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The Songwriters Association of Canada Wants To Embrace File Sharing, But Does It Have the Right Approach?

This post originally appeared on Techdirt.

in 2007, the Songwriters Association of Canada gained some international headlines with a proposal to legalize non-commercial peer-to-peer file sharing through an ISP levy. This sort of proposal wasn’t new, but had not been so prominently put forth by an artist organization before. There were serious problems with the proposal, but it stimulated a healthy debate and it started from many correct premises — that file sharing should be embraced, that digital locks and lawsuits were not a way forward, etc. But it was a non-voluntary, “you’re a criminal” tax that could open the floodgates for other industries to demand similar levies.

I was a member of the Songwriters Association of Canada from 2007-2011, and I had the opportunity to express my concerns about the proposal to many people involved. Last year, I attended a session with an update on the proposal, and was surprised how much it had changed. The proposal had dropped the legislative angle in favor of a business to business approach, with an actual opt-out option for both creators and customers of participating ISPs. Unlike groups behind other licensing proposals, the SAC has actually been responsive to many concerns, and unlike other artist groups, the SAC takes a decidedly positive view on sharing music and the opportunities technology provides to creators. This attitude comes through in the proposal:

Rather than a legislative approach to the monetization of music file-sharing as we originally envisioned, the S.A.C. is now focused on a “business to business” model that requires no new legislation be enacted in Canada.

Our basic belief however remains the same: Music file-sharing is a vibrant, open, global distribution system for music of all kinds, and presents a tremendous opportunity to both creators and rights-holders. […]

People have always shared music and always will. The music we share defines who we are, and who our friends and peers are. The importance of music in the fabric of our own culture, as well as those around the world, is inextricably bound to the experience of sharing. [emphasis changed]

As the copyright debate heats up again in Canada in light of SOPA and new pressures on pending legislation, this positive attitude towards peer-to-peer file sharing was expressed again in a recent TorrentFreak interview with the SAC VP, Jean-Robert Bisaillon:

We think the practice [of file-sharing] is great and unstoppable. This is why we want to establish a regime that allows everyone to keep on doing it without stigmatizing the public and, instead, find a way for artists and rights holders to be fairly compensated for the music files that are being shared. […]

Other positive aspects include being able to find music that is not available in the commercial realm offer, finding a higher quality of digital files, being able to afford music even if you are poor and being able to discover new artists or recommend them to friends. […]

Music is much better off with the Web. The internet network allows for musical discovery despite distance and time of the day. It has sparked collaborations between musicians unimaginable before. It has helped artists to book international tours without expensive long-distances charges and postal delays we knew before. [emphasis added]

However, significant problems remain with the proposal. For example, the original criticism still stands as to how this would scale for other industries — what about book publishers, newspapers, movie studies, video game manufacturers and other industries that are also crying foul about “piracy”? The SAC dismisses other cultural industries pretty quickly, as if only the music industry is concerned about unauthorized copying. And, just like private copying levies have suffered from scope creep, as people no longer buy blank audio cassettes or CDs, or short-sightedness, as technology changes rapidly, it’s not clear how the SAC model would adapt to growing wireless and mobile computing or more distributed file sharing. Many more questions remain: Would small, independent artists, who are not charting through traditional means, get fair treatment? Is it wise to largely rely on a single, proprietary vendor, Big Champagne, for tracking all distribution? Would consumers be paying multiple times for music? What does it mean to “self-declare not to music file-share” in order to opt-out?

But the central problem with the proposal is the SAC’s copyright crutch. Jean-Robert Bisaillon says things like,

The Internet has dramatically increased the private non-commercial sharing of music, which we support. All that is missing a means to compensate music creators for this massive use of their work. [emphasis added]

And the proposal says things like,

Once a fair and reasonable monetization system is in place, all stakeholders including consumers and Internet service providers will benefit substantially. [emphasis added]

The SAC seems obsessed with a “monetization system,” when the truth is there is no one model, no magic bullet. Rather, the the sky is rising and the path to success involves all sorts of different models and creative approaches, most of which don’t depend on copyright or worrying about getting paid for every use. Even a voluntary license plan is still a bad idea. The means to compensate music creators isn’t missing, it’s just increasingly found outside of copyright.

Still, it’s important for the SAC’s voice to be heard as the copyright debate heats up again in Canada. As a creator group offering a positive take on peer-to-peer file sharing, and denouncing an “adversarial relationship” between creators and fans, they offer an important counterpoint to the SOPA-style provisions being pushed by Canadian record industry groups. I would take the SAC’s constructive and responsive approach over record industry astroturfing and fear mongering any day.

Read the comments on Techdirt.

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Songwriters and musicians disappointed with Bill C-61

I’m proud to be a member of both the Songwriters Association of Canada (SAC) and the Canadian Music Creators Coalition (CMCC). Both organizations have expressed their disappointment with Bill C-61. It’s not that hard, really, but it’s noteworthy since the bill is supposed to be “protecting artists.”

The SAC is concerned about their proposal to monetize peer-to-peer file sharing (aka the music tax), which I’ve described as a forward thinking approach from backward thinking minds. The proposal has the right idea (to embrace the technology), it just goes about things the wrong way (namely, the fee is involuntary). Bill C-61 would completely undermine any attempt to accommodate the technology. The SAC’s response to the bill is quite critical:

C-61’s intent to halt [unauthorized file sharing] will be very expensive, will erode the good relationships we have with music lovers and will not be effective…

Where the SAC music file sharing proposal is consumer friendly in that it embraces file sharing… bill C-61 is unfriendly to music file sharing and would make this very popular activity clearly illegal;

Where our proposal is economically viable and is designed to generate income for creators and rights holders, the bill C-61 approach to file sharing is not economic for rights holders. Money generated through lawsuits would simply go to legal costs;

Where our proposal is practical and sensible in that it builds on existing activities… the bill C-61 regime would be impractical relying as it does on enforcement and punishment to reverse how many consumers access our music.

The CMCC’s response is even harsher:

It’s all locks and lawsuits… Suing fans won’t make it 1992 again. It’s a new world for the music business and this is an old approach… The question is, who gains from this bill? It’s not musicians. Musicians don’t need lawsuits, we don’t need DRM protection. These aren’t the things that help us or our careers.

If artists are against Bill C-61, who is it supposed to be protecting?

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The Problem With A Music Tax

I’ve written about the SAC‘s proposal to legalize music file sharing several times in the past, giving it mixed reviews. It’s not a new idea, but it’s one of the first times an organization of artists has proposed it, and some record companies are entertaining the idea as well.

I’ve come to a decision about the proposal: I don’t like it.

Royalties were not designed for the digital age. The proposal suggests what essentially would amount to a music tax. There is no way to opt-out and it applies to everyone with an internet connection. Since when are royalties taxes? Since when do royalties apply to everyone? Royalties were meant to regulate a few large distributors and broadcasters. In the digital age, everyone can be a distributor or broadcaster. It just doesn’t work.

The CMCC describes this as a “forward thinking approach.” It’s a forward thinking approach, but from backward thinking minds. Royalties are not the answer to everything.

The no opt-out clause really makes it a deal breaker. The proposal is to charge everyone a fee, regardless of whether or not they are actually infringing any copyright claims. It’s aptly described as a “you’re a criminal” tax.

The EFF writes:

We are big fans of a collective licensing solution for the music file-sharing dilemma: music fans pay a few dollars each month in exchange for a blanket license to share and download whatever they like; collecting societies collect the money and divvy it up between their member artists and rightsholders…. But this should not turn into, as some have called it, an “ISP tax.” Any collective licensing solution should be voluntary for fans, artists, and ISPs alike.

Further, what sort of precedent would this set? Mike Masnick writes:

The biggest reason, as Geist points out, is the second you do this, plenty of other industries will come out of the woodwork demanding a special fee get applied to internet connections as well. Newspapers that think Google and Craigslist are “stealing” from them will demand a special “news tax.” And then think of all those other industries who claim they’re being impacted by the internet. You’ll have a special auto-mechanic’s tax, to pay for mechanics who are upset about the DIY info found online. The “knitting tax” for all the free knitting patterns online. I understand that AAA may be upset about Google maps. Travel agents want that “travel tax” to pay for all that business that Expedia has cost them. Where does it stop?

I do applaud the SAC for bringing forth this proposal and I’m proud to be a member. It is “forward thinking” in the sense that it seeks a way to make the new technology work, rather than to pretend it can be somehow stamped out. But I don’t think this particular proposal provides an answer.

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Analyzing the Songwriters Association of Canada’s proposal to legalize file sharing

Since the Songwriters Association of Canada (SAC) proposed to legalize file sharing, many Canadian groups have responded, both positively and negatively. The Canadian Music Creators Coalition called it a “forward thinking approach” that ought to be discussed, while foreign corporations’ Canadian representatives (such as the Canadian Recording Industry Assocation) slammed it as a “pipe dream.”

I first heard about this proposal in November, a few weeks before it was finalized and announced, through the Songwriters Magazine I receive as a SAC member. My initial reaction was a negative one, but as I contacted them and exchanged a few emails with Eddie Schwartz – the proposal’s architect, or at least overseer – I warmed up to the idea a little bit. There were still some concerns left lingering though.

Now that I’ve had some time to think about it, I’m going to revisit and review the proposal to outline what I consider its strengths and weaknesses, as well as remaing questions I have.

(Numbers refer to the points listed in the proposal.)

What I like

I strongly support the SAC in bring forth this proposal. This is certainly the type of thing we need. It considers artists rights and freedoms as well as the rights and freedoms of music fans without taking a position to suggest that there needs to be a conflict between those varying interests.

The proposal looks at ways to legalize the act of file sharing rather than pretending it can be stomped out of existence and viewing it as a negative thing. It acknowledges that “file sharing is both a revolution in music distribution and a very positive phenomenon.” (2)

The proposal covers all types of file sharing from one individual to another for non-commercial purposes, regardless of the medium (ie. LAN, hard drives, CDs, DVDs, email, etc.). (5)

The new “Right to Equitable Remuneration for Music File Sharing” would not conflict with commercial music services, which could still continue to provide “value added” services for a fee. (9) One example would be security, in paying for a track from a commercial store, listeners could be assured that the files they download won’t contain any malware. Other examples could include digital album art, videos, etc. There would still be a market for additional and professional services. Take bottled water for example. In a country like Canada, we are fortunate enough to have easy access to water for essentially no cost, yet the bottled water industry is extremely profitable.

What bugs me

The fee is to be collected by ISPs, when it’s not really their responsibility. It does feel like a tax. There’s no way to opt-out included in the proposal, so my grandparents – who are surprisingly computer savvy, but don’t download music – would be paying the fee, as well as my office. Society doesn’t owe artists some sort of social welfare. Also, this makes the proposal difficult to implement if it requires cooperation from other groups to collect this fee.

I don’t trust Big Champagne (or other similar companies) and I don’t want a company, or a collective for that matter, deciding to which artists my money goes. Big Champagne uses all sorts of proprietary software to do their analysis, so there’s little chance for transparency or review of their methods. More importantly, the decentralized nature of file sharing makes it extremely difficult to measure. They may be able to monitor peer-to-peer networks, but they have no hope of monitoring songs shared via email or flash drives. I’d much rather play an active role in financially supporting artists. If I like an artist, I will buy their CD or go to their concerts. I’d like an opportunity to be able to support an artist when downloading music (e.g. Radiohead’s pay-what-you-can experiment), rather than relying on some organization to sent them pennies in the mail for my download.

Even if a minority of music listeners compensate artists in some way after downloading music (though the latest government study suggests that music downloaders buy more music), there are a wide variety of business models that can make a ton of economic sense. But that’s for another post…

Also, I find downloading much more useful for sampling purposes than as a substitution for purchases. How is it going to be determined whether a track I downloaded was listened to once and then deleted, or whether it became a favourite of mine? If it were a favourite, I’d gladly pay money for it. If I had to pay to sample it, I probably wouldn’t download it in the first place.

Most Importantly…

This is a free culture issue to me (free as in freedom). The laws should be based on respecting people’s freedoms and creating incentives for artists to produce songs. There is no natural right to a monopoly over works you produce as an artist; an artificial monopoly is granted, only insofar as it benefits society as a whole.

What sorts of things should people be allowed to do with music files they have obtained legally? That’s the fundamental question.

I believe they ought to be able to do virtually anything for personal use, which includes creating backup copies and format shifting. I also believe that people ought to be able to share things they own with their friends. If I like a song, I should be able to share it with a friend who might also like it. The fact that I can keep a copy for myself while doing this is a blessing, not a curse.

In a way, peer-to-peer file sharing is just that. But… does scale change the nature of the act? If I want to share a file with a stranger, that should be within my rights. But when millions of strangers get together and make virtually any songs available, does that change the nature of the act of sharing?

I don’t believe so. I’m not entirely convinced, but I can’t seem to grasp how the difference in scale would change the fundamental nature of the act.

If people should be allowed to share things they own with other people, they why should anyone owe money for file sharing anyways? It would be great to develop a way, a system, for interested music listeners to support artists financially, but if it’s reasonable for me to be allowed to share my possessions with others, then it would be wrong to force me to pay to exercise that freedom.

The Creative Commons Music Sharing License – which I’ve been using for my music – allows music files to be shared (copied, transmitted, distributed) so long as its for non-commercial purposes, with attribution and “as is” (ie. no derivatives). That seems to me a reasonable basis for true fair dealing of audio files. If that’s the case, why should we pay a fee for those rights?

I applaud the SAC for their proposal and believe it is certainly the type of thing we need to be discussing. I’ve signed on as a supporter. However, I’m a bit hesitant about making some special exception in the copyright act (with a fee attached) rather than re-examining fair dealing provisions.

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The difference between theft and copyright infringement

While I was very pleased with the proposal the Songwriters’ Association of Canada recently put forth to legalize file sharing in Canada, I couldn’t help but slam my head against the table when reading the “what some music creators have to say” link.

With the exception of the a few (most notable the Canadian Music Creators Coalition), the comments were laden with words such as piracy, thievery and stealing. There are some fundamental misunderstandings here, obviously; many of these songwriters just don’t get it.

But some of them made comments that were just plain stupid.

There is absolutely no difference between stealing a piece of recorded material which has accumulated costs all the way down the line during its production (recording studios, engineers, recording
equipment which must acquired and maintained, artwork, printing, promotional materials and publicity– all this must be paid for) and stealing any other manufactured product. If the end product is taken without being paid for, there is no source from which to recover these costs, let alone any money for the artist to live on.

It is stealing — plain and simple.

It is no different than walking into a clothing store and stealing the clothes. Somehow the consuming public seems able to grasp this concept when it applies to sweaters, shoes, or groceries, but cannot understand that the same chain of costs and the need for the artist to recover those costs and to make a living applies to the world of recorded music.

I do not understand why this is, but it is well past time that someone other than the consumer put a system in place to help us keep our music from being stolen.

It is no different than the fact that pretty much all traditional retail stores now have, and have had for years, electronic scanners at the exits in order to alert them when someone is attempting to leave the store with items they have not paid for. We have a right to the income from the results of our labour, just as anyone else in any business has.

– Joan Besen

Joan Besen is so unbelievably confused about this. The claim that there is “absolutely no difference” between unauthorized copying of a digital audio file and the theft of a physical good is flawed right at the core. There is one very important difference. When you copy a file, you do not deprive the owner of their copy. When you take a physical item from someone, that someone no longer has that item in their possession.

Theft is universally considered to be wrong because you are taking something away from someone else. Copying a file is fundamentally different. It’s duplicating, not depriving. Far from “plain and simple” as Joan suggests, the issue of what kinds of copying should be considered infringement and what constitutes fair use is a complex legal question.

The analogy to manufactured goods just doesn’t hold. At the very least, it’s impossible to claim there is “absolutely no difference.” With manufactured goods, you need to recoup costs for every particular physical item because each particular item must be individually manufactured. With digital goods, the “manufacturing” process happens once. Once the original copy is created, manufacturing costs do not change whether the file is never shared with another or whether every person on earth has 20 copies of it.

In this important way, Joan, there is a difference between theft and file sharing. For this reason, theft is widely considered to be wrong (thou shalt not steal), but the act of file sharing is only wrong insofar as it is unauthorized or illegal. Distinguishing between fair use and infringement is often a difficult legal question, especially in our rapidly changing digital landscape.

Joan is right that artists need a way to recoup the costs of produce their art. That is what copyright was originally intended for, to provide an incentive through creating artificial monopolies for these artists, insofar as it increased the promotion of art for the public. But Joan is wrong that these costs need to be recouped through sales of songs. She is stuck with pre-digital economic thinking.

Traditionally, economics have been about scarcity. You have scarce resources (CDs), there is a demand for them (music fans) so you supply them with the product for a fee. In the digital world, we are dealing with abundance, not scarcity. Digital audio files are abundant, so the supply and demand model just isn’t the same unless you create artificial scarcity through copy protection schemes. Rather, you can leverage the abundant goods to provide extra value to the scarce goods. Through file sharing, artists grow their fan base as more people can listen to their music. Having a larger fan base creates a higher demand for scarce goods, such as concert tickets or merchandise, or even physical copies of the music (as in the case of Radiohead’s In Rainbows discbox). And you can still charge for the service of distributing abundant goods, like Radiohead’s pay-what-you-can model, or through an online store that makes music easily available.

There are ways to recover the costs of manufacturing without making the ridiculous assertion that there is actually no difference between theft and file sharing. In fact, that seems to be the only way to go as we enter further and further into the digital age.

More importantly, proposals like the one made by the Songwriters’ Association of Canada will not be accepted on the basis that everyone gets labeled as a criminal and is forced to pay a penalty upfront through their ISP fees (or for any recording medium). Rather, the public will embrace these sorts of proposals because of a genuine desire to compensate artists while accessing music in the way that they want.

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Songwriters’ Association of Canada proposes to legalize music file sharing

The Songwriters’ Association of Canada (SAC) has released a proposal to legalize music file sharing in the country (found via Michael Geist). They’ve proposed a new right – the Right to Equitable Remuneration for Music File Sharing – which would legalize noncommercial music file sharing by collecting a $5.00 license fee per internet subscription to be distributed amongst music creators based on file sharing patterns. This proposal would compliment the commercial distribution of music, whether through physical CD sales or through digital sales, and SAC claims it would render DRM (Digital Rights/Restrictions Management – i.e. copy protection) “obsolete”. The Canadian Music Creators Coalition (CMCC) is a co-signatory of the proposal.

The proposal recognizes that the technology is a blessing rather than a curse and attempts to meet the needs of both music listeners and music creators.

File sharing is both a revolution in music distribution and a very positive phenomenon. The volunteer efforts of millions of music fans creates a much greater choice of repertoire for consumers while allowing songs – both new and old, well known and obscure – to be heard.

All that’s needed to fulfill this revolution in distribution is a way for Creators and rights holders to be paid.

This is quite contrary to the Canadian Recording Industry Association’s (CRIA) calls for more draconian copyright measures. The CRIA is self-proclaimed “voice and guardian of the record industry in Canada,” but they are increasingly out of touch with Canadian artists, representing instead the foreign interests of multinational record corporations. Many major Canadian independent record labels have left the CRIA, and now both the CMCC and SAC stand in opposition to its beliefs.

I am proud to be a member of both the CMCC and SAC – thank you for truly representing the voice of Canadian artists and defending the rights of music creators and music listeners!

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