In conjunction with our recent royalty distribution on September 15, we called on SODRAC members to mobilize with a view to lobbying the government to amend Bill C-32 concerning the modernization of the Copyright Act. This mobilization is both vital and urgent.

Once again, we are asking all members who need more information and who would like to get involved to email us at C‑32@sodrac.ca or to call Alain Lauzon, SODRAC’s general manager, at 514-845-3268, ext. 243.

The House of Commons resumed sitting on September 20. According to some observers, Bill C‑32 will be tabled for second reading in the coming days. However, the Leader of the Government in the House of Commons has reportedly asked the opposition parties to limit their interventions during this stage in order for the Bill to be quickly sent to a legislative committee, where amendments may be made.

In view of the fact that second reading is just around the corner, time is of the essence. Since it is highly likely that MPs will vote in favour of the Bill and that it will be sent to a legislative committee, we are pursuing our efforts to advance our positions on the main issues affecting you. As we have emphasized, a number of the provisions in the current Bill will have a major impact on your revenues if they are adopted as is. We estimate that your royalties will drop by more than 30%, although the interrelation of the government’s proposed changes could have an even more devastating effect.

Consequently, we have met with representatives of Heritage Canada and Industry Canada to clarify certain technical aspects of the Bill. We have also worked closely with the representatives of various organizations in order to carefully plan our course of action and join forces on key issues. In addition, we have begun meeting with MPs from various parties with responsibility for copyright issues in order to explain various aspects of the proposed legislation that affect your rights and royalties.

The main issues are outlined in this edition of Replica. On the homepage of our website, you will also find a link to a section dedicated to Bill C-32, which includes a variety of information for your convenience.

We would like to thank you for taking part in the initiatives we are currently working on. Your involvement is essential!

Frédéric Weber

Chairman, Board of Directors

Nine provisions in Bill C-32 that will affect your rights

We have closely examined the Bill’s provisions and the government’s Fact Sheets on the website www.balancedcopyright.gc.ca in order to determine how your rights and royalty payments will be affected. The following nine provisions will have major repercussions.

Ephemeral recordings: no more royalties!

SODRAC began collecting reproduction royalties from radio and TV broadcasters back in 1992. In 1997, a provision was introduced requiring radio broadcasters, as well as TV broadcasters and now satellite radio services, etc. to pay rightsholders (via their collective management societies) a fair share of the profits derived from storing musical works on their servers. These reproductions provide radio stations with undeniable advantages in terms of control, quality, flexibility and costs. However, Bill C-32 does away with the requirement to pay rightsholders for such copies if they are stored for less than 30 days.

For that reason, the future application of our recent Commercial radio tariff is uncertain, even though the royalties for reproducing your works work out to only 0.7% of the $1.5 billion in annual revenues generated by Canada’s commercial radio stations in 2009.

Eliminating this royalty stream will increase radio broadcasters’ profits and reduce your revenues significantly!

Private copying royalties in danger

Since 1997, the Copyright Act has stipulated that compensation be paid for private copying of your works by consumers. Since it is impossible to control copying that is normally done in the home, the private copying regime was an entirely appropriate way of compensating you for use of your works. Currently, this royalty applies only to blank recording media such as recordable compact discs (CD-R).

However, despite technological changes, Bill C-32 does not extend the application of the private copying regime to include digital audio recorders (such as MP3s), even though they are usually used by consumers to reproduce sound recordings, nor to include audiovisual works or other categories of extensively copied works.

Moreover, Bill C-32 creates another exception by legalizing the transfers of formats of existing works, thereby allowing them to be distributed for private purposes on the Internet without paying royalties.

It is thus essential that the private copying regime be modernized, as we have been calling for in our Save the Levy campaign. Otherwise, a significant portion of your revenues will rapidly disappear.

New exception: temporary reproductions for “technological processes”

Bill C-32 creates an exception authorizing the reproduction of works if it is an essential part of a “technological process”. However, the terms used are so broad that it is likely that companies making frequent use digital technology will use this exception against us, i.e. as a way to no longer pay royalties for most if not all of their activities!

However, the economic value of various reproductions has been established over the years by the Copyright Board of Canada, which has determined different prices depending on the type of reproduction, ranging from volatile memory (lower value) to permanent copies (higher value).

Our lawmakers should not take action in this regard since the benchmarks used to define what is a temporary or transient copy already exist.

Your works could be used freely to create new content!

With Bill C-32, consumers can use your works for non-commercial purposes to create new content. For example, they could use your works in homemade videos and distribute them without authorization—and without paying royalties—on the Internet on commercial websites.

This exception (often referred to as the “YouTube exception) is an additional expropriation of your rights. In France, for example, SACEM recently negotiated an agreement with YouTube covering the use of musical works on the website.

Lack of accountability of Internet service providers: where’s the balance?

The government maintains that Internet service providers (ISPs) are not responsible for any illicit content distributed over their networks. However, ISP profits continue to climb, while the revenues of content creators continue to fall due to piracy.

The only requirement that Bill C-32 imposes on ISPs is that they must advise a presumed infringer if a rightsholder informs the ISP of a potential violation of his/her rights. If individuals want to defend their rights, they will thus have to take legal action and pay the costs thereof.

This “notice and notice” procedure thus offers an illusory form of protection, unlike the “notice and take down” or “graduated response” procedures, which make it possible to cut off the Internet connection of individuals if they commit further violations after receiving certain notices and fines.

ISPs should play a key role by educating Internet users and applying effective dissuasive measures. In addition, as noted in the press release issued by AGAMM (French acronym for Free Access to Music is a Myth, an industry association of which SODRAC is a member), it is essential that ISPs compensate you during a transitional period for any revenue losses you may incur.

To put an end to illegal file sharing on the Internet, ISPs should be legally required to be more accountable in terms of education, prevention and compensation.

The Internet becomes a storehouse of free works for teachers and students!

With Bill C-32, teachers and students can freely use works found on the Internet for “teaching” and “education” purposes, even if the copyright symbol (©) is clearly displayed! However, under its agreement (in French only) with the Quebec Department of Education, Recreation and Sports (MELS), SODRAC already offers access your musical works while enabling you to be compensated financially.

Why should the modernization of the Copyright Act deprive you of your royalties and endanger the collective management system, which is effective and balanced?

Exceptions for education, parody and satire: are they fair?

Bill C-32 creates new exceptions for the purposes of education, parody and satire. These come in addition to a series of so-called “fair” exceptions that allow for the use of your works without authorization and without paying royalties.

The government is expanding free access to your works, while SODRAC favours providing flexible access to its repertoire at a reasonable cost. This is an additional infringement of your right to be compensated financially, aimed at “subsidizing” education through free use of your works.

No resale rights for creators in the fields of visual arts and crafts

Whereas creators in some 60 countries receive a percentage of the resale price of their works, Bill C-32 establishes no resale rights for Canadian artists.

Without resale rights, you or your rightsholders will not benefit if your works are resold in Canada or in foreign jurisdictions where this right exists.

Exhibition rights for artistic works: discriminatory

Exhibition rights are still limited to works created since June 8, 1988 that are presented to the public for purposes other than sale or rental. Consequently, experienced artists are often deprived of exhibition royalties, unlike their more junior colleagues.

It is essential that Bill C-32 end this disparity and that the scope of exhibition rights be similar to that for other rights, without regard to the date on which works were created.

Music

SODRAC concludes agreement with MusiquePlus/Musimax for 2005-2012

Following sustained negotiation efforts, we are pleased to announce that SODRAC and the specialty channels MusiquePlus and Musimax recently reached a mutually acceptable agreement. As mentioned in the April 2010 issue of Replica, we filed an arbitration request with the Copyright Board due to a disagreement. Since additional discussions enabled us to resolve our differences, the arbitration hearing will not take place.

The agreement covers royalties payable for use of your works by MusiquePlus and Musimax dating back to 2005 and extending until 2012.

SODRAC has already distributed the royalties for 2005-2006 and 2006-2007. Members will receive the 2007-2008 royalties with the December 15 distribution.

Negotiations on pending lists are heating up

In March 2010, we sent you a communication concerning the issue of pending lists and the status of the class action suit filed in Canada by the estate of Chet Baker, which is claiming royalties relating to musical works contained in sound recordings for which licences were never obtained.

Last spring, SODRAC began working closely with all of the parties involved with a view to reaching an agreement. The negotiations are heating up; in the next few days, SODRAC should be able to provide you with additional information on this topic. Subsequently, the enormous task of determining the recipients will have to be completed prior to paying these royalties, which have been pending for many years.

International: reproduction royalties down in 2009

The International Confederation of Societies of Authors and Composers (CISAC), of which SODRAC is a member, recently published a report describing an increase in the total amount of royalties collected by collective management societies in 2009. According to the report (issued in September 2010), royalties in 2009 were up in a number of sectors, including the visual arts and literature.

In the music sector, however, mechanical royalties fell by 9%, while private copying royalties dropped by 10%. Although digital and multi-media royalties rose by 18%, those fields account for only 2.2 % of total royalties.

These statistics underscore the importance of promoting the emergence of new music royalty streams, in particular through adequate legislation. This December, CISAC will be publishing its final report on 2009 royalties.

IBLA Grand Prize special mention for composer Louis Babin

Last August, composer and SODRAC member Louis Babin received a special jury mention as part of the international Grand Prize organized by the New York-based IBLA Foundation. Every year, the competition pays tribute to outstanding composers and performers from around the world. Mr. Babin’s special mention notes the quality of his piano composition “Duel” and his impressive second-place showing among composers in the 2010 rankings.

Mr. Babin was the only Canadian composer in the competition, which included works by 31 composers from across North America, Europe, Asia and Oceania.

Visual arts and crafts

COPIBEC set to pay reprographic royalties this fall

In recent years, many SODRAC members have received royalties in connection with photocopies of their works published in newspapers, magazines and books in Quebec. COPIBEC collects these royalties from various users, including educational institutions, and then distributes them to eligible authors and rightsholders.

This fall, COPIBEC will be making an additional royalty payment. To be eligible, at least one of your works must have been reproduced in a book (including exhibition catalogues), a magazine or a newspaper published in Quebec between January 1, 2006 and December 31, 2009. SODRAC is currently compiling your declarations of published works prior to transmitting them to COPIBEC. Once the COPIBEC royalties have been received, they will be paid together with SODRAC’s next quarterly royalty distribution.

Belgium-based SOFAM entrusts rights management to SODRAC

On October 1, SODRAC became the Canadian rights manager for the 4,500 members of SOFAM, a Belgian copyright management society specializing in the visual arts. Founded in 1979, SOFAM represents the interests of artists in a variety of fields, including painters, sculptors, engravers, photographers and architects.

In addition to the repertoire of SOFAM members’ works, SODRAC is the exclusive Canadian copyright manager for some 40 other associations. Our international repertoire now includes works by nearly 40,000 creators in the fields of visual arts and crafts from 35 countries.