Ottawa - I never thought that for an 8:30 Monday morning meeting with two federal cabinet ministers, the musicians would be on time and the politicians late.
But here we are, the Barenaked Ladies' Steven Page and Broken Social Scene's Brendan Canning and I, sitting in deep cushioned chairs high above Ottawa's clean city streets at the offices of Industry Canada, passing the time. The Conservatives have been waiting 13 years to get back into government - so what's 10 minutes to a few bleary-eyed rock and rollers.
In truth, getting face time with Heritage Minister Bev Oda and Industry Minister Maxime Bernier before the government tables new copyright legislation, expected in the fall, happened much faster than we imagined.
After all, it was only two weeks before that the Canadian Music Creators Coalition (CMCC) went public with backers like Avril Lavigne, Sam Roberts, Feist and, yes, the Stampeders, among many others and entered the fractious copyright debate to declare that digital music sharers are not the enemy.
Musicians, are famously - and with good reason - reluctant to step into the political fray. But they have watched the file-sharing debate being framed by lobbyists from the Canadian Recording Industry Association (CRIA), which primarily represents shareholders in the large multinational record companies. And many don't like what they see.
The CMCC isn't advocating that music should be free. What we're saying is that peer-to-peer (P2P) file-sharing - downloading and sharing music - is how an ever-growing legion of fans experience their music. It has become a phenomenal promotional tool for major-label acts and indies alike. Just ask Arcade Fire and Broken Social Scene. It has also enabled an exploding community of artists with no label affiliations at all to distribute their work and find an audience.
What many musicians have been muttering under their breath for quite some time is, "Ya know, what's all this talk about the demise of the Canadian music scene? People are at the shows, they're buying T-shirts and CDs. And a big part of the reason is that they're downloading the songs. This is pretty cool.'
But Sony/BMG, Warner, Universal and EMI have chosen to sue thousands of fans in the U.S. Their Canadian affiliates have attempted unsuccessfully to do the same and have suggested they may try again. The U.S. industry has also won legislation that not only allows digital locks (called Digital Rights Management), but also makes it illegal for these to be circumvented. (Locks are a code embedded in your CD or music file that can make discs inoperable in your computer and impossible to upload to another media player like an iPod. Locks on files purchased, for example at the iTunes music store limit the number of computers a song can be played on).
The Canadian industry is gunning for the same protection.
Rather than making downloading difficult and illegal, the CMCC believes that fans should be able to enjoy and share music any way they choose. And, yes, artists, songwriters, music publishers and labels should be paid for their hard work and investment. How?
There are numerous approaches. The way other businesses deal with copyrighted content may provide some clues. Radio stations, for example, pay licence fees for the right to play whatever music they want - subject, of course, to their CRTC mandate.
Those fees are calculated as a percentage of advertising and other revenues generated by the stations. The money is collected and disbursed to performers, publishers, songwriters and record labels. In other words, all the rights holders get a piece of the pie. Could a similar system be developed on the Net?
How about record companies licensing P2P networks the way they do radio? Research suggests that the industry could have made huge profits if it had licensed Napster in the first place rather than trying to shut it down. Or the labels could make deals with Internet service providers like Rogers, Bell, etc., as they have for ring tones. The ISPs could pass those fees on to their customers in the form of a slightly higher monthly bill or, again, through advertising deals.
There is already a private copying levy on blank CDs and tapes, one that yields about $30 million a year in revenue that is earmarked for rights holders. It isn't a perfect system yet, but perhaps it's time for the feds to place a levy on computers and media players like the iPod.
If the U.S. example is any indication, litigation and digital locks have not killed and cannot kill P2P. At the same time, missed opportunities to compensate artists and labels continue to abound.
But this shouldn't become a pissing match between artists and multinational record companies. People who work in those companies are often dedicated music fans, and it isn't pretty watching friends in the business lose their jobs.
There's no doubt that music sales in Canada have dropped over the last five years despite the healthy climate for Canuck bands. While the reasons for this are intensely debated, what is certain is that P2P file-sharing isn't the only one.
To begin with, sales were inflated in the 90s by consumers re-purchasing their vinyl and tape collections on CD. Moreover, big-box stores like Wal-Mart, which carry far fewer titles than conventional record stores and sell them at rock-bottom prices, have become the largest music retailers in Canada. For them, music is a loss leader to get people into the store to buy toasters.
Some estimate that this factor alone has caused an 8 per cent drop in the major labels' bottom line. And then there's the competition from video games and DVD sales, as well as the success of the iTunes Music Store, which allows consumers to buy only the songs they want from an album.
But CRIA has done its work. It was obvious when we met with Oda and Bernier - and the opposition parties' Heritage critics later that day - that most parliamentarians have been so inundated by the music industry spin that the question of the day became "If we don't sue and lock down content, what do we do?" The pols seemed surprised that there was any other way to react.
By the time we arrived at the Ottawa airport - late for our flight home but on time for a beer - the brainstorming was intense. What about a flat-rate scheme like cable TV? Treat the Internet like a water utility. You pay for it based on how much you use, but you can use it any way you want.
Who knows? We're not the business guys. But it seems that instead of fighting the fans, everyone needs to remember the ancient retail truism: the customer is always right.
Music Biz Amps Up Message
Excerpted from a recent speech by Graham Henderson, president of the Canadian Recording Industry Association.
In Canada, for every legal song or video file downloaded and paid for, 14 files are swapped without compensation of any kind. Outsiders perceive Canada as a backward nation that doesn't respect or protect one of its most precious resources - intellectual property.
Over the past six years, Canada's music industry has lost $586 million at retail and been forced to cut 20 per cent of its workforce. The well-known example of Jully Black speaks volumes. Coincident with the release of her debut album, fans swapped her tracks at a ferocious rate - 2.8 million requests within a period of two weeks. Her CD struggled to achieve sales of 15,000 units. And she isn't alone.
The laxness of our environment is gaining worldwide attention. Increasingly, nations are moving to strengthen the rules that protect their intellectual property. The U.S. has introduced legislation that would mandate digital rights management systems for satellite and digital audio broadcast signals. This was hailed by tens of thousands of American recording artists. Businesses must develop technological solutions to make it increasingly difficult for people to take other people's property.
It is important for government to set the tone about what constitutes acceptable behaviour in a civil digital society. If, after a time, we find that there are intransigent individuals who simply will not respect an artist's decision to require payment, then lawsuits may be necessary.
Now, will this work? Let's look at the experience outside of Canada. Legal buying is more popular than P2P in Europe's two major digital markets, Germany and the UK. In other words, people pay attention to the rules.