These Three Laws Are Making Canadian Musicians Lose Money
A few weeks ago, I had the opportunity to meet someone from Music Canada, who gave me my very own hard copy of their latest report titled “The Value Gap: Its Origins, Impacts and a Made-in-Canada Approach.”
creative copyright canada, music canada, music copyright, the value gap, Canadian laws, music income, income, petitions, Miranda Mulholland, tv soundtracks, movie soundtracks, sound recording, legal definitions, Canadian Copyright Amendments, Radio Royalty Exemption, Digital Millennium Copyright Act, Copyright Modernization Act, content creator, music business, music industry, arts industry, the arts, Pop of Colour, music blog, copyright reform,
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Make a living income as a musician in 2018 is tough. I try to keep things positive around here, but let’s face it: our parents probably worry about us sometimes.

The “Starving Artist” trope is hard enough to prove wrong as it is, making it even harder are these three Canadian laws that are essentially siphoning revenue away from us.

A few weeks ago, I had the opportunity to meet someone from Music Canada, who gave me my very own hard copy of their latest report titled “The Value Gap: Its Origins, Impacts and a Made-in-Canada Approach.” Their research light a fire that inspired me to start looking up occasions they were referencing, and before I knew it, they had inspired the foundation of this article. So, without further ado, let me present to you three laws making Canadian musicians lose money.

LAW #1 The Safe Harbour Exception to the Digital Millennium Copyright Act (1998, USA) and the Copyright Modernization Act (2012, Canada)

Let’s start this journey by going back, way back, in time. In 1998, The United States was the first big, developed country to implement rules regarding intellectual property on this new fangled world wide web. They called it the Digital Millennium Copyright Act (I’m sure the D.M.C.A. acronym is a familiar one to any YouTube content creators reading this). This American law became an influential standard for protecting ownership on the internet for many countries around the world in the next few years.

Now, as part of laws regarding internet use, a liability exception was created for internet service providers and search engines. They were “safe harbours,” and weren’t to blame for the illegal actions of individual users. For example, if some dude is using his Rogers home internet to run a credit card scam, and his sketchy website shows up deep in Google search results, Google isn’t in legal trouble, and neither is Rogers for proving him internet access. ISPs and search engines were seen as “neutral information pipelines,” and to this day are protected as such.

The issue with this is that many places that are host to creative work, such as music, are no longer simple search engines that only pull up what a user is looking for; YouTube being the biggest culprit.

To remind you of YouTube’s business model: the user-generated-content host is free for all to access, with the option for creators to monetize their content by putting an ad at the start, in the middle, or in the sidebar of a video. The ad revenue then gets split between the video creator and YouTube. Basically, the goal of YouTube is to have users watch more videos and spend more time on their website, watching more ads.

As I’m sure some of you have realized, one doesn’t even need to own the copyright to a piece of work before uploading a video of it on YouTube and collecting ad money. YouTube didn’t post it, a random internet user did. Witness all those fan-made lyric videos featuring the audio of a new pop song within hours of the track’s release (or maybe even a leaked version). You don’t have to own the song, you just have to be the fastest to upload it, and not get a complaint. Whether or not it’s there legally, if internet users are flocking to it in great numbers, an ad can certainly be slapped on. Why not? YouTube is making money off the ads too, so why would they miss out on this window of opportunity?

Now, have you ever went to YouTube to look up a specific news clip, then several hours down the rabbit hole later are watching a tutorial on how to teach giraffes to play the kazoo? That might not be entirely your fault. In May 2017, YouTube’s music ambassador, Lyor Cohen, said in an interview with Recode. “Do you know that 80 percent of all of watch time is recommended by YouTube? That’s one of the biggest misconceptions. Everybody thinks that all the music that’s being listened to and watched is by search.”

So, to put these pieces together, “certain intermediaries [YouTube] employ technology advancements that have made it possible for them to promote content of their choosing and to earn money from it. […] YouTube actively identifies music consumption patterns and predicts what users will enjoy. They point users to the posted content and capitalize on it by selling advertisements and/or harvesting visitor data. ” (Music Canada’s 2017 report titled The Value Gap)

However, YouTube also pays musicians significantly less in royalty rates than streaming services. They are able to get away with this because they still legally classify as a “neutral information pipeline,” just like search engines do. The laws haven’t been updated to keep up with the advancement of algorithms based on tracking visitor data, so they’re still entitled to Safe Harbour protections that let them off the hook for showing pirated music in a user’s viewing recommendations.

In May 2017, Google commissioned a study out of Europe to try and find whether the availability of music on YouTube helped deter music fans from visiting pirate sites. The survey found that YouTube’s parent, Google, was used by 17% of users to search for “free pirated music” and by 28% to search for “free music.” The main market edge subscription streaming services (such as Spotify, Apple Music or Tidal) have over general YouTube is that with them, music can be listened to offline as well. This is especially true in geographical areas where internet service isn’t 100% reliable, or cellphone data is expensive.

Unfortunately, the leading form of music piracy is now “stream ripping” (MUSO’s 2017 Global Piracy Report) with 23% of popularity among pirates and growing. Fan uploaded audio-only versions of songs are relatively simple to convert into .mp3 files, all without paying a cent. YouTube is fine with making money off pirated content, paying put lower royalty rates than streaming platforms, and the ease of turning their videos into offline audio makes it harder to convince casual music fans to sign up for those monthly subscription services.

“Safe Harbours created a barrier to growth of legitimate music services that must compete with unlicensed (or under-licensed) services that use safe harbours and exceptions as a strategic shield. This was never intended by the original framers or the rules.” (The Value Gap)

LAW #2 The Radio Royalty Exemption to the Canadian Copyright Amendments (1997, Canada).

If you are a songwriter, you are probably well aware of what SOCAN does by now. As a quick explanation for others, they are the Canadian performing rights organization that ensures that the composers and songwriters get paid royalties for their songs playing publicly, even if they aren’t singing them. Pretty straight forward, and has allowed composers and songwriters to get paid for radio play since 1921.

In 1997, amendments to the Canadian Copyright Act were proposed to allow the performers and producers of the song to collect royalties too. The radio industry fought tooth and nail against this, arguing that the added expense would hurt small stations. As a compromise, the Copyright Board decreed that only station earning $1.25 million+ in from ad revenue would need to pay royalties, and every station making less than that was exempted.

In the last 21 years, however, most of these “small stations” have been bought up by large media companies. “These radio conglomerates are still able to claim the exemption for each radio station they own. For example, a commercial radio group that owns 100 radio stations benefits from the exemption 100 times, which results in an annual loss of almost $2 million for performers and producers of sound recording.” (The Value Gap)

Canada is the only country that does this.

LAW #3 The Definition of a “Sound Recording” in the Canadian Copyright Amendments (1997, Canada).

Did you know that under current Canadian laws, performers and labels don’t earn royalties on the use of their recorded music in film and TV? Can you imagine if you were the artist who plays the theme song for a popular TV series, and only receive a flat, hourly session musician fee? You don’t have to. Miranda Mulholland, a singer, songwriter, fiddle player and artist advocate, can share her experience.

“Even though I played on almost every episode of CBC’s Republic of Doyle, which is now syndicated worldwide, I only receive the one-time union rate I got per session, which was around $280, while the composer collects residuals every time that show airs. 44 countries around the world – the UK, France and Australia among them – afford performers and record labels the right to receive public performance royalties when their sound recordings are used as a part of a soundtrack in TV and film. This contributes to the fact that there are very few ways my work will make me money unless I am there performing it in real time – and although it feels as though I try, I can’t be everywhere.” – Miranda Mulholland

This exception only applied to TV and movie soundtracks, which last anyone checked, should have a budget for music. The soundtrack and theme song are an important aspect of the cinematic experience, and should be paid accordingly.

Canada’s copyright laws aren’t trying to let artists down. It’s a simple fact that they are behind the times, and badly need an update. There is so much talent in our beautiful country, and we need to take action to keep music a viable career path for our future generations.

Canadian Ministers Who Support Copyright Reform

“Our government is committed to helping Canadian creators succeed and having great content easily discovered and enjoyed in Canada and abroad. This requires a copyright framework that works well in the context of our fast-paced digital world and provides creators with opportunities to get fair value for their work. We thank parliamentarians in advance for their work in reviewing the Copyright Act to ensure that it supports Canada’s world-class innovation and creativity.”

– The Honourable Mélanie Joly, Minister of Canadian Heritage

“In order to thrive in the digital economy, we need to support both creators and users of copyrighted content by providing them with a predictable, transparent and effective legal environment. I am looking forward to the review as it provides an opportunity to ensure that Canada’s current copyright framework effectively supports creativity and innovation.”

– The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development

Petition You Should Sign

Stay Colourful,

– Clarence