“Your committee’s review of the Copyright Act and the work of the Heritage committee on artists’ remuneration come at a critical time for all creators. It is a time when governments around the world are questioning whether the current digital marketplace is functioning fairly for the world’s creators. The reality for Canadian music creators is that there are provisions in our own Copyright Act preventing them from receiving fair market value for their work. I believe the best way that this committee can assist in creating a marketplace that is transparent and supports Canadian creators is by providing the government with straightforward, accessible solutions to address the Value Gap,” said Henderson in his prepared remarks.
Henderson went on to explain the origins of the Value Gap go back two decades to a time when governments were trying to adapt existing laws designed to protect telephone companies to a newly emerging digital marketplace. “Around the world those laws understood the internet as a series of ‘dumb’ pipes where your browsing habits were anonymous and the data travelling between sites was so vast it was unknowable. But twenty years later we know the Internet to be the “smartest pipes” humankind has ever made. Your web habits are meticulously tracked and the metadata that they generate is collected, analyzed and sold every second of the day,” says Henderson. “While well-intentioned when they were created, the impact of these laws today is that wealth has been diverted from creators into the pockets of massive digital intermediaries, and what little is left over for creators is concentrated into fewer and fewer hands. As a result, the creative middle class is disappearing, and with it, numerous jobs and opportunities.”
Henderson also noted that the committee should address safe harbour provisions, which protect services such as YouTube from lawsuits for copyright infringement.
Henderson then made the four recommendations that he says could be implemented by government immediately to help creators and copyright holders. Those four recommendations with Henderson’s comments are:
1. Remove the $1.25 Million Radio Royalty Exemption
Since 1997, commercial radio stations have been exempted from paying royalties on their first $1.25 million advertising revenue. It amounts to an $8 million annual cross-industry subsidy paid by artists and their recording industry partners to large, vertically-integrated and highly profitable media companies. Internationally, no other country has a similar subsidy, and the exemption does not apply for songwriter and publisher royalties – meaning that performers and record labels are the only rights holders whose royalties are used to subsidize the commercial radio industry. The exemption is unjustified and should be eliminated.
**2. Amend the Definition of ‘Sound Recording’ in the Copyright Act
**The current definition of a “sound recording” in the Copyright Act excludes performers and record labels from receiving royalties for the use of their work in television and film soundtracks. This exception is unique to television and film soundtracks, and does not apply to composers, songwriters and music publishers. It is inequitable and unjustified, particularly in light of the profound role music plays in soundtracks, and it is costly to artists and record labels, who continue to subsidize those who exploit their recordings to the tune of $55 million per year. The Act should be amended to remove this cross-subsidy.
**3. Amending the term of copyright for musical works
**The term of copyright protection in Canada for the authors of musical works is out of line with international copyright norms. Under the Copyright Act, protection for musical works subsists for the duration of the author’s life plus a further period of 50 years. By contrast, the majority of Canada’s largest trading partners recognize longer copyright terms for musical works, and a general standard of the life of the author plus 70 years has emerged.
** 4. **Private Copying: Renew Support for Music Creators
The private copying levy, originally intended to be technologically neutral, has been limited by various decisions to media that are effectively obsolete. This important source of earned income for over 100,000 music creators is now in jeopardy unless the regime is updated.