Your post highlights two interesting problems.
First, any user of Internet-based music delivery services knows intuitively
that the surrogates used by the Canadians/Canadien for distribution of the
levy are not good representatives of music accessed over that channel. Easy
ones, certainly, from the point of view of administrative convenience; and
roughly fair if the intention of the levy were to simply provide incremental
benefits rather than compensation for copying from largely Internet-acquired
content; and cheap since the surveys of the surrogates are already conducted
for other distributions; but somewhat backward in the sense that radio play
and retail unit sales are very traditional distribution channels. The levy
is imposed on media used predominantly to copy from hard drives, not from
CD's or the radio. CDs and radio, I suspect, are not the primary channels
for digital music files found on hard drives. For example, the whole point
of P2P is that it doesn't emulate traditional content found on traditional
distribution channels. They should bite the bullet and do survey some work
on Internet based services. Their current surrogates would be more
appropriate to the old days of off-air taping.
Second, look for a moment at the splits between the underlying composition
and the soundrecording. You will find that the balance favors the
underlying composition. Thus far, in the United States, the RIAA companies
have been incredibly successful in doing the reverse, quite dramatically,
with comparative valuations placing the underlying work components
(publishers and writer) at less than a 1/6 th of the soundrecording (artists
and record labels)! This is true for web casting and for private "burnable"
download deals.
JOSH
-----Original Message-----
From: Netanel, Neil []
Sent: Monday, December 15, 2003 10:27 AM
To: 'Felix Stalder'; 'acs@xxxxxxxxxxx '
Subject: [acs] Canada and sampling
This is from the website of the Canadian Private Copying Collective.
http://cpcc.ca/english/infoCopyHolders.htm
As Felix says, the CPCC uses a sampling method, which counts
airplay and CD
sales, and not actual downloads or digital uses. The continued equity and
adequacy of that method would depend on the extent to which P2P (1)
supplants airplay and CD sales and (2) there is a rough congruency between
works traded on P2P and those played on radio and sold in CDs.
"The Copyright Board designates the proportion of total royalties
that forms
the basis of CPCC's distribution amongst each of the three
eligible groups:
songwriters and music publishers, recording artists, and record companies.
These proportions are recorded in the private copying tariffs. It is then
CPCC's job to allocate and pay the royalties to individual copyright
holders. CPCC and its constituent member collectives have developed a
distribution process that is enabling royalties to be distributed fairly
amongst tens of thousands of copyright holders.
Since no inventory of privately copied tracks exists,
distribution is based
on representative samples of radio airplay and album sales, which
are given
equal weight in the distribution. Together they provide a proxy for
determining the titles that Canadians typically copy for private use.
Internet usage is not referenced in the distribution as no adequate
documentation of this activity currently exists. Samples are
regularly used
by copyright collectives because the cost of capturing and analyzing all
available information would be excessive.
The airplay samples are prepared by CPCC member collectives SOCAN
and NRCC,
and are based in an annual 14-day sample for each commercial radio station
in Canada and a sample of programming from the CBC/SRC radio services. The
specific methodologies used in the airplay portion of the private copying
distribution are consistent with those used by SOCAN to distribute
performing rights royalties to authors and publishers and by NRCC to
distribute neighbouring rights royalties to performers and to makers of
sound recordings.
The sales sample is based in SoundScan data. This portion of the private
copying distribution of royalties for 2000 was based in a limited
sample of
album sales data, reflecting the substantially lower royalty revenue
available for that year. Nevertheless, the albums identified in
that sample
accounted for 80% of record sales in Canada during 2000. The
sample size was
increased for the 2001 distribution, with the albums identified in the
sample accounting for 91% of all record sales in Canada.
Recognizing the relatively modest level of collections for 2000,
CPCC opted
to pay out royalties for 2000 and 2001 in a single, combined distribution.
While songwriters and music publishers are eligible regardless of
nationality, only Canadian recording artists and record companies may
receive payments under current law. In accordance with the
Copyright Board's
decisions, royalties collected for 2001 and 2002 are allocated as
follows:
66 % to eligible authors and publishers
18.9% to eligible performers
15.1% to eligible record companies."
Neil Netanel
Arnold, White & Durkee Centennial Professor of Law
University of Texas School of Law
Visiting Professor, UCLA School of Law (2003-04)
-----Original Message-----
From: Felix Stalder []
Sent: Sunday, December 14, 2003 12:45 PM
To: 'acs@xxxxxxxxxxx '
Subject: Re: [acs] Canada deems P2P downloading legal
As far as I can tell, there is one collecting agency (Canadian Private
Copying
Collective, CPCC.ca) that does nothing but collect. It then hands
over the
money to the various collective agencies that distribute the
money to their
members according to whatever rates they have established. SOCAN, the
Canadian Performing Rights Agency, for example, distributes
according to a
fixed key directly to creatives and publishers.
From what I could find so far, there is no additional tracking of use
pertaining to p2p or other personal uses. I think they simply
have now more
money do distribute in the same way the distributed it before.
Socan, as a
performing rights organization, doesn't use sales figures, but
only airplay
(radio and TV), use of music in public spaces (bars, malls, live
performances
etc), the latter is usually tracked via surveys.
Felix
On Sunday 14 December 2003 18:47, Netanel, Neil wrote:
So Canada has a two-stage distribution of proceeds. First, it allocate
proceeds among various collecting societies and then the collective
societies follow internal distribution mechanisms. To what extent is
either stage supposed to reflect consumer demand for particular
works? If
so, how is consumer demand measured? I imagine that, at this point,
Canadian collective socieities use some sort of sampling from hard copy
sales or radio play as a proxy for P2P downloads or uses. Is
that right?
If so, is that likely to be satisficatory as P2P becomes a
primary vehicle
for distribution?
-----Original Message-----
From: Felix Stalder
To: acs@xxxxxxxxxxx
Sent: 12/13/03 5:01 AM
Subject: [acs] Canada deems P2P downloading legal
This strikes me as a potentially important precedence (more for Europe
than
the US), though it's likely to raise as many question as it addresses.
For
example, how does one differentiate between uploading and downloading in
a
p2p network? Do files in the 'shared folder' already count as uploaded?
For our discussion, two things are particularly important (indirectly
address
Neil's points).
First, it seems that the question of accurate measurement of use (and
the
connected gaming issue) did not even come up. It seems that there is
agreement that the current distribution key is, at least for the time
being,
good enough.
Second, from this follows the second important point, that the current
collective societies [1], and their internal distribution mechanisms,
are
viewed as providing the adequate institutional mechanism for the
expansion of
the system into the p2p networks.
The first point strikes me as surprising, though I guess from a
pragmatic
point of view, a good (transitory) solution. If the first point is
accepted,
the second one close to inevitable.
For those who like to read the actual legal texts, they are here [2].
Felix
*Canada deems P2P downloading legal*
By John Borland
CNET News.com
December 12, 2003, 2:20 PM PT
URL: http://zdnet.com.com/2100-1104-5121479.html
*Downloading copyrighted music from peer-to-peer networks is legal in
Canada, although uploading files is not, Canadian copyright regulators
said in a ruling released Friday.*
In the same decision [2] the Copyright Board of Canada imposed a
government
fee of as much as $25 on iPod-like MP3 players, putting the devices in
the
same category as audio tapes and blank CDs. The money collected from
levies
on "recording mediums" goes into a fund to pay musicians and songwriters
for
revenues lost from consumers' personal copying. Manufacturers are
responsible
for paying the fees and often pass the cost on to consumers.
The peer-to-peer component of the decision was prompted by questions
from
consumer and entertainment groups about ambiguous elements of Canadian
law.
Previously, most analysts had said uploading was illegal but that
downloading
for personal use might be allowed.
"As far as computer hard drives are concerned, we say that for the time
being, it is still legal," said Claude Majeau, secretary general of the
Copyright Board.
The decision is likely to ruffle feathers on many sides, from
consumer-electronics sellers worried about declining sales to
international
entertainment companies worried about the spread of peer-to-peer
networks.
Copyright holder groups such as the Recording Industry Association of
America
(RIAA) had already been critical of Canada's copyright laws, in large
part
because the country has not instituted provisions similar to those found
in
the U.S. Digital Millennium Copyright Act. One portion of that law makes
it
illegal to break, or to distribute tools for breaking, digital copy
protection mechanisms, such as the technology used to protect DVDs from
piracy.
A lawyer for the Canadian record industry's trade association said the
group
still believed downloading was illegal, despite the decision.
"Our position is that under Canadian law, downloading is also
prohibited,"
said Richard Pfohl, general counsel for the Canadian Recording Industry
Association. "This is the opinion of the Copyright Board, but Canadian
courts
will decide this issue."
In its decision Friday, the Copyright Board said uploading or
distributing
copyrighted works online appeared to be prohibited under current
Canadian
law.
However, the country's copyright law does allow making a copy for
personal use
and does not address the source of that copy or whether the original has
to
be an authorized or noninfringing version, the board said.
Under those laws, certain media are designated as appropriate for making
personal copies of music, and producers pay a per-unit fee into a pool
designed to compensate musicians and songwriters. Most audio tapes and
CDs,
and now MP3 players, are included in that category. Other mediums, such
as
DVDs, are not deemed appropriate for personal copying.
Computer hard drives have never been reviewed under that provision,
however.
In its decision Friday, the board decided to allow personal copies on a
hard
drive until a fee ruling is made specifically on that medium or until
the
courts or legislature tell regulators to rule otherwise.
"Until such time, as a decision is made on hard drives, for the time
being,
(we are ruling) in favor of consumers," Majeau said.
Legal analysts said that courts would likely rule on the file-swapping
issue
later, despite Friday's opinion.
"I think it is pretty significant," Michael Geist, a law professor at
the
University of Ottawa, said. "It's not that the issue is resolved...I
think
that sooner or later, courts will sound off on the issue. But one thing
they
will take into consideration is the Copyright Board ruling."
Friday's decision will also impose a substantial surcharge on hard
drive-based music players such as Apple Computer's iPod or the new
Samsung
Napster player for the first time. MP3 players with up to 10GB of
memory
will have an added levy of $15 added to their price, while larger
players
will see $25 added on top of the wholesale price.
MP3 players with less than 1GB of memory will have only a $2 surcharge
added
to their cost.
With a population of about 31 million people, Canada is approximately
one-tenth the size of the United States. But Canadians are relatively
heavy
users of high-speed Internet connections, which make it easy to download
music files. About 4.1 million Canadians were using a broadband
connection at
home as of the end of June 2003, according to U.K.-based research firm
Point
Topic. By comparison, U.S. cable and DSL (digital subscriber line)
subscribers totaled 22.7 million at the end of September, according to
Leichtman Research Group.
Canada has already raised the hackles of some copyright holders through
its
reluctance to enact measures that significantly expand digital copyright
protection, as the controversial Digital Millennium Copyright Act (DMCA)
has
done in the United States. As a result, Canada could become a model for
countries seeking to find a balance between protecting copyright
holders'
rights and providing consumers with more liberal rights to copyrighted
works.
For now, it remains unclear how other countries might be influenced by
Friday's ruling.
Geist said he believes the tariff decision could be just the tip of the
iceberg for hardware makers, as Canadian regulators grapple with the
full
implications of the policy. Other devices, including PCs, may eventually
be
brought under the tariff scheme, he predicted.
"Given that they've made a strong stand on (peer-to-peer matters), if
the
policy remains the same, there's little choice but to move ahead on
personal
computers," Geist said.
However, a representative of the Canadian Private Copying Collective
(CPCC),
the group of music copyright holders that typically petitions for new
media
types to be added to the list, said computers were not on its agenda.
"We have never sought a levy on computer hard drives and do not intend
to do
so in the future," Lucie Beaucheni, vice chair of the CPCC, said.
-------------------
[1]
Who benefits from the levy?
http://www.cb-cda.gc.ca/news/c20032004fs-e.html
The entitlement to receive remuneration in respect of private copying of
sound
recordings benefits eligible authors, eligible performers and eligible
makers. This is a corollary to the right of individuals to copy musical
works
for their own private use.
CPCC has been designated as the collecting body for the private copying
levy.
CPCC is also responsible for distributing the amounts generated by the
levy
to collective societies representing eligible authors, eligible
performers
and eligible makers. Member collectives of the CPCC include:
* the Canadian Mechanical Reproduction Rights Agency (CMRRA)
* the Neighbouring Rights Collective of Canada (NRCC)
* the Société de gestion des droits des artistes-musiciens (SOGEDAM)
* the Société du droit de reproduction des auteurs, compositeurs et
éditeurs au Canada (SODRAC); and
* the Society of Composers, Authors and Music Publishers of Canada
(SOCAN)
For more information, please consult CPCC's Web site: www.cpcc.ca
[2] http://www.cb-cda.gc.ca/new-e.html
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