COMMENTARY: COPYRIGHT BILL NEEDS FIXING Glenn O’Farrell – CARTT Anyone who has seen the straightforward process of transferring music onto a radio station’s hard drive is left to wonder: “Is that all there is?” But this simple, everyday process continues to needlessly cost Canada’s radio broadcasters millions of dollars in copyright fees annually because of the inability or the unwillingness on the part of the government to create fair copyright legislation.
When the government tabled its new copyright bill (C-60) at the end of the parliamentary session, broadcasters were stunned to see that it introduced more transfer of format payments. Copyright fees have already skyrocketed over the past few years, to the point that they are increasingly hampering the ability of some broadcasters – especially those in smaller markets – to remain viable.
Broadcasters annually pay $7 million in transfer of medium fees over and above the $43 million in other copyright fees they already pay for the rights to play music on their stations. These fees exist in spite of the fact that the digitization of music creates no new revenues, and radio stations do not make any new use of the music in this format. The transfer to a digital file is remarkably similar to the old practice of transferring music from vinyl records to magnetic audio tape cartridges (“carts”), a practice that radio used for years without being levied.
The idea espoused by some in recent reports on this issue that broadcasters “choose” to go digital is disconnected from reality. The image of a “disc jockey” surrounded by stacks of CDs is as antiquated to the broadcast industry as a horse and buggy is to the taxi industry. The digital control booth is now the basic operating procedure throughout the worldwide broadcast industry. Digital sound files, whether if they are songs, commercials, or news reports, are the standard for broadcasters, and have been for some time. In fact, record companies expect to distribute to radio most of their new music this year – some 70 to 75% of new recordings – as digital files.
When the idea of copyright levies was initially being reviewed in 1996, copyright collectives seemingly had little need for them. David Basskin, head of the Canadian Musical Reproduction Rights Agency (CMRRA) – the chief beneficiary of these transfer of medium fees – stated the following before a House of Commons committee on November 7, 1996:
“Music publishers recognize that such copying [i.e. radio's transfers of format] is integral to the operation of radio stations...”
Furthermore, in response to a question at the same committee, Basskin added:
“On the radio side, we don't seek to change the status quo. If that results in an agreement at a very low or gratis rate, I think we'd be entirely happy.”
Now, however, Mr. Basskin defends these levies, noting what he believes are vast savings for radio stations involved with digitizing music. But the picture he paints of a radio station – where librarians ran up and down the hall with carts full of discs, and where discs would roll under cabinets and go missing – misses the mark by a country mile.
Canada’s private broadcasters are not looking to take money from artists. In fact, nobody supports music artists as much as private radio, not only through the Canadian Talent Development (CTD) regime that has allocated more than $21 million since 1999 to organizations associated with talent development, such as FACTOR and MusicAction. Private radio drives CD sales and provides on-air promotion of tours and musical events, as well as providing name and song recognition to artists who often have little to no promotional resources.
Private radio broadcasters have also contributed to talent development through the establishment the Radio Starmaker Fund and Fonds RadioStar, artist-focused initiatives providing marketing and promotion assistance to performers as part of an overall strategy to achieve the industrial goal of developing a strong supply of commercially playable music. Since 2000, the Radio Starmaker Fund has contributed more than $15 million dollars to English Canadian artists, while the Fonds RadioStar has contributed more than $7.5 million to francophone artists. These funds are key components in making sure that artists have every opportunity to succeed, and that the Canadian music scene continues to thrive.
It should also be noted that Canada is the only country in the world where private radio directly subsidizes the music industry and recording artists. Moreover, when one accounts for all the funds provided by FACTOR, MusicAction, Radio Starmaker Fund and Fonds Radiostar, private radio’s contribution to Canadian talent development often exceeds the funding provided by government sources.
Other countries, including the United States, have already provided copyright exceptions to their broadcasters to allow them to transfer files to their hard drives. Canada is a country that prides itself on its innovation agenda. So why is our government making policy that leaves us lagging further and further behind?
Glenn O’Farrell is president and CEO of the Canadian Association of Broadcasters |