“Minding the Gap” in Canada: But Which Gap?

An interesting “gap analysis” argument has been taking place in Canada, played out in op-eds in insider news outlets such as Ottawa’s Hill Times (sorry, subscription only) and in broader discussion forums. The debate, if I can call it that, was initiated by Michael Geist, a prolific commentator on copyright and technology issues, who is based at the University of Ottawa. According to Dr. Geist, there is a “fair dealing gap” in Canada as a result of copyright reforms in 2012 that allowed Canada to implement the WIPO Internet treaties that it had signed a number of years previously. This alleged “fair dealing gap”, according to Geist, is a result of the Technological Protection Measures (TPM) provisions that were established as part of the legislation. These provisions prevent illegal circumvention of the digital protections rights-holders place on their content in order to control and prevent unauthorized access to that content.

Access controls become the key to opening the door to digital content, allowing the owner of the content to permit access to consumers in return for agreed terms, normally payment of a specified amount. They are essential for any successful business model in the digital environment because they not only prevent unauthorized access, which would undermine the business model, but they permit differentiated access, such as longer term enjoyment of the content in return for a higher payment. Critics like Geist argue that fair dealing provisions that allow exceptions to copyright should override TPMs. To cite an example from this blog, the Geist theory would allow anyone to break into the content of the Hill Times, which is behind a paywall for obvious commercial reasons, on the basis that there is a fair dealing exception for research, or educational purposes, or parody or whatever exception the hacker chose to offer for using the content. No digital business model could work under such circumstances.

To perhaps state the obvious, (and given that “Fair Dealing Week” was just celebrated from February 20-24), fair dealing allows copying of available copyrighted material under certain specified conditions. While it is a right and not just a defence, it does not and was never intended to provide a licence to break into restricted materials or bypass access controls (TPMs) in order to exercise those rights. Put another way, if a rights-holder chooses to make available to the public certain copyrighted materials, some of that material may be copied by others for limited and specified purposes without the permission of the rights-holder. If the rights-holder chooses not to provide open access to the copyrighted materials for commercial or other reasons, why should there be an automatic right of access to allow copying by others even if for fair dealing purposes? Where is the “fair dealing gap”? The only “gap” that I can find in this situation is a gap in logic.

There is however another “gap” that people are talking about that is very relevant to copyright industries and creators and that is the “value gap”. This gap can roughly be described as the difference between real and potential earnings for creators in the digital age. We all know that the digital environment has shaken up traditional products and business models, delivering new ways for consumers to access content and new platforms for creators to reach those consumers. The digital revolution has impacted all of the traditional copyright industries; music, film and television, books, art, photography. More content than ever is being accessed by more people….but the value of content creation to the artistic community, as measured by real returns, has been in steady decline.

Music Canada’s President, Graham Henderson, estimates that over the past 18 years, music revenues in Canada fell by 80% compared to what they would have been had they kept pace with inflation and real GDP growth. This has led to a value gap of over $12 billion over this period in Canada alone. (Globally music sales are down 70% since the beginning of the digital era). Henderson reports that the average music artist in Canada in 2011 earned just over $7000 a year. Writing is no more economically sustaining. The Writers’ Union of Canada did a recent survey that showed the median net income for writers in Canada was less than $5000, with 80% of writers earning an income from writing that is below the poverty line. The report was aptly titled, “Working Harder While Earning Less”.

The result is that it is becoming increasingly difficult to sustain life as a full time artist. This was part of the reason for the campaign organized by Music Canada, the Writer’s Guild and a number of other artistic organizations, “Focus on Creators”, to reach out to Canadian Heritage Minister Melanie Joly as part of her current review of cultural policy. The message to the Minister was that full time creators are being squeezed out of the marketplace, and a number of ways were suggested as to how this phenomenon could be addressed (from subsidies to fewer copyright exceptions).

It is not that content has lost its value; the problem is that the profits from search, aggregation, and social media platforms have grown exponentially while generally speaking the economic benefits have not been shared proportionally with most of the content industries. In other words, the Googles, Facebooks, Youtubes and other similar platforms have reaped huge online revenues driven by content, but only a relatively tiny proportion of those revenues has trickled back to the creators of the content. In fact, as Toronto IP lawyer Barry Sookman has pointed out in his blog “Fix the Value Gap-A Reply to Michael Geist”, the search engines and platforms have been protected by digital safe harbour provisions in national laws, absolving them of responsibility for displaying and promoting links to infringing material, which is the very behaviour that in many cases drives the traffic to their sites enabling them to maximize their ad revenues.

There is no easy solution to the values gap. Henderson calls for a “holistic and multijurisdictional” approach based on four pillars; 1) domestic legislation 2) policies and treaties 3) program funding and 4) institutions. Legislation would address the cross-subsidization by creators of other parts of the value chain. One way to do this is to re-examine the degree to which content aggregators and search engines can continue to be absolved of all responsibility for the content they index and promote and to require fair payment for use of content. Policies and treaties can open markets and promote and protect cultural exports. Program funding in support of the arts is an important part of any country’s cultural arsenal and investment in institutions that support the creative arts is an investment in the future of the digital economy.

“Minding the gap”–the values gap–in Canada and elsewhere is important to the continued sustainability of our artistic communities and cultural industries. Equitable sharing of the revenues generated by creators and creative industries is one of the major challenges to solve if we are to ensure continued and vibrant growth of the digital economy.

© Hugh Stephens, 2017. All Rights Reserved