John Kenneth Galbraith 1908 - 2006
(Wikimedia)
Here are my speaking notes for the CHPC Committee Hearing of November 27, 2018 about Remuneration Models for Artists and Creative Industries
1. Introduction
The late legendary Canadian
economist John Kenneth Galbraith explained the aptly named trickle-down theory
of economics as follows. He said:
'If you feed the horse enough oats, some
will pass through to the road for the sparrows.'”
That’s essentially the basis of the copyright system as we know it in
Canada. It’s frankly a bit messy. We have about 38 collectives in Canada –
which is about six times more than the USA. We have the largest, most expensive
and slowest moving copyright tribunal in the world.
Most of the sparrows get little from this system. Take Access Copyright
for example. Based on its 2017 figures, 11,000 creators got $2,090,000 from AC
and publishers, for an average of $190 per annum each. That’s less than the
hourly billing rate of most junior lawyers these days.
The copyright system can actually be a disincentive to creation. Case in
point is Giuseppe Verdi – perhaps the greatest of all opera composers, as
documented in a wonderful book by Prof. F. M. Scherer called Quarter Notes and Bank Notes. And there’s a recent book and article on the sound recording and popular music industry
by Prof. Glynn Lunney.
Here are some facts to keep in mind:
· It is impossible to define who is a professional writer, musician, composer, painter or other creator. I write a lot in my work and outside of my day job. I certainly don’t consider myself a professional “writer”. However, I got paid about $85 this year by Access Copyright– which is more than others I know. It’s always been incredibly easy to qualify as an Access Copyright creator affiliate. Doubling my Access Copyright royalties will mean nothing to me other than a nice lunch for two – but could cost the educational system hundreds of millions of dollars a year.
· The composers whose works you might hear at the National Arts Centre are lucky to make more than $500 or $1,000 a year from SOCAN. Good thing they get grants and commissions and maybe salaries as a professor if they are lucky.
· Virtually all professors are writers – and they get well paid for their writing by getting tenure and nice six figure salaries. But only a very small handful – such as Jordan Peterson – make serious money writing books.
· A trade book selling 5,000 copies is a great success in Canada. The writer will be lucky to get $15,000 from the publisher and a pittance from Access Copyright. I hope they have a good day job.
2.
How digital technology can help
artists get paid….
There’s no doubt that artists will find a way – perhaps with the help of
Google, Amazon, Shopify or others yet to come – of selling directly online to
their fans without signing away their rights and most of their revenues in exchange for
recoupable advances and elusive dreams that almost never come true.
But beware of digital delusions and vapor ware. For example, I’m frankly
very skeptical about Access Copyright’s latest announcement called “Prescient” that promises the world once again. I’m not
holding my breath, based upon its past failures to deliver. Talking about blockchain
and machine learning is easy to do. That’s why everyone is doing it.
Above all – please consider that we are looking at the cultural and
knowledge sector, of which copyright is only a component or tool – and not the
sector or the end itself. The transportation sector evolved from the horse and
buggy to cars. More money got spent on transportation – but it got spent
differently. Things change and constantly evolve. Old business models and jobs
are not guaranteed – just look at Oshawa.
As Universities Canada pointed out the other day and, in its brief, filed with
the INDU Committee in June 2018. Canadian universities “are spending more than ever
purchasing content: more than one billion dollars in library content in the
last three years combined” – based upon Statistics Canada data.
3.
Increased use of the public lending
right and similar models
4.
How collectives can best serve
artists?
Collectives can best serve artists by doing their best to put themselves
out of business – or at least by making themselves smaller and smarter - by embracing
digital technology. It is simply unacceptable for a collective to spend 25% to
30% of it revenues on administration, lobbying and legal fees. That’s members’ money.
The Copyright Board should only allow a collective to operate if it does
so in the best interest of both creators and users. In all cases, it should
require full disclosure of:
- Actual repertoire
- Average and median payments to individual creators
- Salaries of senior officers and in-house counsel
- Amounts spent on outside lobbyists, lawyers, experts and other consultants together with names
5.
Levies and taxes
The Copyright Board is inexplicably keeping this zombie tax alive – and
allowing the music industry to use the small revues of about $2 million a year
– almost 30% of which is spent in administration, including lobbying and
lawyers – to wait in zombie like
stealth for another day to pounce on smart phones, ISPs, the cloud or whatever
they can persuade a gullible government to somehow tax.
The music industry is asking for a new “tax”
on iPhones and other devices as well as its proposal for a $40 million per year taxpayer handout
until an iPhone type tax can be implemented. Not to mention a recent proposal
that would subject broadband data use to a copyright tax.
It’s more than high time to kill off the levy scheme in Part VIII of the Copyright Act and any idea of zombie tax. There’s no “Value Gap” in the copyright system. However, there’s a serious “values gap” in the fake news that is being disseminated these days about IP in general and Canadian copyright revision in particular.
6.
Need to clarify that tariffs are not
mandatory
*********
I look forward to your questions
HPK
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