2020. The Annus Horribilis—but Creators and Creative Industries will Bounce Back

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They say that hindsight is 20/20. Well, looking back at 2020, the annus horribilis, one could be forgiven for not having a clear view of what was to come when the year began, with vague rumours circulating of yet another virus in China emanating from wild animal markets. Surely it couldn’t be as bad as SARS? As this challenging year draws to a close, we are all a little bit wiser and a little bit more skeptical of the “don’t worry; it’s all under control” messages from those who are supposed to know.

COVID-19 around the World

Looking back at 2020 wearing a copyright lens, what do we see? It’s been a devastating year for creators, especially those who perform live for a living. Early in the pandemic, in March, just a couple of weeks after the first lockdowns were imposed, I wrote about the initial response from governments and others to the plight of creators who saw their livelihoods imploding. Concerts, plays, and other stage performances were cancelled overnight. Galleries, libraries, bookshops and record stores shut down. Half the world (the half with internet access) went online. Creators and creative industries responded with a range of virtual offerings and new online materials for adults and children. Unfortunately, others took advantage of the situation to advance their own agendas, like the Internet Archive’s unilateral declaration that it would be happy to make other people’s (copyrighted) works available online for free. As I wrote in April in this blog, (“COVID is Not an Excuse to Throw the Accepted Rules Out the Window: Copyright as the Canary in the Coalmine.”);

“…it is extremely disappointing to see special interest groups taking advantage of the COVID crisis to push their personal pre-COVID agendas. In the case of copyright, this consists of using the crisis to attack the fundamentals of copyright protection, namely the right of creators to control distribution of their work, and thereby to earn a return on the sweat equity they put into the creation in the first place.”

By the fall we were into the “second wave” and the impact of the pandemic on the copyright and cultural industries was even more apparent. My blog in November “Covid and Culture: What’s Around the Corner”) chronicled the damage to cultural institutions, such as museums and heritage sites in various parts of the world where the lack of visitors has, in some extreme cases, resulted in lack of maintenance, vandalism and a cessation of research and preservation activity. The economic damage to the creative sector even in western countries with generous government financial support programs and good internet infrastructure has been devastating. Brookings estimated that the cost to the creative sectors in the US for just the period April to July to be about $150 billion with the loss of 2.7 million jobs.

New Copyright Interpretations in Canada Compound the Challenge

The economic hit from COVID was compounded by the ongoing value gap faced by performers trying to live off the digital pennies distributed by online platforms and, in Canada, a court decision that had the effect of undermining an important element of copyright protection. This was the result of the ongoing legal saga pitting York University versus Access Copyright, a landmark case which took yet another twist. Back in 2017, Access Copyright (AC), the copyright collective representing authors and publishers, won a significant victory at the Federal Court regarding York University’s unlicensed use of materials in AC’s repertoire. The Court ruled that York (which was in effect acting as the proxy for most post-secondary institutions in English Canada) was required to pay the interim tariff (i.e. regulated license fee) established by the Copyright Board of Canada for use of AC’s materials, while it also dismissed York’s claim of fair dealing with regard to its use of these materials. In other words, the Federal Court ruled that if any content within AC’s repertoire was used, payment of the tariff was mandatory, not discretionary. York appealed.

In April of this year the Federal Court of Appeal (FCA) delivered a stunning decision. It overturned the initial ruling that had affirmed the mandatory nature of the interim tariff and went on to declare that all tariffs, interim or final, established by the Copyright Board are discretionary. Moreover, the FCA declared that payment of the tariffs always had been discretionary despite decades of practice based on the assumption that once certified by the Board, tariffs were applicable to all who used materials in a copyright collective’s repertoire, whether licensed from the collective or not. This stood the established copyright order on its head, as I wrote in a blog posting, “When is a Mandatory Copyright Tariff mandatory only if you Opt-in?”. The FCA’s decision has in turn been appealed to the Supreme Court of Canada, which has agreed to hear the case. This could, however, take years. In the meantime it would be far better for Parliament to address this anomaly by amending copyright legislation to undo the damage of the FCA’s decision. There are expected to be opportunities to do this in the next year or so as there are several copyright-related issues that need addressing.  

News Publishers vs Big Internet Platforms: Revenue Sharing in France, Australia and Elsewhere?

One such issue is that of the relationship between the big internet platforms and news providers. There is growing global pressure for the introduction of measures to require the platforms to share with content providers some of the online advertising revenues that are generated by using excerpts of their content in search listings and social media posts. France and Australia have been the first two countries out of the starting blocks on this, although the UK, Canada and some EU countries have not been far behind. There has been less pressure in the US, although a proposal has been floated in Congress to grant an anti-trust exemption to news publishers to allow them to negotiate collectively with the platforms without falling afoul of competition law.

As I wrote back in April (here), in France the authorities took the gloves off and gave Google three months to engage in good faith negotiations with publishers to come up with an agreement that would result in payment to news content providers. France was thus the first EU member state to put in place measures to implement a new “neighbouring right” provided to publishers as part of recent revisions to the EU Copyright Directive. Google appealed the French Competition Authority’s ruling, and lost. The result has been a recent announcement that Google has finally reached agreement with six major French news publishers, including Le Monde and Le Figaro, on a revenue sharing deal. This isn’t the first time that Google has blinked.

In October of this year, Google announced it was establishing a $1 billion fund (over three years) to pay for curated news content, starting initially with Germany, Brazil, Canada, the UK, Australia and Argentina. Most of the initial agreements were with smaller, lesser-known publications. Perhaps not surprisingly, these are countries where governments have been actively pursuing measures to level the playing field between those who create the content and those who benefit financially through distribution or indexing of this content. Australia has been particularly active, through its competition bureau, the Australian Competition and Consumer Commission (ACCC), which has developed a draft News Media Bargaining Code, targeted particularly at Google and Facebook.

Both platforms pushed back strongly, trying to mobilize Australian consumers to oppose the ACCC’s plans by threatening to reduce or curtail services. The Australian government indicated in no uncertain terms that it was not prepared to back down, and Google was denounced by Australian Treasurer Josh Frydenberg for using bullying tactics. Immediately after Google announced its media fund, (which included some smaller Australian media players), it promptly put its Australian program on hold because of its unhappiness with the ACCC’s draft code. As I wrote at the time, it was a classic case of bait and switch. (“Google in Australia: Dangle the Carrot, then Yank it Away”). That tactic didn’t work, however,  and in early December of this year Australia proceeded to introduce legislation that will require Google and Facebook to negotiate with Australian news organizations for use of their content in Facebook’s Newsfeed and Google search. If the two sides are not able to reach agreement, there is provision in the legislation for compulsory arbitration. Many countries, including Canada, the UK and the EU are watching to see what happens in Australia.

In Canada, after having announced that its newly announced media fund would include Canadian media, Google likewise suspended its program pending negotiations with major media outlets. It has managed to sign up only two small digital news platforms. The major players, who are all members of the industry association News Media Canada, have mounted a major campaign to get the Canadian government to follow the Australian example. In November they released a study “Levelling the Digital Playing Field”, that takes aim straight at Google and Facebook, seeking revenue sharing for the platform’s use of news content;

Google and Facebook are two of the biggest companies in the world.  You might say they’re modern-day Goliaths. They are using their monopoly power to scoop up 80% of online advertising revenues and to free ride on the news content produced by hardworking journalists and publishers across Canada. Maybe it’s time to start leveling the playing field a little, so the Davids of this world can start fighting back.”

Not that the major Canadian media players are exactly “Davids” but they are facing financial stresses like most media organizations globally. One response has been a Canadian government promise of tax credits to support the hiring of journalists, but this program has yet to be rolled out despite being announced two years ago. Back in 2017, publishers proposed direct subsidization of journalist wages, a proposal that provoked considerable debate and negative comment. These kinds of subsidy programs are controversial because they smack of government intervention, potentially compromising media independence, although the Local Journalism Initiative, a five-year $50 million government-funded program is now in effect, administered by none other than News Media Canada, along with some smaller non-profits.

Amending copyright legislation to create a “publishers’ right” (as is the case in the EU) is another proposal that would strengthen the hand of content creators in negotiating with the major digital platforms. Back in September I speculated that Heritage Minister Guilbeault might introduce such legislation in the fall session of Parliament, but this has not happened as the Ministry is instead preoccupied with legislation to amend the Broadcasting Act. Although providing additional neighbouring rights under copyright legislation is one option, News Media Canada seems to prefer the Australian approach of using competition law to force the platforms to negotiate revenue sharing. This ongoing tussle between the top digital platforms and news content providers is one of the big copyright stories of 2020, and the push to require Google and Facebook to share the wealth—ad revenues created in part from their unlicensed use of content created by others—is one of the few bright spots for creators coming out of 2020.  What the final result will be in 2021 remains to be seen.

The Coming Year

And speaking of 2021, let’s hope it will be a better year for everyone including those in the creative sector. As I write, the first vaccine shots are being given in several countries, and therein lies hope that the rhythm of life will resume a more normal pace in the coming year. If the pandemic has taught us anything, it is that the creative arts are among the things that make life worth living. A world without culture and creativity would be a pretty bleak place. The copyright world, along with many other sectors, took a huge hit in 2020, but the arts and its practitioners are resilient.

Speaking personally, I am looking forward to the resumption of live theatrical and musical performances, being able to escape to a big-screen experience at a local cinema and enjoying art and photographs at a gallery or museum without wearing a mask and keeping two metres away from everyone around me. (That is besides getting my hair cut properly!). We will only know from hindsight whether these hopes will be realized, but perhaps a year from now when we look back at 2021, we will declare it to have been the year of recovery. Fingers crossed.

© Hugh Stephens, 2020. All Rights Reserved.

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