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Music Canada applauds Ministers Bains and Joly for initiating the statutory review of Copyright Act

Toronto, Dec 13, 2017: Music Canada applauds today’s announcement by The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, in conjunction with The Honourable Mélanie Joly, Minister of Canadian Heritage, regarding the review of the Copyright Act, to be conducted by the Standing Committee on Industry, Science and Technology.

“I applaud Minister Bains and Minister Joly for initiating this review of the Copyright Act,” says Graham Henderson, President and CEO of Music Canada. “Music creators, and all creators who depend on copyright, deserve a Copyright Act that protects their rights when their works are commercialized by others. This is our chance to address the Value Gap threatening the livelihood of Canadian creators and the future of Canadian culture.”

Music Canada recently examined the significant changes in business models that are impacting the value chains for copyrighted content in our report, The Value Gap: Its Origins, Impacts and a Made-in-Canada Approach.

“A modern copyright framework containing strong IP and copyright provisions is essential for an effective marketplace for music creators,” says Artist Advocate Miranda Mulholland. “This Copyright Act review is an important first step in ensuring artists and labels are able to earn a fair market value for their work. Canadian creators have been eagerly awaiting this review.”

Music Canada looks forward to participating in the process to ensure that creators are fairly compensated for the use of their works under the revised Act.

Adds Henderson, “We must ensure this review yields meaningful results.”

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For more information:
Corey Poole, Music Canada
cpoole@musiccanada.com
+1 (647) 808-7359

About Music Canada
Music Canada is a non-profit trade organization that represents the major record companies in Canada: Sony Music Entertainment Canada, Universal Music Canada and Warner Music Canada. Music Canada also works with some of the leading independent record labels and distributors, recording studios, live music venues, concert promoters, managers and artists in the promotion and development of the music cluster. For more on Music Canada, please visit www.musiccanada.com

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Miranda Mulholland and 100 fellow creators call for real and meaningful reform to the Copyright Board of Canada

In August of 2017, Canada’s Innovation, Science and Economic Development Minister, Navdeep Bains, in conjunction with Mélanie Joly, Minister of Canadian Heritage, announced the launch of consultations on reforming the Copyright Board of Canada. According to the government’s release, the goal of Copyright Board reform is to “enable creators to get paid properly and on time.”

Miranda Mulholland is a violinist, singer, label owner, and the recipient of Music Canada’s inaugural Artist Advocate Award for her outstanding achievements in advocating for the rights and livelihoods of music creators. One of those achievements is becoming the first creator to deliver a keynote address to the Economic Club of Canada. Another is rallying her fellow musicians on the importance of reforming the Copyright Board and her submission of two letters to the Canadian government.

The first letter was submitted on behalf of “Canadian musicians, independent label owners and creative entrepreneurs – at all stages of their careers” 100 of whom added their names. The letter states “While only part of our income comes from royalties collected by collective societies, the rates set by the Board directly impact the value of our music, and our ability to earn a living from it.” The letter specifically supports three options outlined in the consultation’s Discussion Paper and points out that while the role of the Board has evolved, “at the end of the day, the Board is valuing our work, and setting rates that affect our livelihoods.”

The second letter was submitted to Prime Minister Justin Trudeau, and in addition to the list of supporting names, is signed directly by Mulholland, Jim Cuddy, Alan Doyle and Joel Plaskett. It stresses the need for real and meaningful change at the Board, calling for tariffs to be set faster and more in line with market values, and also thanks the government for embarking on the long overdue reform process.

You can read Miranda’s letters below, which are also available on the advocacy section of her website.

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Music Canada applauds the Government of Canada for initiating consultations on Copyright Board of Canada reform

August 9, 2017, Toronto:  Music Canada applauds today’s announcement by The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development, in conjunction with The Honourable Mélanie Joly, Minister of Canadian Heritage, that the government has launched a consultation process to reform the Copyright Board of Canada. The consultations will run until September 29, and will seek public feedback on ideas to make the Copyright Board’s processes more transparent and more efficient.

“Music Canada applauds Minister Bains and Minister Joly for beginning these consultations on Copyright Board reform,” says Graham Henderson, President and CEO of Music Canada. “The time is right to modernize the Board, which will better support music creators and advance Canada’s innovation agenda. A more efficient and predictable regulatory environment will help spur growth for Canada’s cultural industries and the creative class.”

Music Canada has been a lead advocate for change at the Copyright Board. Music Canada participated in both the Senate hearings on the Copyright Board, and the Standing Committee on Canadian Heritage’s Review of the Canadian Music Industry, appearing as a key stakeholder witness in favour of full and meaningful reforms. Graham Henderson also raised the issue in a recent Policy Options op-ed, and cited the repair of the Copyright Board as first priority for government to modernize in a speech before the Economic Club of Canada.

Today’s announcement follows the release of a 2016 report by the Standing Senate Committee on Banking, Trade and Commerce titled Copyright Board: A Rationale for Urgent Review. The thorough and comprehensive report concluded that the Board is “dated, dysfunctional and in dire need of reform.”

During the Senate committee hearings that led to the report, stakeholder and expert witnesses all identified the lack of timely decision-making as the biggest challenge in relation to the Board, and there was wide-spread consensus on the need for urgent, meaningful reform. The Senate report notes that, “On average, the Board may take between 3.5 and 7 years to make a final decision, the result of which is uncertainty and diminished economic activity within Canada’s cultural sector.”

Music Canada looks forward to continuing to work with government on this timely file to develop a regulatory framework for the Board that fosters innovation so that our cultural industries can thrive.

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For more information:

Corey Poole, Music Canada
cpoole@musiccanada.com
+1 (647) 808-7359

 

About Music Canada

Music Canada is a non-profit trade organization that represents the major record companies in Canada:  Sony Music Entertainment Canada, Universal Music Canada and Warner Music Canada.  Music Canada also works with some of the leading independent record labels and distributors, recording studios, live music venues, concert promoters, managers and artists in the promotion and development of the music cluster.

 

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Photos: Scott Helman and Vincent Vallières shine at Capital Beat

Parliament Hill was alive with the sound of music last week, as the inaugural Capital Beat event brought together parliamentarians, Hill staff, and media for a non-partisan celebration of Canadian music. Presented by Music Canada and Quebecor, Capital Beat featured performances by Scott Helman and Vincent Vallières, as well as remarks by special guest speaker The Honourable Mélanie Joly, Minister of Canadian Heritage.

Also sponsored by TD Bank Group and Stingray Digital, Capital Beat took place at the National Arts Centre, where invited guests enjoyed the performances in an intimate setting. DJ del Pilar provided music before the event as well as at the afterparty.

“Tonight we are here to acknowledge the importance of music – music unites us – it inspires us – it makes us smarter and allows us to tell our stories,” said Amy Terrill, Executive Vice President of Music Canada in her opening remarks. “It builds our communities and heals our wounds.”

“It is both a pleasure and an honour for Québecor to help foster an exchange between artists, politicians and industry people but, most of all, we are happy to bring these remarkable musical talents to the attention of our nation’s parliamentarians,” said J.Serge Sasseville, Québecor’s Senior Vice President, Corporate and Institutional Affairs, in a release the day of the event.

Prior to the show, both Scott Helman and Vincent Vallières, as well as their label and management teams, were treated to a tour of Parliament by Julie Dabrusin, MP for Toronto-Danforth and member of the Standing Committee on Canadian Heritage.

 

A selection of attendee reactions to the show are embedded below. For additional photos, see our album on Facebook.

https://twitter.com/KWSasseville/status/864653603323219970

https://twitter.com/KWSasseville/status/864666866819661824

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Department of Canadian Heritage releases #DigiCanCon consultation report

On February 21, the Department of Canadian Heritage released its Canadian Content in a Digital World consultation report. The government commissioned the independent data analysis firm Ipsos to synthesize the information gathered from the DigiCanCon consultations. The results contained in the report are described as a thematic overview of submissions received.

The television and film industries are thoroughly discussed, and while the report doesn’t contain many direct mentions of music, some sections have a strong focus on creators and the need to showcase Canada’s cultural sector at home and abroad, as well as “a need to ensure that Canadian creators share in the financial rewards resulting from increased dissemination of cultural content via digital channels.”

The report identifies three main principles that arose during the consultations, and positives for the creative community can be drawn from the feedback the government received related to each of these principles:

  1. Focusing on citizens and creators

This principle involves supporting creators through skills development and ownership protection, investing in creators with a re-evaluated funding model to allow broader access, and respecting citizen choice to afford all Canadians with access to a diverse body of cultural content.

  1. Reflecting Canadian identities and promoting sound democracy

A sentiment expressed by many during the consultations was that “the Canadian ‘brand’ should reflect the diversity of both Canada’s cultural and ethnic populations and also Canada’s geography and landscape.” Per the report, “there was general agreement that a robust Canadian cultural offering contributes to a strong Canadian identity which in turn breeds engaged citizens.” This is how many participants felt that culture can promote a sound democracy.

  1. Catalyzing economic and social innovation

How to create a cultural ecosystem that fuels growth of the middle class was one of the questions the government sought to answer. While participants reportedly had difficulty expressing how a thriving cultural sector would benefit the middle class, it’s important to remember that many members of the creative class earn an income below the poverty line from their creative work. Independent musicians earned an average of $7,228 per year from music-related activities in 2011. In many respects, a strong creative class contributes directly to a strong middle class. This is one of the main reasons the Focus On Creators coalition exists – to ask the government to put creators at the heart of future policy so they can earn a reasonable living from their work, and BE part of the middle class.

We were very encouraged by one of the “next steps” identified by the government to “through both public policy and perception, reposition the cultural sector as an engine of economic growth and innovation in Canada.” We firmly believe that music has incredible potential as a driver of economic growth and job creation and we’re committed to spreading this message.

One of the key themes of the consultations, identified on page 10, is “Modernizing Canada’s legislative framework and national cultural institutions.” According to the report, the Copyright Act was one of the institutions that participants said has “not kept pace with the shifting digital environment and should be examined.” The upcoming government-mandated Copyright Act review in 2017 was identified as a vital opportunity for Canada to stand up for creators, noting that “most agreed that changes to IP legislation that divert the flow of revenue back to the hands of the idea generators is essential to the future of the cultural ecosystem in Canada.” The Copyright Act is also included as a legislative framework in the government’s “federal cultural policy toolkit.” We hope that the opportunity presented by the 2017 Copyright Act review is used to its full potential to benefit Canada’s cultural industries.

Although it was not mentioned in the Ipsos report, The Copyright Board of Canada also has enormous potential to act as a business development force for our cultural industries. In a report released in December of 2016, The Standing Senate Committee on Banking, Trade and Commerce stated “The Copyright Board of Canada plays a pivotal role in Canada’s cultural sector. Yet, from what the committee heard, the Board is dated, dysfunctional and in dire need of reform.” The Senate committee report recommended that an “in-depth examination of the Copyright Board of Canada’s mandate, practices and resources” be included as part of the 2017 Copyright Act review.

Music Canada would like to commend Minister Joly and the Department of Canadian Heritage for undertaking such a thorough consultation at this crucial moment in time for Canada’s cultural industries. We are very encouraged by the commitment to creators displayed by both the government and participants in the consultation, and we are hopeful that these consultations will result in new policies to better support our creative industries in the digital age.

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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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Canada’s creative industries to host Thought-Leadership Event on 2017 Copyright Act review in Ottawa

thoughtleadershipevent

UPDATE – NOV 30, 12:54PM: Due to extreme weather, this event had been postponed to a future date.  Further updates will be provided when available.

Ottawa, ON – November 30, 2016:  Creative industries that rely on the Copyright Act are holding a thought leadership event today in Ottawa in preparation for the upcoming government-mandated review of the Act in 2017.

Creators and rights holders in the music, book-writing and newspaper sectors will convene with Members of Parliament and decision-makers in Ottawa. The event is intended to unite Canada’s major cultural sectors as they discuss how legislative, program and policy improvements can help their industries grow and prosper in the digital age.

The rules governing the digital environment were established twenty years ago, with the intent of supercharging the digital marketplace – to be a boon to both creators and the public. But the reality is that within the span of a single generation, the creative middle class has virtually ceased to exist.

Independent artists earned an average of $7,228 per year from music-related activities in 2011; not nearly enough to allow them to pursue a music career full-time. Taking inflation into account, writers made 27 percent less in 2015 than they did in 1998 from their writing. With average writers’ revenues that fall below the poverty line, the Writers’ Union of Canada says that writers will increasingly abandon their craft for other employment. The average income of a playwright in Canada, in 2004, was less than $10,000.

On November 29th, a joint letter addressed to the Honourable Mélanie Joly, Minister of Canadian Heritage, urged the government to put Canada’s creators at the heart of our cultural policy. The letter was signed by nearly 1,100 Canadian musicians, songwriters, composers, music producers, authors, poets, playwrights, film composers, actors, directors, visual artists and other members of the creative class.

The letter is sure to be a topic of discussion at the event, as Canada’s cultural industries further unite to ensure our creators can continue to tell Canadian stories to the world and global stories to Canadians. Music Canada will be live-streaming the event, so please look out for the video link on our Facebook and Twitter pages.

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Canada’s creative industries join together to form Focus On Creators coalition, release joint letter to Heritage Minister Mélanie Joly

focus-social-facebookA growing list of nearly 1,100 musicians, authors, songwriters, composers, music producers, poets, playwrights, film composers, actors, directors and other members of the creative class have signed a joint letter addressed to the Honourable Mélanie Joly, Minister of Canadian Heritage, urging the Canadian Government to put creators at the heart of our cultural policy.

The impressive list of signatories on the letter includes Alanis Morissette, Brett Kissel, Blue Rodeo, Gord Downie, Gordon Lightfoot, Grimes, Metric, The Sheepdogs, Marie Claire Blais, Rudy Wiebe, Guy Gavriel Kay, Sharon Pollock, Daniel David Moses, Mary Vingoe, Garth Richardson, Gary Barwin, Alice Major, Maureen Hynes and many more.

The following is a passage from the joint letter:

The carefully designed laws and regulations of the 1990s were intended to ensure that both Canadian creators and technological innovators would benefit from digital developments. We hoped that new technology would enrich the cultural experiences for artists and consumers alike. Unfortunately, this has not happened. Instead, our work is increasingly used to monetize technology without adequately remunerating its creators. Income and profit from digital use of our work flow away from the creative class to a concentrated technology industry.  Allowing this trend to continue will result in dramatically fewer Canadians being able to afford to “tell Canadian stories,” much less earn a reasonable living from doing so.

Canadian creators are encouraged to add their names to the letter on the initiative’s website, www.focusoncreators.ca, to help send this important message to policymakers in Ottawa.

The Focus On Creators coalition was formed to bring focus to the artists’ perspective in light of some major federal cultural policy activities, including the Canadian heritage review, and the upcoming Copyright Act review in 2017. These activities present a timely opportunity to re-establish a fair working environment for creators.

Focus On Creators has widespread support from Canada’s creative industries. The initiative’s supporting partners are:

  • Music Canada
  • The Canadian Independent Music Association (CIMA)
  • The Writers’ Union of Canada
  • The League of Canadian Poets
  • The Canadian Music Publishers Association
  • The Playwrights Guild of Canada
  • The Canadian Country Music Association

On November 30, 2016, creators and rights holders in the music, book-writing and newspaper sectors will convene with Members of Parliament and decision-makers in Ottawa for a Thought Leadership Event hosted by industries that rely on the Copyright Act. The event is intended to unite Canada’s major cultural sectors as they discuss how legislative, program and policy improvements can help their industries grow and prosper in the digital age. Music Canada will be live-streaming the event. Look out for the link on our Facebook and Twitter pages.

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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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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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