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Tag archive: IFPI (24)

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Artist advocacy takes centre stage at Midem 2018 during Value Gap event presented by Music Canada and IAEL

Entertainment lawyers have always played a crucial role in the success of their artist clients. But during Midem 2018, Miranda Mulholland urged them to take complimentary steps to empower artists and leverage their network to be connectors, helping to introduce, start discussions, and activate their artist clients.

Mulholland was the keynote speaker at a June 6 event hosted by Music Canada and the International Association of Entertainment Lawyers (IAEL) in Cannes, France. The Value Gap theme flowed through both this event and the launch of IAEL’s new book, Finding the Value in the Gap, later the same day.

Music Canada’s President and CEO Graham Henderson introduced Miranda and shared some opening remarks about Music Canada’s report The Value Gap: Its Origins, Impacts and a Made-In-Canada Approach and thoughts on the vital role of artist advocates.

Two representatives from IAEL, including President Jeff Liebenson and Anne-Marie Pecoraro, as well as Lodovico Benvenuti, Director of IFPI’s European Office, joined Mulholland for a panel discussion following her keynote.

In addition to discussing the IAEL’s brand new publication Finding the Value in the Gap, the international experts leading the charge to address the Value Gap in multiple territories discussed how artists have been instrumental in their campaigns, including a letter to European Commission President Jean-Claude Juncker. The letter was originally signed by more than 1,000 musicians and urges the Commission to address misapplied safe harbour provisions at the heart of the Value Gap to secure a sustainable and thriving music sector for Europe. Similarly, in Canada, more than 3,650 Canadian artists and creators have now signed the Focus On Creators letter to Heritage Minister Mélanie Joly calling on the government to put creators at the heart of future policy.

Guests at the Midem event included influential Canadian and international delegates, as well as members of the legal community, media outlets and European leaders in addressing the Value Gap.

You can watch the full keynote and panel discussion below.

Below is a selection of photos from the event and more information on Finding the Value in the Gap will be available on the IAEL website.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Global Music Report 2018 shows industry experiencing growth from subscription streaming, but Value Gap needs to be addressed for long term sustainability

IFPI today released its anticipated 2018 Global Music Report, providing a state-of-the-industry guide to the top global markets and highlighting industry-wide trends.

While Canada dropped from the sixth to seventh largest music market in the world, the domestic music industry can be encouraged by marked growth in subscription audio streaming, which grew in trade value from USD $95.34 million in 2016 to USD $160.9 million in 2017. This trend has contributed to the first three consecutive years of growth following 15 years of revenue decline.

In Canada, ad-supported streaming declined slightly in 2017, representing USD $16.24 million in trade value, compared to USD $16.59 million in 2016. Video streams represented USD $23.32 million in trade value in 2017, rising from USD $21.56 million in 2016. The total trade value for all types of streaming rose from USD $133.5 million in 2016 to USD $200.4 million in 2017, a 50% increase. This is similar to the global trend where overall streaming revenues grew by 41.1%.

“I’m encouraged by the consecutive years of growth we’re witnessing. But as streaming continues its rise, it’s more important than ever that this business model supports the people making the music,” says Graham Henderson, President and CEO of Music Canada.

“There are still regulations and cross-subsidies in place, in Canada and around the world, intended to get tech companies off the ground,” says Henderson. “These companies, like Google and Facebook, are now some of the world’s wealthiest and have unprecedented control over content online. Music Canada produced a comprehensive report on the Value Gap in Canada, and more than 3,600 Canadian creators have signed the Focus On Creators letter to the Canadian government asking for legislative help. Any future legislation, including the current Copyright Act review, needs to keep the well-being and future of Canadian creators top of mind.”

Frances Moore, Chief Executive of IFPI, also pointed to addressing the Value Gap as a top priority.

“The industry is on a positive path of recovery but it’s very clear that the race is far from won.” Moore explained in an IFPI release. “Record companies are continuing in their efforts to put the industry back onto a stable path and, to that end, we are continuing our campaign to fix the value gap. This is not just essential for music to thrive in today’s global market, but to create the right – fair – environment for it to do so in the future.”

Music Canada’s 2017 report, The Value Gap: Its Origins, Impacts and a Made-In-Canada Approach, proposes a range of practical, forward-looking solutions tailored to Canada’s marketplace, institutions and legal framework.

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Ed Sheeran named 2017’s best-selling global recording artist by IFPI, as Canadians Drake and The Weeknd return to Top 10

IFPI Global Award – Ed Sheeran
Photo Credit: John Marshall – JM Enternational

The IFPI revealed their Top 10 Global Recording Artist Chart today, naming Ed Sheeran as the world’s best-selling artist of 2017. Sheeran is the fifth recipient of the IFPI Global Recording Artist Award, which recognizes an artist’s international success across physical and digital formats.

Sheeran earned the top spot due to his worldwide success of his album ÷ (Divide) and its multiple hit singles including Shape of You, Castle On The Hill, and Galway Girl. The best-selling album topped the charts in 31 countries and was certified multi-Platinum in 34 markets, including Canada, where it was certified Six Times Platinum. Sheeran also had the world’s best-selling single, as Shape of You topped the charts in 25 countries, and was certified multi-Platinum in 24 markets, including Canada, where it reached Diamond status. That marks the first time that the IFPI Global Recording Artist of the Year has had both the best-selling album and single of the year.

“Being crowned the biggest star in the world, with the biggest song and biggest album, is the result of years of ambition, creativity, and hard work on a global scale,” said Max Lousada, CEO of Recorded Music for Warner Music Group & Chairman and CEO of Warner Music UK. “Ed is truly an incredible songwriter, vocalist and performer, whose ability to tell stories and make people feel is what stands him out from the crowd. He’s always had a totally authentic connection with his fans, something he places over everything else. Congrats also to Stuart Camp, the Atlantic teams in the UK and US, and everyone at Warner who contributed to Ed’s amazing success story.”

Ed Sheeran presented with multiple award plaques for the album and its singles by Warner Music Canada.

“It’s wonderful to be able to announce Ed Sheeran as the IFPI Global Recording Artist 2017,” said IFPI chief executive, Frances Moore. “The success Ed has achieved is astonishing and testament to his ability to write and perform songs that connect with a truly global fanbase.”

Drake, who received the Global Artist Award in 2016, placed second on the chart this year. His mix tape More Life broke streaming records, including most first-day streams for an album on Spotify, and most streams in a 24 hour period on Apple Music. Fellow Canadian The Weeknd placed 7th on the chart this year, climbing up from the 10th position on the chart in 2016. Both Drake and The Weeknd have now placed in the Top 10 on this chart for three consecutive years.

“This year’s Global Top 10 really is a ‘who’s who’ of popular music,” continued Moore. “Each artist has a unique impact on the music industry through the talent and energy they are channelling through their work. I congratulate them all for such a successful year.”

The full Top 10 list, which was counted down by the IFPI on Twitter, is now available below.

Top 10 Global Recording Artists 2017

1 Ed Sheeran
2 Drake
3 Taylor Swift
4 Kendrick Lamar
5 Eminem
6 Bruno Mars
7 The Weeknd
8 Imagine Dragons
9 Linkin Park
10 The Chainsmokers

Previous Winners

2016 Drake
2015 Adele
2014 Taylor Swift
2013 One Direction

 

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IFPI’s 2017 Connecting With Music report includes Canadian insights

Today, IFPI released Connecting With Music, its 2017 consumer insight report with information from 13 of the world’s leading music markets. The report was created with data commissioned from Ipsos Connect, and provides a snapshot of the way music fans around the globe are engaging with recorded music.

In 2017, Canada became the sixth largest recorded music market in the world, surpassing Australia, and Connecting With Music offers insight on how Canadian music fans’ listening habits compare with other markets and global figures.

Global trends highlighted in the report include:

Young people are highly engaged with licensed music, especially streaming

Globally, 85% of 13-15-year-olds are streaming music. In Canada, streaming is even more popular among young people, with 89% of 13-15-year-olds reporting streaming music via both audio and video services. 99% of Canadians aged 16-24 identified as licensed music consumers, similar to the global average of 98%.

Music fans engage with licensed music in multiple ways

In Canada, music fans on average access four different licensed ways of listening to music, which is the same as the global average. The four consumption models are: purchase of physical product or paid downloads, audio streaming services for music, video streaming services for music, and listening to music on broadcast or internet radio.

Almost all Canadian internet users (99%) reported listening to licensed music, which is slightly higher than the global average of 96%.

Generally, Canadians are a little less engaged in licensed audio streaming (39%) than the average of global music fans (45%), and 46% of Canadians reported having paid for music in the last six months, compared to 50% globally.

Listening via smartphones is increasing

Overall, Canadians are using smartphones to listen to music a little less than the global average. Globally, 90% of paid audio streamers are using a smartphone to listen, compared to 81% of Canadian respondents. That gap reduces when considering the listening habits of 16-24-year-olds, 84% of which listen via smartphones globally, compared to 81% of Canadians in the same age bracket.

Despite high engagement with licensed music, piracy is still a significant concern

While the percentage of Canadians accessing unlicensed music (33%) was lower than the global average (40%), piracy remains a significant concern in Canada, with 27% of Canadians reporting stream ripping versus the global average of 35%.

Stream ripping is considerably more prevalent among young people, with 43% of Canadians aged 16-24 reporting stream ripping, and a global average of 53% in the same age bracket.

Of those who reported downloading unlicensed music, 54% of global respondents reported also using Google to find it. That figure for Canadian respondents is 46%.

The Value Gap remains an issue

Though video streaming services like YouTube are the most popular form of on-demand music streaming, the revenue returned to music creators from plays on these services is much lower than other licensed music services. 86% of Canadian YouTube users, and 85% of global users reported using the service for music in the past month, translating globally to 1.3 billion users.

One quarter of Canadians surveyed said that they do not pay for a streaming subscription because “anything I want to listen to is on YouTube,” confirming that the Value Gap is very much an issue here in Canada.

 

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World’s largest music stream ripping website to cease operations globally following legal action

IFPI, in conjunction with the RIAA and BPI, announced today that following successful legal action from record companies in the United Kingdom and the United States, the world’s largest music stream ripping website will shut down.

YouTube-mp3.org, a Germany-based site with 60 million visitors a month, facilitated the ripping of downloadable music files from online audio-visual works. Sites like YouTube-mp3.org typically extract large profits from advertising while delivering nothing to music makers. IFPI estimates the site generated “hundreds of thousands of dollars in advertising revenue per month, often from major brands.” In addition to agreeing to cease operations, the site’s operator has agreed to not infringe the rights of artists and labels in the future.

“The largest site dedicated to the fastest growing form of music piracy is shutting down. This is welcome news for music creators and the fans that support them,” says Graham Henderson, President and CEO of Music Canada. “Artists and advocates around the world are fighting for a better future for creators. As we continue to work with governments and legitimate music services to build a functioning ecosystem, it’s important that flagrant violations like stream ripping be met with firm action.”

In a joint release issued by IFPI, the RIAA and BPI, industry leaders welcomed the news:

“Stream ripping sites blatantly infringe the rights of record companies and artists,” said IFPI Chief Executive Frances Moore. “Today, music companies and licensed digital services work together to offer fans more options than ever before to listen to music legally, when and where they want to do so – hundreds of services with over 40 million tracks – all while compensating artists and labels. Stream ripping sites should not be allowed to jeopardise this and we will continue to take action against these sites.”

“This is a significant win for millions of music fans, as well as music creators and legitimate music services,” said Cary Sherman, Chairman and CEO, RIAA. “One of the world’s most egregious stream ripping sites has shuttered. Sites like these undermine the health of the legitimate marketplace and the livelihoods of millions of music creators worldwide. The swift and successful conclusion of this case should send an unmistakable signal to the operators of similar sites.” 

“This illegal site wasn’t just ripping streams, it was ripping off artists,” said Geoff Taylor, Chief Executive BPI. “Most fans understand that getting music from a genuine site supports the artists they love and allows labels to nurture the next generation of talent.  Music stands on the cusp of an exciting future in the streaming age, but only if we take resolute action against illegal businesses that try to siphon away its value.”

Piracy, and particularly stream ripping, remains a significant concern in Canada. A survey commissioned by IFPI in 2016 found that 27% of Canadian respondents reported pirating music, and 22% reported doing so via stream ripping. The age group most likely to use stream ripping sites was 16-24 year-olds, with 48% reporting doing so in the past year. While Youtube-mp3.org was the largest stream ripping site, the industry hope is that this legal action will send a clear message to other sites still in operation that they are breaking the law, and will face similar action if they do not shut down.

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Canada climbs to sixth largest global recorded music market in IFPI’s Global Music Report 2017

Toronto, ON – April 25, 2017:   Today the International Federation for the Phonographic Industry (IFPI) released its Global Music Report 2017, which shows Canada is now the sixth largest recorded music market on the planet, surpassing Australia.

The annual Global Music Report compiles revenues from physical and digital sales, streaming, synchronization and performance rights, to provide a ‘state of the industry’ snapshot while highlighting innovation and investment within the industry as it progresses further into the digital age.

Highlights of Canada’s 2016 music revenues:

  • Overall recorded music revenues rose 12.8% in 2016 and totalled CAD $489.4 million
  • Digital music revenues accounted for 63% of recorded music revenues in 2016
  • Total streaming revenues, including subscription and ad-supported streaming, more than doubled in 2016, rising from USD $49.82 million to an impressive USD $127.8 million
  • Subscription audio streaming generated the majority of all streaming revenues in 2016 at USD $94.45 million, compared to USD $15.72 million from ad-supported audio streaming and USD $17.59 million from video streams
  • Digital revenues grew to USD $233 million in 2016, up from USD $170 million in 2015
  • Revenues from physical sales continue to decline, falling to USD $99 million in 2016 from USD $114.4 million in 2015

Though music consumption around the world continues to rise to never-before-seen levels, the “value gap” remains a significant problem, as the revenues returned to music creators have not kept pace with music consumption.

“I am happy to see Canada regain its position as the sixth largest recorded music market in the world,” said Amy Terrill, Executive Vice President of Music Canada. “While the growth in overall revenues, driven by a huge increase in subscription audio streams is very encouraging, the music community must remain united and vigilant in fixing the value gap. I urge the Canadian federal government to put creators first in any future policy decisions, such as the upcoming Copyright Act review in 2017, so that creators can be properly compensated for the record levels of music consumption we’re witnessing.”

“The whole music community is uniting in its effort to campaign for a legislative fix to the value gap and we are calling on policymakers to do this,” said Frances Moore, chief executive of IFPI, in the report release. “For music to thrive in a digital world, there must be a fair digital marketplace.”

Key figures from global recorded music revenues:

  • Global revenue growth: +5.9%
  • Digital share of global revenues: 50%
  • Digital revenue growth: +17.7%
  • Growth in streaming revenues +60.4%
  • Physical revenues: -7.6%
  • Download revenue: -20.5%

Canada’s ascension to the sixth largest market follows IFPI’s announcement in February that Drake was named Global Recording Artist of 2016. Justin Bieber and The Weeknd took the number five and number ten spots, respectively, as Canadians occupied three of the top 10 positions.

Today’s Global Music Report 2017 shows that albums by Canadian artists performed very well at home in 2016, with six of the top ten album spots occupied by Canadian artists, including Drake’s Views at number one. Other Canadians in the top albums chart include Céline Dion, Leonard Cohen, Justin Bieber, The Weeknd, and The Tragically Hip.

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Drake named IFPI’s Global Recording Artist of the Year as fellow Canadians Justin Bieber and The Weeknd reach the Top 10

Today, the IFPI announced that Toronto hip hop artist Drake is the recipient of the IFPI 2016 Global Artist of the Year Award, which recognizes an artist’s worldwide success across physical and digital formats, including downloads and steams. Drake is the first Canadian to receive the award, and the fourth recipient since its launch in 2013.

Joining Drake in the Top 10 chart are fellow Ontarians Justin Bieber and The Weeknd, who reached #5 and #10, respectively. All three artists also appeared in the 2015 Global Top 10 chart.

“I’m delighted to be able to honour Drake as the IFPI Global Recording Artist 2016,” says IFPI chief executive Frances Moore in a release. “Drake’s phenomenal success reflects how deeply his unique sound appeals to an enormous global audience. The Global Top 10 list features a number of amazing artists, and the variety and vibrancy of their art speaks volumes about the exciting state of music today.”

Drake’s 2016 Double Platinum album Views became the first album to reach one billion streams on Apple Music, while the album’s single and summer smash “One Dance” became the first song to be played one billion times on Spotify. In 2015, Drake appeared at number nine on the list.

Justin Bieber, whose 2015 album Purpose contained multi-Platinum singles like “Sorry,” “Love Yourself,” and “What Do You Mean?” lands in the fifth position, allowing for two Canadian artists to appear in the top five. This is the second consecutive year the Stratford, Ontario native has appeared on the list, after reaching the number four spot in 2015.

Multi-Platinum R&B sensation and Scarborough, Ontario native The Weeknd, who released his Platinum-certified album Starboy in late 2016, was announced as the number ten artist, matching his 2015 position on the chart. While his album JUNO Award winning album Beauty Behind The Madness was released in 2015, The Weeknd, born Abel Tesfaye, continued to see success through the start of 2016 with the album’s singles “Can’t Feel My Face,” “In The Night,” and “The Hills.”

One Direction were the first group to be named Top Artist by IFPI when the list began in 2013, which also included Canadian Michael Bublé in the ninth spot. Taylor Swift earned the award in 2014, and in 2015, IFPI named Adele as the top global recording artist, who appears at number four in 2016.

Click here more for information on IFPI’s results, and view the full list below.

Top 10 Global Recording Artists of 2016

  1. Drake
  2. David Bowie
  3. Coldplay
  4. Adele
  5. Justin Bieber
  6. Twenty One Pilots
  7. Beyoncé
  8. Rihanna
  9. Prince
  10. The Weeknd
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IFPI Releases Investing in Music Report

The International Federation of the Phonographic Industry (IFPI), representing the recording industry worldwide, released a new report today, Investing in Music: The Value of Labels. The report highlights the important role that labels play in the global music industry. They are the primary investors in music; record labels discover and nurture artists, produce and promote music, and connect artists with their fans.

ifpi2016report-smallAccording to the report, labels remain the largest investor in music, maintaining tens of thousands of artists on global rosters, and investing 27 percent of their revenues—US$4.5 billion—in artists around the globe. “That’s an incredible figure that reflects their commitment to artists and the future of music,” says the report. “No other segment of the music sector invests in artists on anything like this scale.”

Jointly introducing the report, Frances Moore, Chief Executive of IFPI and Alison Wenham, CEO of WIN, said: “Investing in Music highlights not just record companies’ financial investment in artists, but also the enduring value they bring to artists’ careers.  In the digital world, the nature of their work has evolved, but their core mission remains the same: discovering and breaking new artists, building their careers and bringing the best new music to fans. These are the defining qualities of record companies’ investment in music.”

Here are the key highlights of the Investing in Music report:

Music does not just happen … it requires hard work and substantial investment. Record companies are responsibly for discovering and nurturing artists, producing and promoting their music and other forms of creative output, and connecting artists with fans in new and innovative ways. According to the report, it costs somewhere between US$500,000 and US$2 million to break a new act in a major market.

Record labels are the primary investors in music. Music companies invest US$4.5 billion annually in discovering, nurturing, and promoting artists. No other segment of the music sector invests in artists on anything like this scale, and this investment has been sustained even as the music industry weathered two decades of revenue decline.

Breaking down labels’ US$4.5 billion annual investment. This significant investment is broken down into two primary areas: A&R (or artists & repertoire), which is the discovery and development of artists, and marketing campaigns which promote artists and their music.

Developing the digital market. Record companies have invested heavily in the fast-developing infrastructure of the digital market. There is a complex system of digital licensing services which requires a substantial investment from music companies to track and distribute recordings.

Unlocking new revenue streams. Record companies invest in new revenue streams, such as licensing tracks for movies and TV, giving artists that have broken through to an audience new sources of income. A record company may have as many as 200 long-term brand partnerships active on behalf of their artists at any point in time.

The full report is easily accessed on this interactive website.

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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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New global consumer research by IFPI includes Canadian figures

ifpi-ipsos-report-smallToday, IFPI released new consumer research from Ipsos that provides insights into music consumption trends around the world.  Ipsos studied thirteen markets, including Canada.  Internet users aged 13 to 64 were asked to comment on how they engage with music.

According to this research, Canada stands out as lagging behind other major markets in the consumption of music and adoption of paid services. However, 2015 sales stats released by Music Canada in April show explosive growth in premium subscription services, largely as a result of new entrants into the Canadian market.

The full global report and summary are easily accessed on the IFPI site.

Here are the key global highlights according to IFPI with Canadian comparisons:

“Paid audio streaming is growing: 71 per cent of internet users aged 16-64 access licensed music. Paid audio streaming services are growing in popularity, especially among under 25s. One-third of 16-24 year olds now pay for an audio streaming service.”

In Canada, only 2/3 (64%) of internet users engage with licensed music.

Audio streaming consumption continues to lag behind in Canada where only 27% of consumers are using audio streaming services, indicating an opportunity for significant further growth.  However, 11% are paying for it (as opposed to using free audio streaming services) which is up from 2015 (9%), a 22% increase.  Globally, the 2016 numbers are 37% and 18% respectively.

Markets like Mexico (64%) and Sweden (61%) stand out as leading the conversion to audio streaming, and in each of these 4 in 10 consumers are paying for streaming.

“YouTube is the most used music service: 82 per cent of all YouTube visitors use it for music. More people use YouTube to consume music they already know than to discover new content.”

Not unlike other markets, YouTube usage is very high in Canada.  86% of internet users in Canada used YouTube in the last 6 months for any content with 76% reporting using it for music related content.  Most of those users (85%) accessed YouTube for music they already know, rather than to discover new music.  The report concludes that free video streaming is mainly being used as an alternative to paying for music, as 49% of music video streamers do so mainly “because it’s free.”

“Copyright infringement remains a significant problem: more than one-third (35 per cent) of internet users access unlicensed music content. Infringement is changing, with half (49 per cent) of 16-24 year olds using stream ripping services to download music.”

Access to piracy continues to evolve in Canada as well with more consumers choosing stream ripping over downloading (cyberlocker/peer to peer).  Almost one third of all consumers (27%) continue to access unlicensed content.  Half of all 16-24 year old consumers report stream ripping.

“Young people are highly engaged with music, with 82 per cent of 13-15 year-olds listening to licensed music and the majority willing to pay for music.”

In Canada, 13-15s are far more likely to access licensed audio services (55%) and one quarter of them (25%) choose paid streaming.  Half of all 13-15s access pirated music (49%) with downloading (40%) and stream ripping (44%) receiving close to equal attention.

“Smartphones are moving towards replacing computers as the most used device for music consumption, especially in developing countries. Users of paid audio streaming services are particularly likely to listen to music on a smartphone.”

Complete results can be found in this IFPI report.

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