The Canadian Association of Broadcasters would like to clarify some misleading statements that have been made recently regarding private broadcasting and copyright.
Broadcasters agree that artists and musicians should be paid for their work. That is why we paid out $115 million last year, $64 million to play music and $51 million in Canadian Content Development funding. The reproduction right is an additional payment that only came about for the first time in 2003 and increased by 144% after Bill C-32 was tabled in 2010. Most of the money paid pursuant to the reproduction right does not go to musicians. In fact, this was made abundantly clear in testimony before the Bill C-32 Legislative Committee.
Some have claimed that digital copying saves us money and therefore we should pay for reproduction rights. Because of technological advances, the recording industry in Canada has shifted music delivery to broadcasters from a CD-based system to a digital system. This digital shift saves the recording industry significant distribution expenditures, money they used to spend on representatives whose job was to travel to radio stations with physical copies of the music and secure valuable promotional airtime. They no longer have to employ these people, and they no longer have to produce costly CDs. At our end, broadcasters have invested considerable amounts of time, money and equipment to meet the demands of the digital era, including upgrades to programming equipment, servers, and highly qualified staff. In return, the quality of programming has also increased. The IT professionals required to manage the digital transition are a scarce and valued resource. It is naïve to imagine that the requirement to hire IT professionals is cost efficient.
It is a myth to think that the reproduction right payments made by radio broadcasters go to “budding young artists and musicians”. Young artists and musicians are proudly supported by radio airplay and promotion as well as Canadian Content Development funding. Critical public policy decisions should be based on an accurate assessment of the true relationship between different stakeholders, not glib assumptions based on one-sided propaganda.
There has been much discussion about the outflow of royalties to foreign multinationals. The primary reason for this is the certification by the Copyright Board of a reproduction right tariff for AVLA-SOPROQ, the collecting society that represents major record labels. At $10 million in royalties, almost half of the total $21 million goes to the record labels.
Critics have argued that the outflow is attributable to the fact that radio stations play foreign music. The truth is, there is a healthy cross-flow of copyright payments between countries for the performance right. When a Canadian radio station plays an American artist, the American artist (or whomever has been assigned contractual rights by the artist) is entitled to receive royalty payments through the relationships set up between collecting societies. The same happens in reverse when an American radio station plays a Canadian artist. Since the reproduction right is subject to an exception in the United States, money only flows from Canada to the United States under the current form of the Copyright Act. The same applies for most of the G-8 countries since they also provide a reproduction right exception to their broadcasters.
It has also been said that the outflow could be stopped if Canadian radio just played more Canadian music. This is a problematic over-simplification. Canadian radio currently plays over 35% Canadian music in English markets and in the range of 60% Canadian music in French markets. Canadian broadcasters try to play the best balance of Canadian and foreign music to meet the demands of their listeners. The level of Canadian music played far exceeds, for example, the amount of Canadian film productions shown in Canadian cinemas. Canadian private broadcasters are proud to showcase Canadian talent but consider any demand to disengage from listener preferences to be questionable from a business perspective. Ultimately, the current health of Canada’s private broadcasters arises from their ability to produce content that listeners demand. This in itself increases the visibility of Canada’s musicians and has helped propel them to international success. The tariffs are set as a function of revenue, which means that when radio does well, artists also benefit. A tax on innovation which sends most money out of the country does nothing to enhance the well-being of artists in Canada.