Bill C-32: A Lifeline for a Dying Industry?

Robert Karrass is a first year JD candidate at Osgoode Hall Law School and currently enrolled in the course Law & Social Change: Law & Music, in Winter 2011. As part of the course requirements, students are asked to write a blog on a topic of their choice.

Artists and consumers protest while supporters hold their breath hoping for Bill C-32 to pass. C-32 was designed to modernize Canada’s copyright laws and facilitate the ratification of WIPO treaties in Canada.  One of the effects of the Bill is to prevent the unauthorized use of copyrighted music as well as regulate authorized use, but whose interests does C-32 really protect?

The music industry as we know it is dying. The music industry was originally performance based, relying on great music and fan loyalty. With the rise of the record label in the early 20th century, we have long since moved from that industry model to a recording based one. Record labels absorb recording and marketing costs in exchange for a percentage of the profit from an artist’s intellectual property. However, with the invention of Napster and subsequent websites such as Limewire, Pandora, and Grooveshark, a floodgate was opened. A new generation of music consumer was born; a generation that believes that music downloading should be free.

Enter Bill C-32, an answer to advances in technology not foreseen in current copyright legislation. C-32 seeks to illegalize the breaking of digital locks, torrent trackers, pirate sites, and the downloading of copyrighted material without legally acquiring it. Although this seems like a necessary step towards the protection of artists’ intellectual property, critics of C-32 such as the Society of Composers, Authors and Music Publishers of Canada (SOCAN) and The Canadian Creators Coalition believe that C-32 as currently drafted might in fact result in a decrease in creative content. C-32 limits consumers by illegalizing unauthorized access to music but does not include adequate provisions for fair compensation of artists. Since artists naturally seek to be compensated for their work and consumers seek to enjoy and use music both personally and commercially for free, C-32 could conceivably reduce both supply and demand of creative content.

If C-32 fails in balancing artist and consumer rights, who really benefits from the Bill? Users claim that C-32 solely benefits the recording industry by illegalizing unauthorized access to creative content; however, they too are protesting the current draft. The recording industry has been devastated by piracy but will C-32 be able to prevent it? According to the Organization for Economic Co-operation and Development (OECD), Canada has the greatest number of file sharers per capita in the world, and given our twenty-eight million internet users (according to Internet World Stats) it would seem that prevention is practically impossible. Also, the Canadian Conference of the Arts with the cooperation of its members and other stakeholders, recently released a report itemizing the possible losses of collectable revenue under C-32 amounting in $126.2 million with approximately $29.8 million arising from the elimination of certain ephemeral recording tariffs. This essentially takes money out of the hands of creators by lowering the costs to broadcasters.

Furthermore, it is unclear whether reducing piracy through legislation will have a positive or negative effect on recording sales. According to a study performed by Jupiter Research and Forrester Research, although “compared to music buyers, music sharers and internet users are 51% less likely to buy a CD from a store and 74% less likely to buy a CD online, music sharers are … 31% more likely to buy single tracks online, 33% more likely to buy music albums online, and 100% more likely to pay for music subscription services.” At the same time, a recent joint study undertaken by IPSOS and Oxford Economics, on behalf of the Canadian Motion Picture Distributors Association (CMPDA) revealed that “48% of all people consuming pirated movies claim they would have paid to view the movie via an official channel had the unofficial channel not been available.”

A possible solution might be to allow the purchase of single tracks at such a low cost (a few cents) that consumers would be able to legally purchase large amounts of music while still compensating copyright holders. Another possibility might be to revert back to a performance-based music industry. In this scenario, we might see a rise in performance, performers, and quality of creative content. However, one might argue that the rigors of performance and travel would require artists to work full-time and create only part-time thereby decreasing creative content in the modern age.  Regardless, the current draft of C-32 might have to be revised to create a better balance between consumers, artists, and record labels.

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