Monday, September 14, 2009

The Proceeds of Canada's Blank Media Levy

Here's some interesting data backed up by the new Savethelevy Website and confirmed on the BNN interview with David Basskin and myself last week here.

We have had blank media levies in Canada for almost ten years. The first tariff was imposed on December 18, 1999.

In that time, CPCC (the levy collective) proudly claims that:
Since then, more than $150 million has been paid to songwriters, composers, recording artists and other rights holders for the copying of their music. This money has been received by over 97,000 rights holders, most of whom would not be able to continue their careers without this revenue.
That's less than $1,600 over ten years or an average of less than $160 a year for each of these rights holders, "most of whom" would supposedly "not be able to continue their careers without this revenue.”

Anyone who knows anything about the music industry will know that most rights holders will earn less than that amount and a few will earn a great deal more. The ones earning a lot more won't need it. And those earning the average $160 a year or less won't be quitting their day jobs anytime soon to “continue their careers” in the music business as a result of this levy.

Moreover, since the figure of 97,000 "right holders" presumably includes publishers and record companies that could receive very substantial payments, the payout to individual songwriters, composers and recording artists is probably a whole lot less than $160 a year on average. That's less than about half of the cost of pint of beer a week at typical Canadian pub. Hardly an amount that will sustain a career.

So who has benefited? About $22 million has gone to the costs of pursuing Copyright Board tariffs (lawyers, consultants, surveys, etc.), collection and enforcement (e.g. lawyers and auditors), and other causes such as “communications and government relations - $1,272,000." And that's only to the end of 2007. See CPCC's own numbers here.

The CPCC's days are now numbered because its only real source of revenue is from the levy on blank CDs. When is that last time most people bought any of those? They are rapidly going the way of the floppy disc. So - the CPCC needs a new source of levy money and has now been turned down twice by the Federal Court of Appeal in its attempt to levy iPods and similar devices because the current legislation doesn't apply to digital audio recorders.

While it's hard to see how this levy could have been much of an incentive to most of the musicians who have seen a piece of it, it's not hard to see where the real incentive lies. No doubt there is a great incentive for those who work for the CPCC as as lawyers, consultants, employees, lobbyists and others to try to get the Copyright Act amended so as to keep the levy alive by extending its reach to iPods, cell phones, and beyond.


PS - this is getting picked up here and here.


  1. Good post that provides a quick insight into the whole ludicrous affair. I think the main point you highlighted was "when was the last time you actually bought a blank CD." We can only wait until monies are diverted from our monthly internet services.....

  2. I still believe the so-called "Public Lending Right" model is the best alternative. This is an accountable/transparent government program that gives money to book authors (not intermediaries) based on how popular their books are in libraries. Something similar would work well in this case. Like the PLR it could be focused on composers and performers (rather than intermediaries), and as a government program rather than a levy would be far less controversial (more accountable/transparent, and not levied against unrelated usage of technology).

  3. Implementing in 2009 a slight modification of a tactic first implemented in 1999, based upon research conducted in 1994 - don't these people realize how out of date they are?

  4. In Australia, a similar levy on blank recording tapes was struck down by the Supreme Court as being tax-like and not a royalty. Given the extreme difference between a royalty and a tax, in both intention and effect, how can these guys get away with what is clearly a form of transaction tax - I presume additional to a goods and services tax in Canada? It is clearly redistributive, and not based upon individual economic rights at all.

  5. Yes, that $160.00 really provided the incentive to carry on - NOT.

    It would be interesting to see exactly where all the money went in detail. I may be overly cynical, but it seems to me that they are trying to hide something here, and I'd like to know what.

  6. Mad Hatter,

    To get a feel for what this may be about, take a look at some European countries. There composers and performers are given a choice: become a member of a collective society and get royalties from various uses like radio, or use licenses like Creative Commons licenses to pre-authorise some uses royalty-free. You are given no ability to mix and match to do what you feel will best promote your own business interests.

    Collectives have been calling for extended licenses in Canada, which would allow a given collective to license all works of a given class of works. Authors are given an opt-out situation, not an opt-in. This is as legitimate as the other forms of negative option billing which have been made illegal in other contexts.

    Since Collective Societies are practically defined in the copyright act as legalised cartels, we need to be far more careful when they are going after competing business models rather than simply collecting royalties in situations where royalties are appropriate. All the books, including the methods they use to calculate each royalty cheque, should be public.

    Main point of this comment? Don't assume that audiences of copyrighted works are the targets of these policies. Sometimes it is intermediaries like collectives promoting policies which harm the interests of the copyright holders they often claim to be representing.

  7. mad hatter- you are spot on.

    The driver of compulsory secondary-rights is not authors.
    Compulsory secondary-rights are not individual IP royalty rights.
    They are more like the very old (pre 1700) system that individual rights evolved from. In this ancient form of 'royal' rights a baron would be mandated by the 'Crown'- (literally the King), a Royal Right to collect a levy paid by the traffic over say, a bridge in return for maintaining/supplying X number of Knights and X number of foot for the service of the Crown.The rest of the money was his to use as the baron saw fit.
    At the moment the IP industry is very keen to return to a system like this. A 'Baron IP industry. with a mandated right to collect a privatised transaction tax and keep most of it for themselves and their castle