Copps says balance needed between interests of broadcasters and creators

The private radio industry will likely challenge a ruling that implemented new tariffs on music reproduction, but such a move appears to have little support from the Canadian Heritage minister. In comments made to Canadian Communications Reports, Sheila Copps suggests that radio broadcasters need to accept a tradeoff and grant greater compensation to artists in return for the radio industry’s profitability resulting from the government’s decision to allow multiple licence ownership. Glenn O’Farrell, president and CEO of the Canadian Association of Broadcasters (CAB), says the association is still canvassing its members and hasn’t decided on whether it will appeal the Copyright Board of Canada decision to the Federal Court of Appeal. The CAB has 30 days from the March 28 release of the decision to appeal. But Michel Arpin, senior advisor of regulatory and government affairs at Astral Media Inc., which is a CAB member, favours the appeal route. He tells CCR that the Copyright Board erred in its decision that requires radio stations to pay for making reproductions of music for broadcast purposes, such as from a CD to the radio station’s computer system. Under subsections 70.15(2) and 68(4) of the Copyright Act, the Copyright Board ruled that radio stations airing primarily music (not low-use stations) must pay 0.27% of the station’s first $625,000 gross income, 0.53% of its next $625,000 gross income, and 0.8% of any other amount of gross income each year (CCR Update, April 2/03). Although the rate granted is much lower than that requested by the Canadian Musical Reproduction Rights Agency (CMRRA) and the Society for Reproduction Rights of Authors, Composers and Publishers of Canada (SODRAC), the CAB remains opposed to the concept of such a tariff. "We are unequivocally opposed to the idea that a tariff should be applied against the activity that broadcasters conduct that amounts to changing the music on a CD to a hard drive platform," O’Farrell says. Arpin points out that there are legal grounds for appeal. "The decision here has a major flaw because the Copyright Board is an economic tribunal," Arpin says. "Its whole business is to make economic decisions. But in this decision, you will read that it says that neither party (the collectives nor the CAB) was able to come together with an economic value for the reproduction. Consequently, they made their decision based on the usage of the music. So we’re paying a reproduction right but based on the usage that we make of the music that is copied. But we already pay SOCAN (Society of Composers, Authors and Music Publishers of Canada) for the usage of the music. SODRAC and CMRRA are reproduction collectives." He adds, "Even the decision says that there was no testimony made about the savings that could be made in using a hard drive – at least in financial terms. There were efficiencies mentioned with regard to better quality programming and a better way of managing music. But at no time was there an economic value put to (the activity)." But Copps doesn’t appear to be on the same page as the radio broadcasters. "I think that you have to be careful about taking this as a one-off," she says. "One of the things that the radio industry asked for and that we did approve was multiple licence ownership. It has created a level of profitability for the radio business that they haven’t seen in many, many years. But some of the creators…would argue that multiple licence ownership has led to a diminution of voices, and that’s why you have Parliamentary committees looking at the diversity of voices. So for every perspective, there is usually another perspective and I think we have to approach any change in a very complicated law with the knowledge that we’re going to support the largest amount of creators." She states that it’s important to strike a balance between broadcaster and creator interests to ensure that the 17,000 people working in the music industry in Canada can continue.

Copps says balance needed between interests of broadcasters and creators

Broadcast | April 10, 2003

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