Radio broadcasters target Liberals in copyright ad campaign

OTTAWA—Facing tough resistance from all three opposition parties about a change to the Copyright Act to eliminate mechanical royalties for radio broadcasters, the Canadian Association of Broadcasters (CAB) is airing a coast-to-coast advertising campaign that points the finger at the Liberals. The radio spot, which is running in large and small markets in all of English Canada, says “local radio in Canada may be threatened if copyright bill C-32 is not passed as introduced by the government”—a reference to the possibility that the three opposition parties could amend Bill C-32, the Conservative government’s copyright reform legislation, at committee stage. “This much needed bill may fail because the Liberal party wants an amendment that would have your local radio station send money to big recording companies outside Canada. This money should stay in Canada to develop your local radio programs. Help pass Bill C-32. Keep local radio alive,” the advertisement says. It urges listeners to contact their members of Parliament or visit a campaign website to demonstrate support. Sylvie Courtemanche, chair of the CAB, said in an interview that the organization is trying to educate Canadians about Bill C-32. “We have to be heard,” she said. “We are not apologizing for trying to save a Canadian industry that is the single biggest payer of royalty payments in Canada.” She added: “The Liberal party says they’re standing up for artists, well, we’re standing up for local radio, because we think local radio matters.” Courtemanche said the CAB decided to run the ads after the Liberal party released a list of proposed amendments to C-32 late last year. At that time, the party said it supports reversing a proposal in Bill C-32 to repeal 30.9(6) from the Copyright Act so that radio stations no longer have to compensate collective societies for reproduction rights. The NDP and the Bloc Quebecois are in line with the Liberals on the issue. The broadcasters argue they already pay other royalties to broadcast music and should not have to pay a reproduction right to simply transfer digital works from one computer to another. They add that much of the royalties they pay go to multinational recording companies headquartered outside Canada. Radio broadcasters paid a total of $115 million in royalties and Canadian content contributions last year, which was in addition to “tens of millions” in community and charitable contributions, says a CAB brief on the issue. The opposition parties, as well as collective rights agencies, argue that the radio industry’s profits are increasing at a time when the music industry is suffering. The Liberals say the mechanical royalty payments amount to 5.7 per cent of the industry’s revenues. Courtemanche said the Liberal party’s proposed amendments came as a surprise to the CAB, which had been in talks with the party about the provision. She said the ads are airing across the country but, right now, not in Quebec. Stations are running the ads at a rate of about 20 rotations per week, she said. She added that the advertisements have been airing for about a week and will continue as the legislative committee on Bill C-32 meets. “While this thing is under review by the committee, we’re going to encourage people to participate in the process. We think it’s a democratic thing to do. We want people engaged on this issue,” Courtemanche said. She made the comments Thursday after a number of radio broadcasters exchanged some fervid words with opposition MPs at the legislative committee on Parliament Hill. The ads seem to have attracted the attention of a number of MPs on the committee. Liberal MP Dan McTeague said the Liberals are now hearing about the issue, and that it “certainly has my attention.” He said the CAB “attack ad” was being leveled at his party “for coming up with some rather innovative ideas to try to provide balance” to the bill. “My point is you’re crying poor when you’re making a lot of money,” McTeague said during an exchange with Courtemanche. “It upsets me to no extent that you’re coming here and suggesting to us that somehow you’re not making any money.” But Courtemanche said radio stations’ copyright fees have increased 140 per cent over 10 years, during which time stations’ revenues have increased 40 per cent. Brad Phillips, president of the British Columbia Association of Broadcasters and vice-president of British Columbia operations at Astral Radio, told the committee that the process of transferring music from one computer to another does not have any value to broadcasters, but still they have to pay for it. He said that, as a result of increasing copyright tariffs, radio broadcasters are looking at their operations and questioning whether they can afford to operate. “There are radio stations closing in this country,” Courtemanche added. But McTeague expressed doubt about whether radio broadcasters are closing due to the cost of the reproduction right alone. “I think you’re overstating the case,” he said. “Technology is allowing you to do more with less.” The Copyright Board estimates that, in 2009, commercial radio stations paid $72 million in royalties and that total station revenues were $1.5 billion. The board also says the number of commercial radio stations in Canada has grown from 565 in 2005 to 644 in 2009. The total royalties for the reproduction right costs the industry about $21 million annually. NDP MP Charlie Angus said at the committee meeting that, if broadcasters are concerned about royalties going to foreign companies, they should play more Canadian music to keep the money in the country. But Phillips said Angus shouldn’t suggest ways for radio stations to restructure their operations. “To not play what’s best for our audiences and ignore the proper programming of our stations so that we can overcome this inequity is … illogical,” Phillips said. “You’re giving us a specious argument,” Angus responded. “You’re coming here and warning us about big, bad multinational , when that’s part of your business. That’s why you pay them.” Courtemanche said Bill C-32 will require compromises between the parties at some point, suggesting that one or more could change positions. A confidence vote on the budget this month could dissolve Parliament, triggering a federal election and killing all legislation. The Conservative government is standing behind the provision in the bill. Conservative MP Ed Fast said during the committee meeting that the radio broadcasters “articulated what millions of consumers across Canada know.” Consumers that buy music should be entitled to freely shift it to various devices, he said. “They understand that once they’ve paid for it, they shouldn’t have to repeatedly pay for it again when they transfer it. Somehow, my Liberal, NDP and Bloc friends don’t get that,” Fast said. Courtemanche said she anticipated that the ads would get the attention of the Liberals. “We knew they would be upset, but you know what? We were upset. We wanted to make sure that they understood,” she said. sdoyle@thewirereport.ca

Radio broadcasters target Liberals in copyright ad campaign

Broadcast | March 3, 2011

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