Chris Byrnes – ByrnesMedia
You may be aware that there are high level meetings going on in Ottawa currently, the outcome of which could impact the financial performance of the radio industry. To give this some context we have to go all the way back to 1997 when amendments were proposed to the copyright laws in Canada. These amendments resulted in the broadcast industry paying additional tariffs for the rights to play music. But since 2001 broadcasters have been paying additional fees for the rights to transfer music recordings to hard drives. To provide some further context, here is the timeline of the various changes to the tariffs since 1997:
1997 – Original Bill C-32 tabled and passed to amend Copyright Act. At that time, the Liberal Government planned on giving broadcasters an exception from potential reproduction right liability. At the last minute, a Bloc MP insisted that the Bill be amended to allow reproduction right-based tariffs to arise if a collective were formed to collect the right.
2000 – SODRAC in Quebec followed by CMRRA in the rest of Canada tabled tariffs for the reproduction right for the years 2001-2004.
2003 – Copyright Board releases decision relating to first reproduction right tariff. The rate was set at just under 1% of revenues, worth around $5M per year at that time.
2007 – AVLA and SOPROQ, representing the recording industry, table additional reproduction right tariff valued at 4% of revenues.
2008 – ArtistI, representing performers, tables another reproduction right tariff, value undetermined at that time.
2009 – Copyright Board holds largest tariff proceeding ever, relating to all possible radio tariffs including the three sets of reproduction right tariffs.
2010 – Copyright Board decision released. Rate set at a combined 2.5% for the reproduction right, valued at approximately $21M per year for the industry.
2010 – New Bill C-32 tabled by Conservatives, with a provision that seeks to limit or eliminate reproduction right liability. Opposition parties, lead by the Bloc, oppose broadcaster amendment.
This matter now forms part of a new copyright bill that was tabled in Parliament in June of last year called Copyright Bill C-32 which was then referred to a Select Committee who have been sitting since November. Originally, the language of this Bill was to provide an exemption for broadcasters to make incidental reproductions in their studios such as wav to mp2, buffer copies, etc and reduce or eliminate existing tariff liabilities. A more recent proposed amendment by a Bloc MP, and at this stage supported by a number of Liberal and NDP members, would require broadcasters to continue to pay the additional fees to the same rights holders to broadcast music. But what is not fair is paying even more fees, often to the same off shore companies, to transfer music from its original format to a computer hard drive within the radio station.
This Bill may not pass because the Opposition is trying to stall the Bill to make the Government look ineffective. I am also told that this Bill has been one of the most heavily lobbied in Canadian history, so clearly there is a lot of interest in the outcome from all sides and the stakes are high. If it gets held up long enough, or an election is called, then the Bill will die and broadcasters will continue to pay these additional fees. As it currently sits in Committee, the amendment, as proposed, does not actually give broadcasters the exception needed to simply identify the technical formats that are required internally to run our operations. Instead, the language supports a further tax for which there is only a further benefit to the large collectives that are already getting full fare. But when you look more closely, these “incidental reproductions” are not “incidental” at all. They add up to $21 million on an annual basis that Canadian broadcasters pay each year and that is on top of the current assessment of $64 million already paid to these same rights holders. This is what is impacting broadcasters’ bottom line which may force broadcasters to reduce services and/or staff numbers. To be clear, the Bill as it stands may see some reduction in this $21 million payment, but the intent by the Conservatives was to give Broadcasters a full reduction. If the CAB is successful in changing the language slightly then we may get some or all of these fees removed.
To make matters worse, this additional $21 million does not flow directly to Canadian artists, which many MP’s have been told is actually the case. Rather, these funds actually flow into multiple collecting societies to cover their administration costs, and the trickle down dollars are then distributed to artists both domestically and internationally. Very little of this $21 million will ever find its way to Canadian artists.
The CAB supports the rights of creators and artists to be fully reimbursed for their efforts. This is not an effort by private broadcasters to emasculate the rights for compensation to those who create Canadian musical content that is played on our air-waves. What we cannot afford to see happen is a piece of legislation that does not remove this annual levy that exists on top of the current costs to try and placate large collectives. The proposed designation of this legislation (Modernization Act) sums it up entirely, in that broadcasters air the content.
But we are now hearing that the Liberals, lead by MP Pablo Rodriguez, want to include some last minute amendments to the Bill that would cost broadcasters millions of dollars if passed. To that end, the CAB has produced a 30 second PSA and is asking all broadcasters to air it until March 13. On Thursday March 3, two panels of broadcasters will appear before the Select Committee to make a presentation and answer questions. (The link to listen to these hearings will be posted on our website at www.ByrnesMedia.com.) According to the CAB, broadcasters need to show support for the Copyright Bill as strongly as possible to help it pass, or we may be faced with long delays and a watered down Bill that will result in broadcasters paying even more for the rights to play music on the radio. Here is what the PSA says:
Local radio is an important part of your community. But now local radio in Canada may be threatened if Copyright Bill C-32 is not passed as introduced by the Government. This much needed Bill may fail because the Liberal Party wants an amendment that would have your local radio station send money to big recording companies outside Canada. This money should stay in Canada to develop your local radio programs. Help pass Bill C-32. Keep local radio alive. Contact your MP or visit www.isupportmylocalradio.ca.
Bill C-32 takes some important steps towards making Canada’s copyright laws work for everyone, including our listeners, the artists that we play and broadcasters. As both owners and users of copyright-protected materials, and as intermediaries between owners and users, broadcasters are in a unique position to understand and appreciate the need for balance in Canada’s Copyright Act. It is essential that the law reflects the importance of protecting owners of copyright while ensuring that users have reasonable access to content. Both elements are necessary to a successful cultural sector, and Canadian copyright laws must ensure that a balance is struck.
Broadcasters invest significant amounts of time, money and energy supporting local talent and we are proud to do so. In 2009, broadcasters contributed $51 million directly to Canadian artists in addition to $64 million in copyright payments to authors, composers, publishers, record labels and performers to play their music on radio, totalling $115 million in one year. This is 5 times greater than the level it was at nine years ago.
Here is the message we need to get across to politicians:
There is no “free ride” for broadcasters – The music industry claims that broadcasters would be getting a “free ride” with the adoption of Bill C-32. That’s not the case. Broadcasters will continue to pay to broadcast music and are committed to promote local and national talent everywhere in Canada, the same way we always have.
Broadcasters are an essential part of the digital economy – The digital economy has presented challenges and opportunities for everyone in the cultural sector. The music distribution technology used to convey content to broadcasters has evolved and so have we. Today, we receive music files in digital formats from record labels. We work with these digital files to prepare our programming line-ups for our airwaves. We know that while other participants in the cultural sector have had a hard time adapting to new technologies, we have been constantly upgrading in order to provide the best service for our listeners and the best promotion for Canadian artists. Broadcasters are not the root cause of the music industry’s problems. As a result of our commitment to achieving success in the digital economy, radio is still the number one promoter of new music in Canada.
No one wants to pay multiple times for the same thing – We pay to play music on air – and that’s fair. But the current and excessively complex system forces us to make additional payments to an unmanageable number of collectives for purely technical digital file copies we make to get music to air and for which we yield no revenue – that’s simply unfair. We should only have to pay once for airing music on our stations. That’s why we believe Bill C-32 improves Canada’s copyright law.
Cutting edge technologies supported by cutting edge laws – Broadcasters want to provide their audiences with the latest content using cutting edge technologies and need the right rules in order to do so. Bill C-32 balances our needs with the needs of artists and provides all of us with essential tools we can use in the digital era.
The Copyright Act should be clarified to state that the levy imposed on blank recording media applies to private copying by consumers only, and provide broadcasters with a clear exemption from the levy in the Act. Broadcasters need to create some noise about this unfair fee. I have personally written to my MP and I hope this article will encourage others to do the same. Broadcasters currently pay five tariffs to seven collectives which becomes an administrative nightmare especially for smaller broadcasters. This madness has to stop.
