facebook.com/CodyCoyoteMusic/photos/a.800580609984552.1073741825.103537669688853/1879309895444946/?type=3

Feeling empowered after gaining some knowledge from a very introspective panel discussion on the music industry and…

Posted by Kimberly Sunstrum on Wednesday, November 22, 2017

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Miranda Mulholland to deliver keynote speech on ‘Redefining Success in a Digital Marketplace’ in Ottawa

On November 22nd, artist and entrepreneur Miranda Mulholland will deliver a keynote on “Redefining Success in a Digital Marketplace” at an Economic Club of Canada event at the Westin Ottawa.

The event description reads:

“Music unites us, bridges linguistic, cultural and income divides. Music heals. It connects. It provides a soundtrack to our greatest struggles and our highest triumphs.

Since the arrival of the digital age, music is more readily created, released and shared. It is available at our fingertips and it’s reaching more people than ever before.

With music’s intrinsic value in our lives and this new accessibility, one would expect that the people who create this unifying force would be thriving. There is a widely held perception that the advent of the digital revolution has enhanced how music is created, money is made and creators’ lives are lived. There is a perception of a level playing field. But it’s time for a reality check.

Join Artist and Entrepreneur, Miranda Mulholland as she talks about the creative process, reveals actual numbers, discusses how creators are faring in this new landscape and suggests a way forward.”

Following Mulholland’s speech, a panel of creators and representatives from various cultural industries will discuss how the digital marketplace has affected their industry and their own careers. The panel will include:

  • Alan Frew – Songwriter, Public Speaker & Author
  • Ari Posner – Film & Television Composer
  • Roanie Levy – President & CEO, Access Copyright

This will be the second time Mulholland addresses the Economic Club, following her speech in Toronto in May 2017. Her powerful and honest speech resonated with the crowd, earning her a standing ovation and social media praise by many of the artists in the room. That speech was covered by the Globe and Mail’s Kate Taylor, in an insightful column titled “What happens when we starve our artists.”

In addition to shining a light on the reality that artists face in the digital age, Mulholland has presented actions that government, artists, the music industry, and music fans can take to help improve the situation for creators. The Advocacy section of Mulholland’s website includes graphics outlining steps each group can take to improve the music ecosystem. Mulholland also rallied 100 of her fellow creators to sign a letter on the importance on reforming the Copyright Board of Canada. In recognition of her outstanding advocacy efforts to improve the livelihoods of music creators, Mulholland was presented with the inaugural Music Canada Artist Advocate Award at Playback 2017.

Music Canada is proud to co-sponsor this event. Tickets to Mulholland’s November 22nd speech in Ottawa are on sale now via the Economic Club of Canada website.

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Miranda Mulholland lays the reality for creators in the digital age bare at the Economic Club of Canada

On May 24,  Miranda Mulholland became the first musician to deliver a keynote address to the Economic Club of Canada. Her speech, titled ‘Redefining Success in a Digital Marketplace,’ drew on her years of experience as a musician, label owner and entrepreneur to shed light on the reality artists face in the digital age. In her speech, she also identified actions that government, the music industry and music fans can take to help bring balance to the world in which creators live.

The room had a large contingent of artists, including Scott Helman, Alx Veliz, Royal Wood, Tona Tencreddi, Bandana Singh, Ammoye, Amanda Martinez, Zeno Calini, Kanwar Anit Singh Saini, QuiQue Escamilla, Eliana Cuevas, Sarah Thawer, Justin Rutledge, Brenley MacEachern, Lisa MacIsaac, Bradley Thachuk, Monica Pearce, Damhnait Doyle, Suzie Ungerleider, Emma Barnett, Andrew Penner, Jennifer Bryan, Sally Shaar and Jordan Circosta.

There were also representatives from the municipal, provincial and federal governments, as well as music industry groups MusiCounts, Re:Sound, The Canadian Federation of Musicians, CIMA, Music Ontario, The Ontario Media Development Corporation (OMDC), SOCAN, The Canadian Country Music Association, The Corporation of Massey Hall & Roy Thomson Hall, and record labels Sony Music, Universal Music and Warner Music.

Miranda was introduced by Toronto City Councillor Josh Colle, who chairs the Toronto Music Advisory Council on which Miranda also serves. Colle commented that musicians are often entrepreneurs, and in many cases, small businesses and that nobody is an embodiment of that more than Miranda Mulholland. He commented that artists should be supported by the City in the same way as other small businesses.

“As entrepreneurs and small businesses, I think it’s incumbent on all of us to want to see that they’re successful,” said Colle. “The same way we might put money or resources or time into helping other sectors and other small businesses, we should think of that the same way as our musicians and artists, who live in a city that’s increasingly expensive and difficult to find a place to live.”

The overarching theme of Miranda’s speech was accountability, and she pointed to a number of ways that digital music services eschew accountability to the music creators who make all of the content off which they profit.

“Picture each shiny new streaming platform as a shop window,” said Miranda. “Our content – at fire sale prices – fills their shop window, giving them credibility while creators of this content are asked to do the advertising. They give us – the creators – lists of ‘Best Practices’ to get more of our hard won fans to use their services. If we are not getting on playlists then it is our fault for not engaging with our fans enough.”

She was particularly critical of YouTube’s claims that it is merely a passive service, and as such, should be free from liability for the content that appears on the site.

“YouTube says – ‘it isn’t our fault – we are just the shop window. We didn’t put the items in the window, so we are not accountable for them. We are a passive intermediary. We are not liable for this massive copyright infringement.’ But – once again – wait. A top brass at Google just bragged that ‘80% of all watch time is recommended by YouTube.’ He explained that ‘Everybody thinks that all the music that’s being listened to and watched is by search.’  But it isn’t, and in his words, ‘that’s a really important and powerful thing.’ This means that YouTube actively directs consumers. This doesn’t seem all that passive to me. Zero accountability.”

Miranda went on describe the ways in which we can correct the situation faced by artists, saying “We all have a role to play as artists, as consumers, as industry and as government.”

For artists, Miranda encouraged them to be honest about their lifestyle, protect their intellectual property, support robust copyright laws and to pay back into the music ecosystem by championing young talent.

She encouraged music fans to be tastemakers, to create playlists of their favourite music, and to write reviews and rate albums and songs, actions which help shift algorithms in favour of artists. She also encouraged fans to buy albums on their release days, another action which can help to drive albums to front pages of music services. Buying band merchandise was mentioned as a great way to support artists. She also encouraged music fans to subscribe to a streaming service, as the subscription model delivers a much better return to artists than ad-supported streaming.

As for government, Miranda pointed to the elimination of “safe harbour” laws, which provide tech companies with immunity from copyright infringement liability. In Canada, she pointed to eliminating industry cross-subsidies that shift wealth away from music creators, and used the radio royalty exemption as an example, an exemption in place since 1997 that excuses radio stations from paying more than $100 in royalties to artists and record labels on their first $1.25 million in advertising revenue.

Miranda’s heartfelt speech had a visible impact on guests, who gave her an extended standing ovation.

Miranda’s speech was followed by a Q&A discussion with Kate Taylor, author, film critic and arts columnist at The Globe and Mail.

You can view the full event video via the live stream archive on our Facebook page.

Below is a selection of tweets from the event:

https://twitter.com/ScottHelman/status/867595308364161025

(Swipe left) Such an eventful meeting this morning with #EconomicclubofCanada redefining success in a digital market place. Pic’d here with Former Member of #parliament #AndrewCash who personality invited us as well as #JenniferHardy #GeneralManagerofOperations at #MusicCanada and #AmyTerrill #ExecutiveVicePresident also at Music Canada and #TracyJenkins of #LulaMusic & #ArtsCentre/LulaWorld who booked me for my #CityHallLive performance on Monday May29th!!! Inside @lulalounge @lulaworldfest!!! And our honoured guest speaker fellow entrepreneur and artist #mirandamulholland!!!! So informative And impactful was this speech and meeting!!! #changeascome #changeisgood #independentartist movement!!!! #toronto #Canada #reggaemusictotheworld #Lightworker #musicismylife #Andsoitis #makingmoves #Artistonamission to create #change!!! #DontCountMeOut Creating our own opportunities!!!!

A post shared by Ammoye💫 (@ammoye) on

Goosebumps!!! The incredibly articulate Miranda Mulholland delivers a thoroughly researched, beautifully written, MUCH…

Posted by Sarah Slean on Thursday, May 25, 2017

 

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Miranda Mulholland to address the Economic Club of Canada on ‘Redefining Success in a Digital Marketplace’

On Wednesday, May 24, singer, songwriter, violinist, label owner and music festival organizer Miranda Mulholland will address the Economic Club of Canada on the reality for music entrepreneurs in the digital age.

Below is the event description:

Music unites us, bridges linguistic, cultural and income divides. Music heals. It connects. It provides a soundtrack to our greatest struggles and our highest triumphs.

Since the arrival of the digital age, music is more readily created, released and shared. It is available at our fingertips and it’s reaching more people than ever before.

With music’s intrinsic value in our lives and this new accessibility, one would expect that the people who create this unifying force would be thriving.

There is a widely held perception that the advent of the digital revolution has enhanced how music is created, money is made and creators’ lives are lived. There is a perception of a level playing field.

But it’s time for a reality check.

Join Artist and Entrepreneur, Miranda Mulholland as she talks about the creative process, reveals actual numbers, discusses how creators are faring in this new landscape and suggests a way forward.

The event runs from 11:30am – 1:30pm at the Toronto Marriott Eaton Centre (525 Bay Street). Lunch will be served. Tickets are available for purchase on the Economic Club of Canada’s website.

Miranda’s speech will be followed by a question and answer discussion with Kate Taylor, author, film critic and arts columnist at The Globe and Mail.

On November 1, 2016, Miranda shared her incredibly pertinent experiences as an artist entrepreneur operating in the digital age during her closing remarks at a speech delivered by Music Canada’s President and CEO, Graham Henderson, titled The Broken Promise of a Golden Age: How creators underwrote a tech revolution and were betrayed. Miranda’s remarks were so powerful they inspired the Economic Club of Canada to invite her back to headline her own event.

Be sure to get your tickets early, as this is sure to be a timely and impactful event!

VIDEO: Miranda Mulholland’s closing remarks at Graham Henderson’s speech to the Economic Club of Canada on Nov. 1, 2016

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Music Canada’s Graham Henderson discusses his Economic Club speech and Focus On Creators on Canadian Musician Radio

Music Canada’s President and CEO, Graham Henderson, was recently interviewed by Canadian Musician’s Michael Raine for the Canadian Musician Radio podcast. Graham and Michael began by discussing Graham’s November 1 speech to the Economic Club of Canada, in which he gave an impassioned defence of creators’ rights. The conversation then flowed to the Focus On Creators initiative, which launched on November 29 with a joint letter to Canadian Heritage Minister Mélanie Joly signed by nearly 1,100 musicians, authors, playwrights, poets, songwriters and other creators, urging the government to put creators at the heart of future policy.

A common theme of both Graham’s speech and Focus On Creators is that our government must act to restore a fair and balanced working environment for creators before full-time creativity becomes a thing of the past.

“We are out of our enabling phase. We’ve enabled this new digital marketplace,” said Graham. “Very clearly, we created market distortions we didn’t intend, and now we are going to play the role, the government, will play the role of a leveler. We are going to restore balance.”

Graham spoke of the widespread support behind Focus On Creators from high profile Canadian artists and creators, but stressed the significance of the younger generation of artists who have added their names to the joint letter.

“What is just as important is the young artists. They’re signing up in droves because they’re the ones for whom this promise evaporated,” said Graham. “Our new generations of musicians are digital natives. There’s almost nothing about that environment they don’t know and they don’t understand…The problem is, they do it all, and they don’t get paid properly. They can’t afford rent. Prominent musicians who’ve had their music on 75 records, who have JUNOs, JUNO nominations, can’t afford rent. Ridiculous!”

The full interview is available on Canadian Musician Radio’s website. Graham’s interview begins at the 22:50 mark.

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The Rambler by Graham Henderson: The Broken Promise Of A Golden Age – How Creators Underwrote A Tech Revolution And Were Betrayed

Graham_headphones3Blog ThumbnailThe Rambler is a column by Graham Henderson, President of Music Canada. Graham writes from time to time about developments in the music industry, new trends or just about music! Let’s face it, Graham has been around for a long time and has a lot to ramble on about.

This is the text of a speech I delivered to a sold out crowd at the Econonmic Club of Canada on the 1st of November 2016.  It is much longer than my usual posts, but then the issues at stake are in some respects deserving of the additional words.

This is also an edited and expanded version with sources for quotes and references included.

The Economic Club of Canada, which is where I spoke, has earned the prestigious reputation as Canada’s “National Podium of Record”. In the last two years the ECofC has welcomed reputable names such as Ontario Premier Kathleen Wynne, Canadian Heritage Minister Melanie Joly, Toronto Mayor John Tory, Ontario Finance Minister Charles Sousa and the Chair of President Obama’s Global Development Council Mohamed El-Erian. The ECof C mission is to “educate, inspire new ideas and connect our members with the most influential leaders of our time.”  Having been offered an opportunity to address the Club on cultural issues at a critical juncture in the history of the creative sector was an honour.


Back in 2003, a famous Canadian recording artist had this to say when he was asked about his prospects in the new digital economy: “we are entering a golden age……a golden age.” This was an idea embraced by artists, the media, pundits, professors and most importantly, policy makers around the globe.

The reason for this heady optimism was the seismic events which were then unfolding in the online distribution and consumption of creative content. Peer-to-peer file sharing had become the default way for people to access virtually unlimited music for free, and the iPod had taken mobile digital music into the mainstream.

The artist who praised the unfolding of this golden age believed that the digital era would usher in a utopia for both musicians and the consumer. Artists would gain access on the Internet to a larger audience than ever before, and in return for the collapse of their traditional marketplaces, they would make more money from the sale of concert tickets, merchandise and other means. This was an epic leap of faith with virtually everything riding on one thing – the promise of digital technology.

The passage of time has instructed us that we might have benefited from a judicious skepticism, that we might have done well to have questioned the extraordinary promises and prognostications that were being made at the time. Had we done so, I wonder if the world in which we now live would have the characteristics that it does – a world in which the creative middle class, within the span of a single generation, has virtually ceased to exist.  A world in which artists struggle more than ever before to earn a living wage and put food on the table. As they transition to the world of the self-employed “entrepreneur”, they are working longer hours and are sometimes engaged in activities for which they have little aptitude, such as data entry clerks – all for scandalously less money.

Jaron Lanier is an author, composer, computer scientist and, some say, the father of virtual reality. He is concerned about the challenges facing creators. In a recent edition of the World Intellectual Property Organization’s magazine, Lanier concluded that,

“We have seen an implosion of careers and career opportunities for those who have devoted their lives to cultural expression. … Opportunities are rare compared to the old-fashioned middle-class jobs that existed in great numbers around things like writing, photography, recorded music and many other creative pursuits.”

jaronlanier

Jaron Lanier

Here in Canada, our creators, the people who build our nation’s cultural foundation and much of the intellectual property we export – are struggling, and along with them the people and businesses who support their work are struggling. Well paid jobs with benefits are disappearing and being replaced by precarious employment. Culture today, more than at almost any time in our history, is dependent on the largesse of the government.

One of the most deeply unpleasant aspects of the past 20 years has been the manner in which the gutting of the creative class, and now an entire way of life (think of youth being told they must accept a world of precarious employment), has been presented as an inevitability. At a recent round table, I sat beside a young entrepreneur who was beside himself at the idea that the Minister of Heritage was having hearings on the digital economy. For him it was simply case of the “horse having left the barn.” There was no turning back the clock, and no point belabouring the issue: “This is the world we live in. Get used to it.”

Today I want to question that supposition. The idea that we cannot change the circumstances in which we live seems to be, dismayingly, widely held. I believe this outlook is founded on a sort of market-driven, hyper-capitalism, a debased and absolutist form of economic, technological determinism. Ayn Rand would love this; it is a sort of libertarian fantasy: the market determines how we live our lives and governments need to get out of the way – and that means us, the people. But let’s remember that we live in a social democracy – we live in a place where the people, not corporations, and not plutocrats, get to decide how to order their lives.

We must (and I include our government policy makers here) harness our imaginations. We cannot look at the world and see it only as it is. We have to be able to see it as it might and should be. And frankly, creators are really good at doing that. This was the skill that Percy Bysshe Shelley would have had us all learn.

Creators for centuries have fought and in some cases died to change the worlds in which they lived. Oppressive forms of employment were ameliorated and tyrannical regimes were overthrown. In the case of Canada, an opposition politician named Tommy Douglas, (who famously stated, “Courage, my friends; ’tis not too late to build a better world.”) set out to change the public morality as a method of forcing the government of the day to adopt universal health care – he succeeded.

tommydouglas

Tommy Douglas, leader of the New Democratic Party pictured in 1953.

The people demanded change. People got change because because they decided that they wanted to live in a better world – a world hey were prepared to fight for.

We are inheritors of this great tradition. And we can deploy it to restore the balance. Minister Joly, for example, as part of her cultural consultations, has asked us to think outside the box, to be bold and to think big. Well, one way to do that is to ignore the conventional wisdom that tells us: this is the way it has to be. And that is what I hope to do today.

But first, let’s look at how we in the creative community got to where we are today.

The foundation for most of the rules and regulations which govern our modern digital environment are two treaties adopted by the World Intellectual Property Organization in 1996: The WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.

To help us better appreciate the magnitude of the task the negotiators of those treaties faced, we need to understand what the world looked like at that time. This was a world in which digital technologies – and their adoption by consumers – were in their infancy.

In 1996, less than 1% of the world’s population was online. If you were one of the few, it was via a dial-up modem that delivered websites at the rate of 30 to 60 seconds a page. You searched the 100,000-odd websites using AltaVista or Yahoo – Google wouldn’t launch for another two years.

In 1996, email had yet to surpass the U.S. Postal Service in terms volume of messages delivered. Alanis Morissette’s Jagged Little Pill was the world’s top selling album – though fans were more likely to purchase it from a mail-order club than an online retailer.

After the adoption of the WIPO treaties, it would be a full two and a half years before Napster appeared. It was four and a half years before the introduction of the iPod (2001), six years before the advent of the Blackberry “smartphone”, eight years before the first video was uploaded to YouTube and over a decade before the first song was streamed on Spotify.

The people setting the rules for our world were well-intentioned and clever; but the reality is that they were guessing. Now there is nothing wrong with guessing. We all make educated guesses on which we base our actions.  But the beauty of our world is that with the passage of time and the accumulation of experience, we have the luxury of reassessing our situation, and adapting our behaviours when those first guesses clearly turn out to have been ill-founded. We have now had 20 years of experience with those early WIPO guesses.  How are we doing?

Well, the preambles to these treaties give us an idea of what WIPO wanted to do. The people who drafted the Copyright Treaty, told us that it was designed to:

(1) recognize the profound impact of the development and convergence of information and communication technologies on the creation and use of literary and artistic works,

(2) emphasize the outstanding significance of copyright protection as an incentive for literary and artistic creation, and

(3) recognize the need to maintain a balance between the rights of authors and the larger public interest.

These are laudable goals.  But very clearly everything would come down to the question of balance. If balanced correctly, the new rules would supercharge the digital marketplace – a boon to both creators and the public.

But very quickly, fissures began to appear. Technology advocates and so-called intermediaries argued that in order for the new technological infrastructure to get off the ground, creators were going to have to give up something to get something. What they would give up would be copyright payments that would otherwise have been required under the pre-WIPO rules: exceptions would be created.  In return, creators would benefit from a larger, more diverse marketplace.  So-called “middle men” would disappear.  All manner of economic miracles would take place. It would be win-win.

So when the first major country to implement the WIPO Treaties, the US, did so in 1998, the intermediaries and other technology companies insisted on a quid pro quo:  a series of “safe harbours” from liability.  These safe harbours were codified in the Digital Millennium Copyright Act, and subsequently served as a template to legislators around the world. Almost every exception excused someone from making a payment to a copyright owner that they would otherwise have had to make. But there was also a social quid pro quo that was articulated over and over and over again: creators would be better off.  In my view this amounted to more than a bargain, more than an article of faith: it was a social contract. A bargain which very quickly turned Faustian; a social contract that is now in a shambles.

The French economist Olivier Bomsel was among the first to call this arrangement out for what it was – a massive system of cross-subsidies. By foregoing money otherwise payable to them, the creative community would subsidize the development of the technology infrastructure.

olivierbomsel

Olivier Bomsel

Up to this day, much of the policy-making regarding copyright law continues to be driven by the popular mythology that digital technologies and platforms produce lucrative new opportunities for the creative economy.

Until very recently, however, the hypothesis that digitization and the Internet would unleash a Golden Age for the creative economy had not been adequately put to the test. Music Canada decided to address this information gap by commissioning an independent analysis to measure the impact of digitization on the creative economy.

The author of this study is Dr. George Barker, Director of the Centre for Law and Economics at Australian National University, and currently a visiting fellow at the London School of Economics. His paper examines the data on the effect of digitization and the Internet on among other things, Canadian music industry sales.

The paper seeks answers to the questions:

  • Have digital technologies and the Internet –together with the copyright liability exceptions adopted to spur them — spawned a Golden Age for creative content?”, and
  • Has the need for intellectual property protection fallen in light of these benefits?

The answer to both questions, according to Dr. Barker, is no. His study found that digital technologies and the Internet were associated with sharply reduced demand, prices and sales, and consequently, to lower investment and employment.

The evidence he cites overwhelmingly supports this finding, and here are but two examples from music:

  • Globally, music sales fell about 70% in real terms between 1999 and 2013.
  • In Canada from 1997-2015, music revenues fell to 20 percent of what they would have been had they kept pace with inflation and real GDP growth – a modest expectation, to say the least.  This resulted in a cumulative revenue gap of over 12 and-a-half billion dollars.

Put another way, over 12 and-a-half billion dollars that would have gone to artists and rights holders simply disappeared. Most remarkably, this happened at a time when music consumption rose to record levels.

As music was gaining in value and use to the consumer, its value to the creator was going into sharp decline.

Francis Gurry, the Director General of WIPO, decried this phenomenon in 2013, concluding that the migration of creative works from analog formats and physical distribution to digital technology and internet distribution had been accompanied by an “avoidable and inappropriate loss of value to creators, performers and the creative sector.

Here is the full text:

The past 20 years has witnessed the steady migration of creative works from analogue formats and physical distribution to digital technology and distribution over the Internet. This has been a classic process of creative destruction. It is a normal part of any such process that value shifts. But what has been worrying in the transition from analogue to digital is the seemingly avoidable and inappropriate loss of value to creators, performers and the creative sector. A multiplicity of studies have been undertaken to measure this phenomenon and discussion, if not arguments, abound about methodology and magnitude. What is clear, however, is that the impact of illegal downloading is significant and negative. While the value of digital sales has been rising, they have not been rising at the same rate as analogue sales have been falling and value is being lost.

At least for musicians, a key component of the social contract was that while the market for the sale of music might decline, new and different income sources would arise.  Infamously, this came to be associated with the idea that touring and merchandise income would supplant the sale of music products.  It has not. If there is a Golden Age, it has eluded a new generation of musicians.

It comes as no surprise then that, in 2011, the average artist in Canada earned about $7,200 per year from music-related activities, according to a 2013 study conducted for the Canadian Independent Music Association. This reflects the sharp erosion of the ability of artists, especially young ones struggling to build a career, to earn a living from their creative work.

As alternative income sources failed to appear, a new and offensive concept has appeared: the idea that creators have an inner compulsion to create, and that remuneration is not integral to the creative impulse – an idea which reached its nadir in Amanda Palmer’s remark that musicians would be happy to perform with her for “beer and hugs”.

Musicians aren’t the only creators feeling the pinch. According to a 2015 survey by the Writers’ Union of Canada authors are earning 27% less from their craft than they did in 1998, after taking inflation into account.

The survey also found that median net income from writing was less than $5,000 and the average income was about $12,900 – far below the average Canadian income of $49,000. More than 80% of writers earn an income from their writing that is below the poverty line!

Creators are not alone in their struggle to stay afloat in the new economy. Taking a broader view, British economist Guy Standing argues that technologies are disrupting the way income and earnings are distributed.  Standing is known for his conception of a new class of society, the “precariat” and has just published a new book, “The Corruption of Capitalism:  Why Rentiers Thrive and Work Does not Pay.”  In a review for the Guardian, Katrina Forrester noted that:

the ‘precariat’ is defined by the insecurity and instability of the work it performs. Its members are diverse: immigrant Uber drivers and millennial interns, part-time lecturers and the cleaners and couriers of the “gig economy”, the old working class forced into temporary and casual labour.

She continues:

“For Standing, what matters is that technologies are destroying the way our income and earnings have been distributed. A new “rental wedge” has been created – between profits, which are growing, and ever more concentrated, and wages, which are falling and ever more uncertain. Work is no longer the road to riches, or even the way out of poverty. There may be more work, but it pays less.”

Creators belong on this list as well – as its charter members, I would argue. I have heard corporate executives and government policy makers discuss the “gig economy” in almost breathless terms – and invariably the people extolling its virtues have full time jobs with benefits and pensions.  They have no IDEA how desperate life in the gig economy can be. Musicians know.

All of this is taking place in an environment in which music is generating fabulous amounts of money. It is just that, as Gurry points out, very little of it seems to be finding its way on to the creators’ side of the ledger.

Part of the problem has to do with how people are consuming music online.  There are two principal methods – subscription and ad-supported.  It is the latter – ad-supported, on-demand music services such as YouTube and SoundCloud – that have driven most of the increase in digital music consumption – largely because they are free to the consumer. According to a recent study by the IFPI, the problem is that those services deliver far less revenue than paid services.

A subscription service, such as Spotify for example, returned $18 (US) a year per consumer in 2014 – compared to YouTube’s $1. Ad-supported services, with more than 13 times more users than paid services, delivered less than one-third as much money to artists and other rights holders.

The effect of this gaping disparity is that overall digital music revenue growth has lagged far behind consumption.

This disparity has been dubbed the “Value Gap” – which Music Canada defines as “the gross mismatch between the volume of music being enjoyed by consumers and the revenues being returned to the music community.”


So where to from here? What can be done to restore the creative middle class and level the playing field?

As I noted when I began, we are fortunate in Canada to live in a well-functioning social democracy. We can make choices about the type of society we live in, and collectively, through our political representatives, we can take action.

Music Canada is among those now calling for reforms. But the entire creative community, here in Canada and around the world, is speaking up. The Writers’ Union views the situation we face as nothing less than “a cultural emergency for Canadians.” They argue, “If we want a strong and diverse publishing and cultural industry, it is essential that creators are reasonably and fairly compensated….If writers continue to be compensated…at these low rates it will inevitably become impossible for professionals in the field to earn a living.”

This year in Europe and the US, thousands of artists have petitioned their governments to address the value gap and rebalance the rules.  Expect more of the same, very soon, in Canada.

There is very clearly a call to action – so what should this action look like

Well for a start, any approach to the problem should be holistic and multijurisdictional.

Municipal Action!

Music Canada has been aggressively opening new channels to do this. For example, we have been taking the message to municipalities that they can implement simple, straightforward local policies to improve the business environment for creators and the businesses that support them.

Music Canada identified these options in a 2015 report, The Mastering of a Music City. The report has gone viral all over the world.

The idea of local governments creating music cities and mayors running on pro music platforms would have been ridiculous just a few years ago. Yet today, in Canada alone, nine municipalities of various sizes across the country have Music City strategies in place. And more are coming.

Municipalities are taking these steps because they now understand that the benefits are worth the effort. For example: job creation, economic growth, tourism development, city brand building, artistic and cultural growth. Perhaps most importantly, strong music scenes have also been proven to attract other business investment along with talented young workers who put a high value on quality of life, no matter what their profession.

Provincial Action!!

At the provincial level, Ontario and BC are trailblazers having created music-friendly programs that are almost unique in the world.  Both provinces have dedicated substantial music financial resources and have created music-friendly policies such as the BC’s red tape reduction strategy that is designed to supercharge the live music economy.

Federal Action!!!

For her part, Minister Joly has been crisscrossing the country, asking people to think big, to be ambitious and to step outside the box; these are her exact words.

Minister of Heritage, Melanie Joly

Minister of Heritage, Melanie Joly

So let’s do that – let’s think big. How can the federal government get involved? How can it innovate and, like Ontario and BC, blaze a new trail? The government has made it clear that it wants a new toolkit to confront the challenges facing Canada’s creators and that it seeks a new social contract for creators. This comes after almost two decades of federal government policy-making that has almost exclusively favoured the user community.  A favoured rubric of the previous Conservative government was that creators and the creative sector would have to take “water in their wine” if they wanted any change at all to the copyright framework. By the time the wine was finished being watered, it bore little resemblance to wine at all.

If the Minister of Heritage is serious, then the government of Canada has to employ a creator-centric approach.  And to do this it has four “levers” in its toolkit: legislation, program funding, policies and treaties, and institutions. Here are some thoughts about how those levers might be manipulated to benefit our creative community:


Legislation

This one is simple.  End all the cross-subsidies paid by creators. Now.

The businesses that benefit from these cross-subsidies have become wealthy beyond imagination over the years. The goal initially was to get them off the ground. Job done. The creative community has been making its contribution for two decades. It’s payback time.

Policies and Treaties

First, I’d like to applaud the federal government on signing the CETA agreement with the European Union. This treaty contains provisions that will encourage the creation of intellectual property assets.   The production of these assets results in a double dividend for our country: firstly they are material assets, which are owned by Canadians and are exportable, and secondly they are cultural assets which allow us to tell our story to the world.  More of this please!

Second, I note that Ontario, BC and municipalities across Canada are all designing policies to attract foreign direct investment in the domestic music economy.  The federal government would do well to heed those examples, and pitch in with supportive policies of its own.

Third, Canada is home to one of the most vibrant live music scenes in the world. Provinces and municipalities are awake to the music tourism opportunities this presents. This is an easy one Ottawa:  tell the rest of the world what a brilliant destination we are for music tourism; market music! Brand Canada as one of the greatest live music scenes in the world, and brag about it!

Program Funding

First, Canada currently boasts an enviable system of programme funding for music. But that funding needs to keep pace with inflation as well as the changing realities of the marketplace and creators’ lives. I have repeatedly urged the government to pay attention to how the lives of creators have changed. For example, in a globalized market, developing export opportunities is critical for them. So? Spend money on the Trade Routes programme – a LOT of money; earmark some of it for music.

Next, artists’ incomes have cratered. What could that mean? Well, how about the fact they can’t afford homes. Housing affordability has become an increasingly urgent issue for them. The federal government should seriously examine this issue in the context of cultural infrastructure.  And by the way, Ontario? Get with that as well … cultural infrastructure has to be part of your infrastructure spending.

Finally, musicians used to be surrounded by a plethora of enablers and supporters. They are gone with the ecosystem, gone with the money. Musicians are now more often than not micro businesses, sole proprietors and individual entrepreneurs. Has any thought been given to a programme that would fund skills and entrepreneurial training?   This is actually an initiative in which municipalities could also play a large part.

Institutions

Here, the federal government has already taken positive steps such as increasing funding for the CBC and the Canada Council for the Arts. During her recent consultations, Minister Joly made the point that the government is looking to go in new and bigger directions. She looked back to eras in which the CBC, the CRTC and the Canada Council had been created.

But before we create something new, let’s fix something old.  One institution that needs to be reimagined and reinvented for the digital era is the Copyright Board of Canada. The Senate of Canada itself is conducting hearings into the operation of the Board – that is how serious the problem has become. The government needs to turn it into a true business development office for the creative and user communities.

As for something new, here’s a really big idea. Right across the country music education is in jeopardy; frankly it is under assault. Increasingly, the students with access to music education are from more affluent families. Inner city youth, remote, rural and indigenous communities are getting shut out. But it is not just music, it is the liberal arts in general that are at risk.

We need to reconnect our young people with the importance of a liberal arts education, with the importance of creativity. One of the things we’ve seen is an erosion of respect for the creative process. Rebuilding respect for the humanities will assist us in rebuilding our shattered framework. Someone who has done an enormous amount of thinking about this, and who sees the value of humanities is Charles Fadel. An example of the type of work he and his Center for Curriculum Redesign have been doing can be found here. Today it is all to common to attend conferences on innovation at which the topics of culture and the humanities are literally never raised; instead the four-headed god of STEM is worshiped with a fervour the catholic church can only wish to entertain from its adherents.

The Federal Government needs to exercise a leadership role because this is a national issue of national importance.  The Government already supports a programme like this – focused on science.  It an absolutely wonderful programme called Let’s Talk Science.  Their own description of their mission is as follows:

Let’s Talk Science is an award-winning, national, charitable organization focused on education and outreach to support youth development. We create and deliver unique learning programs and services that engage children, youth and educators in science, technology, engineering and mathematics (STEM).

If Science, then why not Humanities?  I urge the Department of Heritage to convene an expert panel to consider this issue.  I urge them to go further than simple funding a charitable endeavour to promote the humanities to our youth, I urge the government to establish a permanent National Humanities Council.

CODA

I will offer a coda at this point.

One of the questions being asked by the Minister of Heritage is “how can we (I assume she means both the people of Canada and the government) use content to promote a strong democracy?” This got me thinking about the intimate connection, throughout history, between creators and democracy.

Poets, film-makers, and novelists have always played an essential role in the fight for democracy and civil rights.  Here in Canada we have an immediate example at hand, Gord Downie’s The Secret Path. But to his name we can add Pete Seeger, Alexander Solzhenitsyn, Vaclav Havel, Billie Holiday, Nina Simone, Percy Bysshe Shelley, Fela Kuti and many, many more. These are all people who were banned, exiled or jailed for their fight for justice and democratic principles.

It is instructive, is it not, that after the revolution in Czechoslovakia, the people turned not to a strongman but to a playwright. A playwright whose velvet revolution had been powered by illicit tapes of Lou Reed’s band, The Velvet Underground. You can read the story here.

As you may have heard when you entered the room, our background music was a selection of protest songs.  That has been one of music’s great contributions to our world: music and protest anthems have been associated with just about every social change for decades.  I’ve put a Spotify playlist of protest songs together that you can find here. BUY SOME OF THESE SONGS!!

Creators are truly, as Shelley famously said, “the unacknowledged legislators of the world.”  Now, when he says they are legislators, he doesn’t mean they’re lawyers, he doesn’t mean they’re necessarily politicians. What I think he is saying is that creators predict our future, they underpin our future, and they create a framework (political AND cultural) for our future. To the extent we allow these voices to be in any way compromised or marginalized, our democracy will suffer a great loss.

Should we just “get used” to the way things are?  Some of our politicians and virtually the entire techno-utopian community are saying so.  Why? Why should we get used to the way things are?  The citizens who opposed the brutal child labour regimes of the 1st Industrial Revolution did not “get used to” those conditions – they fought to change them – and they did change them.  They changed the world for the better.  We’re are in the midst of what some are calling the 4th Industrial Revolution.  And while it has ushered in great boons, just the way the 1st Industrial Revolution did, so too it is ushering in banes.  Mary and Percy Shelley fully understood this when they wrote Frankenstein.  They understood that the unmediated introduction of new technology into world cancreate monsters.  But it does not need to, not if technology is accountable to the people – all the people.

The members of the modern technological “precariat” are also objecting to the circumstances of their lives. And I warrant they will fight to change them.  As I said at the outset, in a social democracy we do not have to get “used to it”.  We have the right to decide what sort of world we live in.

So my answer to the Minister’s question is this: If you want a stronger democracy that is less vulnerable to special interests, that distributes wealth equitably, then do everything in your power to restore balance to the world in which our creators live. Encourage and enable them.  Our creators are not living in a golden age.  That was the promise but they didn’t get their golden age. The promise was broken.  We owe it to them.  And we owe it to them now.

We would do well to remember that the fight for democracy and justice has always had a soundtrack.

Graham Henderson is the President of Music Canada. He also writes on an eclectic range of topics on his personal blog at www.grahamhenderson.ca.

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Music Canada’s Graham Henderson speaks to the Economic Club of Canada on “The Broken Promise of a Golden Age”

On November 1, Music Canada’s President and CEO, Graham Henderson, delivered a moving address to the Economic Club of Canada on the erosion of creators’ rights in the digital age, and what can be done to re-establish a fair working environment.

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Canada’s cultural industries were well represented with attendees from Sony Music Canada, Warner Music Canada, Universal Music Canada, The Motion Picture Association of Canada, the Writers’ Union of Canada, SOCAN, CIMA, CMPA, The Screen Composers Guild of Canada, the Ontario Media Development Corporation, Canada’s Walk of Fame, Ontario’s Ministry of Tourism, Culture and Sport, Re:Sound, and TD Music. Guests from Ryerson University, OCAD, Humber College, CGC Education, Colleges Ontario, and York University represented the education sector. MPPs Monte McNaughton, Lisa MacLeod, Rick Nicholls, Lisa Thompson and Steve Clark were also in attendance.

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We were happy to have been joined by local musicians as well, including Miranda Mulholland, Amanda Martinez, Caroline Brooks of the Good Lovelies, Murray Foster, Alysha Brilla, Jay Douglas, Sonia Aimy, and Sally Shaar of Ginger Ale & The Monowhales.

The Economic Club of Canada’s President and CEO, Rhiannon Traill, who took on the role five and a half years ago with vision and passion, introduced Graham’s address. Rhiannon thanked Graham for the support he has shown for the Economic Club of Canada and for her as President and CEO, and praised Graham as a champion for Canadian culture.

“You’re about to hear a very important speech, and I am really, really proud to be hosting it,” she said. “Graham is an advocate, he is an innovator, he is a collaborator, a bridge builder, a visionary, and a truly great Canadian dedicated to advancing and protecting our country’s music, arts, and culture.”

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Below is the full video of Graham’s speech, titled The Broken Promise of a Golden Age: How creators got squeezed out in the digital era, and what can be done to restore their rights.

Graham’s address was followed by powerful remarks by Miranda Mulholland, who shared her personal experiences to shed light on just how dire things have become for creators trying to earn a living from their work in Canada. Miranda really drove home Graham’s message – we must fight to restore the rights of our creators, who bring such livelihood, spirit and identity to our country.

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Miranda is an accomplished violinist, singer, and label owner of Roaring Girl Records, which represents many JUNO and Grammy award winners. She’s a member of Great Lake Swimmers, Belle Starr, and the recently formed Harrow Fair. She has played or sung on over 75 albums, including JUNO nominated and award winning albums.

By all metrics she is an accomplished and respected musician, but in a very open manner, laid out the financial reality for creators in Canada.

“This is embarrassing, and I will level with you. I can barely afford rent in a city that I need to live in to work,” said Miranda. Musicians have had to become entrepreneurs, and experts in many fields, just to get by in the digital age. “I’ve had to get used to being a marketer, a promoter, a data entry clerk, a driver, a travel agent, a social media expert, and a paralegal, just in order to make a living as a singer-songwriter violinist. This is our new reality.”

Miranda and Graham agreed that we’ve reached a crisis point, and we cannot accept the argument that there’s nothing we can do to change current circumstances. We must fight for our creators, and we owe it to them to restore balance to the world in which they live.

Below is a selection of tweets from the event:

https://twitter.com/monowhales/status/793499575910797312

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Speech: Graham Henderson at the Economic Club of Canada – “The Broken Promise of a Golden Age”

The following is the full text of a speech delivered by Music Canada’s President and CEO, Graham Henderson, to the Economic Club of Canada on November 1, 2016.

Back in 2003, a famous Canadian recording artist had this to say when he was asked about his prospects in the new digital economy: “we are entering a golden age, a golden age.” This was an idea embraced by artists, the media, pundits, professors and most importantly, policy makers around the globe.

The reason for this heady optimism was the seismic events which were then unfolding in the online distribution and consumption of creative content. Peer-to-peer file sharing had become the default way for people to access virtually unlimited music for free, and the iPod had taken mobile digital music into the mainstream.

The artist who praised the unfolding of this golden age believed that the digital era would usher in a utopia for both musicians and the consumer. Artists would gain access on the Internet to a larger audience than ever before, and in return for the collapse of their traditional marketplaces, they would make more money from the sale of concert tickets, merchandise and other means. This was an epic leap of faith with virtually everything riding on one thing – the promise of digital technology.

The passage of time has instructed us that we might have benefited from a judicious skepticism, that we might have done well to have questioned the extraordinary promises and prognostications that were being made at the time. Had we done so, I wonder if the world in which we now live would have the characteristics that it does – a world in which the creative middle class, within the span of a single generation, has virtually ceased to exist.  A world in which artists struggle more than ever before to earn a living wage and put food on the table. As they transition to the world of the self-employed “entrepreneur”, they are working longer hours and are sometimes engaged in activities for which they have little aptitude, such as data entry clerks – all for scandalously less money.

Jaron Lanier is an author, composer, computer scientist and, some say, the father of virtual reality. He is concerned about the challenges facing creators. In a recent edition of the World Intellectual Property Organization’s magazine, Lanier concluded that, “We have seen an implosion of careers and career opportunities for those who have devoted their lives to cultural expression. … Opportunities are rare compared to the old-fashioned middle-class jobs that existed in great numbers around things like writing, photography, recorded music and many other creative pursuits.”

Here in Canada, our creators, the people who build our nation’s cultural foundation and much of the intellectual property we export – are struggling, and along with them the people and businesses who support their work are struggling. Well paid jobs with benefits are disappearing and being replaced by precarious employment.  Culture today, more than at almost any time in our history, is dependent on the largesse of the government.

One of the most deeply unpleasant aspects of the past 20 years has been the manner in which the gutting of the creative class, and now an entire way of life (think of youth being told they must accept a world of precarious employment), has been presented as an inevitability. At a recent round table, I sat beside a young entrepreneur who was beside himself at the idea that the Minister of Heritage was having hearings on the digital economy. For him, it was a pure and simple case of the “horse being out of the barn.” There was no turning back the clock, and no point belabouring the issue – “we’re done. This is the world we live in.”

Today I want to question that supposition. The idea that we cannot change the circumstances in which we live seems to be, dismayingly, widely held. I believe this outlook is founded on a sort of market-driven, hyper-capitalism, a debased and absolutist form of economic, technological determinism. Ayn Rand would love this; it is a sort of libertarian fantasy: the market determines how we live our lives and governments need to get out of the way – and that means us, the people. But let’s remember that we live in a social democracy – we live in a place where the people, not corporations, and not plutocrats, get to decide how to order their lives.

We must (and I include our government policy makers here) harness our imaginations. We cannot look at the world and see it only as it is. We have to be able to see it as it might and should be. And frankly, creators are really good at doing that.

Creators for centuries have fought and in some cases died to change the worlds in which they lived. Oppressive forms of employment were ameliorated; people, not corporations, gave us universal healthcare – because PEOPLE decided that THAT was the way they wanted to live their lives.

We are inheritors of this great tradition. And we can deploy it to restore the balance. Minister Joly, for example, as part of her cultural consultations, has asked us to think outside the box, to be bold and to think big. Well, one way to do that is to ignore the conventional wisdom that tells us: this is the way it has to be. And that is what I hope to do today.

But first, let’s look at how we in the creative community got to where we are today.

The foundation for most of the rules and regulations which govern our modern digital environment are two treaties adopted by the World Intellectual Property Organization in 1996: The WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.

To help us better appreciate the magnitude of the task the negotiators of those treaties faced, we need to understand what the world looked like at that time. This was a world in which digital technologies – and their adoption by consumers – were in their infancy.

In 1996, less than 1% of the world’s population was online. If you were one of the few, it was via a dial-up modem that delivered websites at the rate of 30 to 60 seconds a page. You searched the 100,000-odd websites using AltaVista or Yahoo – Google wouldn’t launch for another two years.

In 1996, email had yet to surpass the U.S. Postal Service in terms volume of messages delivered. Alanis Morissette’s Jagged Little Pill was the world’s top selling album – though fans were more likely to purchase it from a mail-order club than an online retailer.

After the adoption of the WIPO treaties, it would be a full two and a half years before Napster appeared. It was four and a half years before the introduction of the iPod (2001), six years before the advent of the Blackberry “smartphone”, eight years before the first video was uploaded to YouTube and over a decade before the first song was streamed on Spotify.

The people setting the rules for our world were well-intentioned and clever; but the reality is that they were guessing. Now there is nothing wrong with guessing. We all make educated guesses on which we base our actions.  But the beauty of our world is that with the passage of time and the accumulation of experience, we have the luxury of reassessing our situation, and adapting our behaviours when those first guesses clearly turn out to have been ill-founded. We have now had 20 years of experience with those early WIPO guesses.  How are we doing?

Well, the preambles to these treaties give us an idea of what WIPO wanted to do. The people who drafted the Copyright Treaty, told us that it was designed to (1) recognize the profound impact of the development and convergence of information and communication technologies on the creation and use of literary and artistic works, (2) emphasize the outstanding significance of copyright protection as an incentive for literary and artistic creation, and (3) recognize the need to maintain a balance between the rights of authors and the larger public interest.

These are laudable goals.  But very clearly everything would come down to the question of balance. If balanced correctly, the new rules would supercharge the digital marketplace – a boon to both creators and the public.

But very quickly, fissures began to appear. Technology advocates and so-called intermediaries argued that in order for the new technological infrastructure to get off the ground, creators were going to have to give up something to get something. What they would give up would be copyright payments that would otherwise have been required under the pre-WIPO rules: exceptions would be created.  In return, creators would benefit from a larger, more diverse marketplace.  So-called “middle men” would disappear.  All manner of economic miracles would take place. It would be win-win.

So when the first major country to implement the WIPO Treaties, the US, did so in 1998, the intermediaries and other technology companies insisted on a quid pro quo:  a series of “safe harbours” from liability.  These safe harbours were codified in the Digital Millennium Copyright Act, and subsequently served as a template to legislators around the world. Almost every exception excused someone from making a payment to a copyright owner that they would otherwise have had to make. But there was also a social quid pro quo that was articulated over and over and over again: creators would be better off.  In my view this amounted to more than a bargain, more than an article of faith: it was a social contract. A bargain which very quickly turned Faustian; a social contract that is now in a shambles.

The French economist Olivier Bomsel was among the first to call this arrangement out for what it was – a massive system of cross-subsidies. By foregoing money otherwise payable to them, the creative community would subsidize the development of the technology infrastructure.

Up to this day, much of the policy-making regarding copyright law continues to be driven by the popular mythology that digital technologies and platforms produce lucrative new opportunities for the creative economy.

Until very recently, however, the hypothesis that digitization and the Internet would unleash a Golden Age for the creative economy had not been adequately put to the test. Music Canada decided to address this information gap by commissioning an independent analysis to measure the impact of digitization on the creative economy.

The author of this study is Dr. George Barker, Director of the Centre for Law and Economics at Australian National University, and currently a visiting fellow at the London School of Economics. His paper examines the data on the effect of digitization and the Internet on among other things, Canadian music industry sales.

The paper seeks answers to the questions, “Have digital technologies and the Internet –together with the copyright liability exceptions adopted to spur them — spawned a Golden Age for creative content?”, and “Has the need for intellectual property protection fallen in light of these benefits?”

The answer to both questions, according to Dr. Barker, is no. His study found that digital technologies and the Internet were associated with sharply reduced demand, prices and sales, and consequently, to lower investment and employment.

The evidence he cites overwhelmingly supports this finding, and here are but two examples from music:

  • Globally, music sales fell about 70% in real terms between 1999 and 2013.
  • In Canada from 1997-2015, music revenues fell to 20 percent of what they would have been had they kept pace with inflation and real GDP growth – a modest expectation, to say the least.  This resulted in a cumulative revenue gap of over 12 and-a-half billion dollars.

Put another way, over 12 and-a-half billion dollars that would have gone to artists and rights holders simply disappeared. Most remarkably, this happened at a time when music consumption rose to record levels.

As music was gaining in value and use to the consumer, its value to the creator was going into sharp decline.

Francis Gurry, the Director General of WIPO, decried this phenomenon, concluding that the migration of creative works from analog formats and physical distribution to digital technology and internet distribution had been accompanied by an “avoidable and inappropriate loss of value to creators, performers and the creative sector.”

At least for musicians, a key component of the social contract was that while the market for the sale of music might decline, new and different income sources would arise.  Infamously, this came to be associated with the idea that touring and merchandise income would supplant the sale of music products.  It has not. If there is a Golden Age, it has eluded a new generation of musicians.

It comes as no surprise then that, in 2011, the average artist in Canada earned about $7,200 per year from music-related activities, according to a 2013 study conducted for the Canadian Independent Music Association. This reflects the sharp erosion of the ability of artists, especially young ones struggling to build a career, to earn a living from their creative work.

As alternative income sources failed to appear, a new and offensive concept has appeared: the idea that creators have an inner compulsion to create, and that remuneration is not integral to the creative impulse – an idea which reached its nadir in Amanda Palmer’s remark that musicians would be happy to perform with her for “beer and hugs”.

Musicians aren’t the only creators feeling the pinch. According to a 2015 survey by the Writers’ Union of Canada authors are earning 27% less from their craft than they did in 1998, after taking inflation into account.

The survey also found that median net income from writing was less than $5,000 and the average income was about $12,900 – far below the average Canadian income of $49,000. More than 80% of writers earn an income from their writing that is below the poverty line!

Creators are not alone in their struggle to stay afloat in the new economy. Taking a broader view, British economist Guy Standing argues that technologies are disrupting the way income and earnings are distributed. In his new book, “The Corruption of Capitalism,” Standing describes the appearance of a new “rental wedge” “between profits, which are growing, and ever more concentrated, and wages, which are falling and ever more uncertain.”

The “Precariat,” as he calls the new social class, is “defined by the insecurity and instability of the work it performs.” He identifies them as “Uber drivers, millennial interns, part-time lecturers and the cleaners and couriers of the ‘gig economy’.”

Creators belong on this list as well – as its charter members, I would argue. I have heard corporate executives and government policy makers discuss the “gig economy” in almost breathless terms – invariably the people extolling its virtues have full time jobs with benefits and pensions.  They have no IDEA how desperate life in the gig economy can be. Musicians know.

All of this is taking place in an environment in which music is generating fabulous amounts of money. It is just that, as Gurry points out, very little of it seems to be finding its way on to the creators’ side of the ledger.

Part of the problem has to do with how people are consuming music online.  There are two principal methods – subscription and ad-supported.  It is the latter — ad-supported, on-demand music services such as YouTube and SoundCloud — that have driven most of the increase in digital music consumption. But those services deliver far less revenue than paid services.

A subscription service, such as Spotify for example, returned $18 (US) a year per consumer in 2014 — compared to YouTube’s $1. Ad-supported services, with more than 13 times more users than paid services, delivered less than one-third as much money to artists and other rights holders.

The effect of this gaping disparity is that overall digital music revenue growth has lagged far behind consumption.

This disparity has been dubbed the “Value Gap” – which we define as “the gross mismatch between the volume of music being enjoyed by consumers and the revenues being returned to the music community.”

So where to from here? What can be done to restore the creative middle class and level the playing field?

As I noted when I began, we are fortunate in Canada to live in a well-functioning social democracy. We can make choices about the type of society we live in, and collectively, through our political representatives, we can take action.

Music Canada is among those now calling for reforms. But the entire creative community, here in Canada and around the world, is speaking up.

The Writers’ Union views the situation we face as nothing less than “a cultural emergency for Canadians.”

“If we want a strong and diverse publishing and cultural industry, it is essential that creators are reasonably and fairly compensated,” it argues. “If writers continue to be compensated … at these low rates it will inevitably become impossible for professionals in the field to earn a living.”

This year in Europe and the US, thousands of artists have petitioned their governments to address the value gap and rebalance the rules.  Expect more of the same, very soon, in Canada.

There is very clearly a call to action – so what should this action look like?

Well for a start, any approach to the problem should be holistic and multijurisdictional.

Music Canada has been aggressively opening new channels to do this. For example, we have been taking the message to municipalities that they can implement simple, straightforward local policies to improve the business environment for creators and the businesses that support them.

Music Canada identified these options in our 2015 Music Cities report. The report has gone viral all over the world.

The idea of local governments creating music cities, and mayors running on pro music platforms, would have been ridiculous just a few years ago. Yet today nine municipalities of various sizes across the country have Music Cities strategies in place. And more are coming.

Municipalities are taking these steps because they understand that the benefits are worth the effort. For example: job creation, economic growth, tourism development, city brand building, artistic and cultural growth. Strong music scenes have also been proven to attract other business investment along with talented young workers who put a high value on quality of life, no matter what their profession is.

At the provincial level, Ontario and BC are trailblazers, having created music-friendly programs that are almost unique in the world, with substantial music funds and music-friendly policies such as red tape reduction strategies to facilitate live music performances.

For her part, Minister Joly has been crisscrossing the country, asking people to think big, to be ambitious and to step outside the box.

So let’s think about that. How CAN the federal government get involved? How can it innovate and, like Ontario and BC, blaze a new trail? The government has made it clear that it wants a new toolkit to confront the challenges facing Canada’s creators, that it seeks a new social contract.

It has four levers in its toolkit: legislation, program funding, policies and treaties, and institutions. Here are some thoughts about how those levers might be pulled to benefit our creative community.

Legislation

This one is simple.  End all the cross-subsidies paid by creators. Now.

The businesses that benefit from these cross-subsidies have become wealthy beyond imagination over the years. The goal initially was to get them off the ground. Job done. The creative community has been making its contribution for two decades. It’s payback time.

Policies and Treaties

First, I’d like to applaud the federal government on signing the CETA agreement with the European Union. This treaty contains provisions that will encourage the creation of intellectual property assets.   The production of these assets results in a double dividend for our country – 1) they are material assets, which are owned by Canadians and are exportable, and 2) they are cultural – assets which allow us to tell our story to the world.  More of this please!

Second, I note that Ontario, BC and municipalities across Canada are all designing policies to attract foreign direct investment in the domestic music economy.  The federal government would do well to heed those examples, and pitch in with supportive policies of its own.

Third, Canada is home to one of the most vibrant live music scenes in the world. Provinces and municipalities are awake to the music tourism opportunities this presents. This is an easy one Ottawa:  tell the rest of the world what a brilliant destination we are for music tourism; market music! Brand Canada as one of the greatest live music scenes in the world, and brag about it!

Program Funding

Canada currently boasts an enviable system of programme funding for music. But that funding needs to keep pace with inflation as well as the changing realities of the marketplace and creators’ lives. I have repeatedly urged the government to pay attention to how the lives of creators have changed. For example, in a globalized market, developing export opportunities is critical for them. So? Spend money on the Trade Routes programme – a LOT of money; earmark some of it for music.

Next, artists’ incomes have cratered. What could that mean? Well, how about the fact they can’t afford homes. Housing affordability has become an increasingly urgent issue for them. The federal government should seriously examine this issue in the context of cultural infrastructure.  And by the way, Ontario? Get with that as well … cultural infrastructure has to be part of your infrastructure spending.

Musicians used to be surrounded by a universe of enablers and supporters. They are gone with the ecosystem, gone with the money. Musicians are now more-often-than-not micro businesses, sole proprietors, entrepreneurs. Has any thought been given to a programme to fund skills and entrepreneurial training?

Institutions

Here, the federal government has already taken positive steps such as increasing funding for the CBC and the Canada Council for the Arts. During her recent consultations, Minister Joly made the point that the government is looking to go in new and bigger directions. She looked back to an era in which the CBC, the CRTC and the Canada Council had been created.

First, one institution that needs to be repaired is the Copyright Board of Canada. I’m actually flying tomorrow to hearings that are being conducted by the Senate into the operation of the Copyright Board of Canada. That is first on our list of institutions I would encourage the government to modernize, and to turn it into a true business development office for the creative industries.

But here’s a really big idea. Right across the country music education is in jeopardy. Increasingly, the students with access to music education are from more affluent communities. Inner city youth, remote, rural and indigenous communities are getting shut out. But it is not just music, it is the liberal arts in general that are at risk.

We need to reconnect our young people with the importance of a liberal arts education, with the importance of creativity. One of the things we’ve seen is an erosion of respect for the creative process. Rebuilding respect for the humanities will assist us in rebuilding our shattered framework.

The federal government needs to exercise a leadership role because this is a national issue of national importance.  The federal government already supports a programme like this – focused on science.  It is fantastic and connects young people with the importance of a science education.  If Science then, why not Humanities?  I urge the Department of Heritage to convene an expert panel to consider this issue and to establish a permanent National Humanities Council.

CONCLUSION

I will offer a sort of coda at this point.  One of the questions being asked by the Minister of Heritage is “how can the government use content to promote a strong democracy?” This got me thinking about the intimate connection – throughout history – between creators and democracy. Poets, film-makers, and novelists have always played an essential role in the fight for democracy and civil rights.  Here in Canada we have an immediate example at hand, Gord Downie’s Secret Path. But to his name we can add Pete Seeger, Solzhenitsyn, Vaclav Havel, Billie Holiday, Nina Simone, Percy Bysshe Shelley, Fela Kuti and many, many more. These are all people who were banned, exiled or jailed for their fight for justice and democratic principles.

It is instructive, is it not, that after the revolution in Czechoslovakia, the people turned not to a strongman but to a playwright. A playwright whose velvet revolution had been powered by illicit tapes of Lou Reed’s band, The Velvet Underground.

As you may have heard when you entered the room, our background music was a selection of protest songs.  That has been one of music’s great contributions to our world: music and protest anthems have been associated with just about every social change for decades.  I’ve put a Spotify playlist together which you’ll find at your seat.

Our creators are truly, as Shelley famously said, “the unacknowledged legislators of the world.”  Now when he says they are legislators, he doesn’t mean they’re lawyers, he doesn’t mean they’re necessarily politicians. What I think he is saying is that creators predict our future, they underpin our future, and they create a framework (political AND cultural) for our future. To the extent we allow those voices to be in any way compromised or marginalized, our democracy will suffer a great loss.

Should we just “get used” to the way things are?  The people opposing the brutal child labour regimes of the 1st Industrial Revolution did not “get used to” those conditions – they fought to change them – and they changed the world.  We’re are in the midst of what some are calling the 4th Industrial Revolution.  Young people today, and creators, members of the “precariat”, are also objecting to the circumstances of their lives. And I warrant they will fight to change them.  As I said at the outset, in a social democracy we do not have to get “used to it”.  We have the right to decide what sort of world we live in.

So my answer to the Minister’s question is this: If you want a stronger democracy that is less vulnerable to special interests, do everything in your power to restore balance to the world in which our creators live. Encourage and enable them.  Our creators are not living in a golden age.  That was the original goal, they didn’t get it, the promise was broken – so we owe it to them.  Now.

And let’s all remember, the fight for democracy and justice has always had a soundtrack.

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The Rambler by Graham Henderson: Thoughts on Minister Melanie Joly’s speech to the Economic Club of Canada

Graham_headphones3Blog ThumbnailThe Rambler is a column by Graham Henderson, President of Music Canada. Graham writes from time to time about developments in the music industry, new trends or just about music! Let’s face it, Graham has been around for a long time and has a lot to ramble on about.

This article was originally published on www.grahamhenderson.ca

On 9 June 2016, Minister of Heritage, Melanie Joly addressed the Economic Club of Canada on the topic of “Canada’s Culture Dividend: The Creative Sector As Economic Driver.”  I believe this was her first public, policy-oriented speech and it is significant that she chose the Economic Club as the venue.  As a sponsor of the event, Music Canada was afforded a podium opportunity to thank the Minister and reflect on her remarks.  Before we get to what I said then, I will draw attention to a few important aspects of her speech. Unfortunately, and for reasons I do not understand, this important speech has not yet been published by the Minister’s office, so I cannot link to it.  An official request has been made by Music Canada.

MJ

The Minister put on a bravura display which showcased an extraordinary grasp of a complex topic.  Clearly much thought had gone into what she said.  She was conversant with all of the facts and figures and conveyed the important message that culture is big business in Canada.  She noted that government support for the arts should not just be about funding – that funding was only part of the answer.  She bluntly stated that cultural policy in Canada needed a “new toolbox.” and pledged to create it.  This is one of the most prescient and important undertakings that any Heritage Minister in memory has made, and with a mandated review of the Copyright Act coming in 2017, it will be very interesting to see how the Minister intends to put her words into meaningful action.

There was one interesting moment in the event that actually took place during my remarks.  I was in the process of discussing the music industries transition from an analogue to digital economy. I had pointed out the extent to which we had embraced this evolution but then remarked that the Government needed to work together with the creative community “to ensure one critical result: appropriate remuneration of artists for their work.” This drew a veritable storm of sustained applause that even surprised me – I hope this is something the Minister and her staff noticed.

For all of the positives in her speech, there were some very surprisingly sour notes. The entire literary world was completely ignored; a fact that drew a measured but forceful rebuke from a member of the audience during the question and answer period. A question from a member of the fashion industry about whether or not the Minister considered fashion design to be a part of Canada’s cultural mosaic was met with what amounted to a flat out “no”. It is hard to understand why, say, videos games are considered to be “cultural” products but fashion designs are not. A question about just how substantive the government intended its mandated 2017 copyright review to be was met with a surprisingly inchoate response.  I would have thought that a Minister of a government in search of a new “toolbox” would have responded to that question with an emphatic “We intend our review to be VERY substantive.”

Overall it was a very satisfying speech which introduced the cultural community to a Minister with vision and passion who clearly desires to cast herself in the role of a champion.

Now, as to my speech, I spoke extemporaneously from bullet points and notes scribbled during the Minister’s speech.  What follows is the transcribed text of my remarks with a few amendments to clarify grammar!


I’m Graham Henderson. I’m from Music Canada, and it’s my honour to thank the Minister and offer some brief thoughts on her remarks.  I guess if I had been asked to do a formal review, I could do it in one word: “wow.” Minister Joly, you managed in a very short period of time to demonstrate your grasp of the importance of the cultural industries to our economy. I won’t go into all of the economic details – we are all familiar with them: for example the fact that culture represents 3% of our GDP. This amounts to a 55 billion dollar contribution to our nation’s GDP each year.  But beyond this, thanks to pioneering work being done by Music Canada, we now understand that culture’s contribution to our society is so much more complex.  Music for example has an enormous impact on the quality of life in our communities. And, as you recognize, government contributions to this sector represent an investment, and not just a financial outlay – there is an enormous return on that investment.  Additionally, as you have observed, culture is a key component of “Brand Canada.” In many respects culture is a gift to the people of Canada, and we are not doing enough to incorporate it into Brand Canada, and celebrate it around the world.

I was also very, very pleased to hear your call for more investment from business in the cultural sector. Also I was pleased by your references to and emphasis on the humanities.  The humanities underpin everything that we do, and actually, are under threat here and around the world. As you probably know, Republican governors across the United States are calling for the removal of state funding for students seeking an education in the humanities. Here in Canada the last Government financially supported an excellent STEM initiative called “Let’s Talk Science.” Well, in response to the comment that you made about the importance of the humanities, perhaps your government could introduce a program called “Let’s Talk Humanities;” a program geared to interest our young people in an education in that sector and turn STEM into STEAM!

This year is a good year for music. It’s the first year in almost two decades that there has been an uptick in our revenue picture. Global growth is up three percent. Music consumption is exploding, particularly through the streaming services. This is great news and it reflects an industry that is adapting to the rapid transformation of technology.  However, it requires us to continue to work together to ensure one critical result: appropriate remuneration of artists for their work.

I think everyone in this room looks forward to working with you in the coming months on the legislative review of the Copyright Act. This must not be a pro forma review. This needs to be meaningful. We have fourteen years of experience to guide us.

Now, in concluding, I am going to do something I always try to do whenever I’m speaking in public! I try to work in some of the ideas of my favourite poet, Percy Bysshe Shelley, which I’m going to do now. In this case, given some of the things the Minister has said, I think it’s exceedingly appropriate.

Shelley

Sketch of Shelley drawn by Edward Ellerker Williams. 1821-22. In my view the only extant image that captures the man.

Shelley wrote a defence of creativity almost two hundred years ago to which he gave the title “A Defence of Poetry.” When Shelley wrote this, he was responding to a pointed attack on poetry itself, but I like think of the essay as a defense of creativity in general.  In it, Shelley lists some of the important contributions of science and economics, but he then goes on to say,

“…it exceeds all imagination to conceive what would have been the moral condition of the world if neither Dante, Petrarch, Boccaccio, Chaucer, Shakespeare, Calderon, Lord Bacon, nor Milton, had ever existed; if Raphael and Michael Angelo had never been born.”

And this feeds in directly to his conclusions.  Shelley writes:

“Poets are the hierophants of an unapprehended inspiration; the mirrors of the gigantic shadows which futurity casts upon the present; the words which express what they understand not; the trumpets which sing to battle, and feel not what they inspire; the influence which is moved not, but moves. Poets are the unacknowledged legislators of the world.”

When Shelley speaks of “poets,” I believe here he means creators; and when he says they are legislators, he doesn’t mean they’re lawyers, he doesn’t mean they’re necessarily politicians. What I think he is saying is that creators predict our future, they underpin our future, and they create a framework for our future. And this is why I am excited about what Minister Joly has said.  The Minister intuitively understands this. The Minister sees that creators are deserving of our respect and protection.  I am so glad to see that we actually have with us an elected legislator who sees that it is our poets who are the true legislators of the world.

Thank you.

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