CCA Bulletin 6/11

February 7, 2011

What exactly is the financial impact of C-32 on artists and

other rights holders?

Just the facts

Several seemingly contradictory numbers have been quoted over the course of the debate on the financial impacts of Bill C-32 on artists and other copyright holders.

In order to help facilitate debate on this most important issue, the Canadian Conference of the Arts (CCA), with the cooperation of its members and other stakeholders, has prepared a list of revenue sources for artists and rights holders which are at risk unless Bill C-32 is amended.

There is no exact science to tracking revenue losses. This is compounded by the fact that many of the new exceptions in the bill such as education and fair dealing are poorly defined. This viewpoint has been supported by Dan Glover, a copyright lawyer from McCarthy Tétrault LLP, who mentions in his response to professor Michael Geist that, “the fairness test is notoriously soft and subjective, an eye-of-the-beholder test that will be left in almost every case to the judgment of the copier.”

The total $126M figure presented here only represents revenue that is collected and quantifiable, and which is currently at serious risk of disappearing.

Tell me more

The $126M figure does not:

Track revenue losses that are more difficult to estimate, such as losses caused by the “private purposes exception” or the potential elimination of the library market for scientific and technological journals due to the extension of the interlibrary loan exception and temporary reproduction for technological processes;

Account for lost revenue opportunities caused by the “user-generated content” exception and the “publicly available materials on the Internet” exception.

There are other losses which are either impossible to quantify or to project because:

They are related to piracy, an issue which is not aided by a lack of meaningful responsibility on Internet service providers and the weakening of statutory damages proposed in Bill C-32. As noted by several witnesses in front of the legislative committee on C-32, no one can provide reliable information on such losses, which are known to happen on a large scale;

They are related to lost opportunities to develop new markets and business models which will be precluded by the cumulative impact of the numerous new exceptions included in the bill.

Finally, one must take into account the financial impacts of these revenue losses on artists and other rights holders. If C-32 passes in its current form, there will be a substantial increase in litigation costs as artists and creators defend their rights and turn to the courts for clarification on the bill’s ill-defined exemptions.

Revenue at risk due to Bill C-32

• Fair dealing for the purpose of education $41.4M

[C-32, section 21, related to Copyright Act (CA) 34 (1)]:

Note: Includes $1 to 3M related to the display exception for
educational institutions [C-32, section 21, related to CA 29.4 (1) and (3)];

Also includes in excess of $ 1.5M for Access Copyright and $ 450,000
for Copibec related to Reproduction for test and exams
[C-32, section 23 (2), related to CA, 29.4 (2) and (3)]:

Sources: Access Copyright, Copibec, SOQAD, SOCAN, SOPROQ and SODRAC

• Performance of cinematographic works by educational institutions $25M
[C-32, section 24 (2), related to CA 29.5]:

Sources: Audio Ciné Film (ACF) and Criterion

• Non-extension of private copying regime to digital devices: $30M

Note: This figure represents the average annual amount received from
2001 to 2009. This amount dropped to $24M in 2009 as copies are now
being made onto digital audio recorders not covered by the current private
copying regime.

Source: CPCC

• Ephemeral recordings [C-32, section 34 (1) related to CA 30.9 (1)]:

Broadcast mechanical TV and other radio services $8.6M

Source: CMRRA/SODRAC Inc.

TOTAL: $126.2 M

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