Major publishers screw Canadian songwriters to fight the public domain

As you probably know, our frosty neighbor to the North is considering a bill that would extend the copyright of sound recordings. The always-excellent Michael Geist has been covering the topic extensively.

It should be noted that the copyright extension was inserted into the general budget with absolutely no public input or debate. (In this, it resembles the language that then-staff-attorney Mitch Glazier snuck into a 1999 U.S. bill, that would steal the copyrights of all musical recording artists. Yes: the Mitch Glazier that is currently Senior Executive Vice President of the RIAA.)

It should also be noted that nobody gave any indication that it was an issue. As Geist explains in his article The Great Canadian Copyright Giveaway:

Term extension for sound recordings and performances was nowhere to be found among the thousands of submissions to the 2010 copyright consultation, it was not discussed in the 2002 Canadian roadmap for copyright reform, and groups like the Canadian Independent Record Production Association and the American Federation of Musicians of the United States and Canada did not raise it in their submissions on copyright reform. The music industry’s form letter did not discuss term extension and it was not an issue that was prominently raised in the 2012 copyright reforms. In fact, just last year the Standing Committee on Canadian Heritage conducted a major review of the music industry in Canada with dozens of witnesses taking the time to appear or submit briefs. The final report and the government’s response never raise the term of protection for sound recordings and performances as a concern.

Geist goes into great detail about how this was almost entirely due to back-room lobbying by Music Canada (the Canadian version of the RIAA).

Unfortunately, for those who keep track of copyright policy, none of the above is either shocking or unusual. What is, however, is the story that major publishers have blocked competitors from pressing public domain sound recordings – and screwed over songwriters to do so.

To see why, you have to understand how copyright terms work in Canada. The copyright in compositions (songs) lasts for fifty years after the death of the songwriter. On the other hand, the copyright in sound recordings lasts for fifty years after the publication date. This is the term that is under consideration to be extended to 70 years.

What this means is that the songwriters still get paid well after the sound recordings enter the public domain. In order to do this, anyone who manufactures copies of the sound recordings can pay a “pay-as-you-press” license to the Canadian Musical Rights Reproduction Agency (CMRRA). These are very similar to the mechanical licenses that are handled by the Harry Fox Agency here in the U.S. But unlike the U.S., those licenses are not compulsory in Canada. You can apply for a license, but a music publisher may deny it for any reason.

And that includes denying licenses to public domain sound recordings. As Geist reports in his article, Lobbying and Licensing: Behind the Recording Industry’s Campaign to Squeeze Out New Competitors:

Multiple studies on copyright term extension for sound recordings have concluded that public domain recordings encourage competition between release companies and drive down the price for consumers. The songwriters are paid either way, but the consumers win with more choice and lower priced music. […]

The licences require payment for every song included on a record, ensuring that the payments add up quickly.

Those licences covered the initial run of records that made their way into Canadian stores and made sure that the artists were paid for the use of their work. Given the initial sales and the royalty rates, the low-cost records generated thousands in royalties for the copyright holders.

Yet once the major record labels became aware that the licences were being used to create competitive products, they ordered CMRRA to stop issuing any licences. CMRRA advised the new competitors that it had no choice but to stop issuing the licence and that the decision stemmed from the fact that the master recordings were in the public domain.

(Emphasis mine.)

The CMRRA, for its part, has denied this… sort of. They call Geist’s story “patently false,” but if you actually read what they say, they’re mostly arguing semantics. From their Response:

CMRRA is a music licensing agency which acts exclusively on behalf of the music publishers it represents. Those music publishers range in size from large multinationals to individual songwriters.

As Mr. Geist is well aware, music publishers generally hold rights to songs, which are distinct from the rights to sound recordings typically held by record companies. CMRRA acts as an agent for its music publisher clients as principals, and takes instructions solely and exclusively from those music publishers concerning the licensing of their songs to record companies and other users of their works. Record companies are licensees of CMRRA. CMRRA does not take, and has never taken, orders from record companies on the licensing of songs belonging to CMRRA’s music publisher clients.

Unfortunately, the CMRRA left out one thing: in many cases, record labels and music publishers are the same company. It matters little that the CMRRA represents Warner Chappell (the music publisher), and not Warner Music Group (the record label); they’re both Warner. And, collectively, the “big three” record labels – the same companies as the “big three” music publishers – control 65% of the global music publishing market.

This is especially true for sound recordings that are entering the public domain in Canada. Because of the vast consolidation of labels that has been happining since the 1970’s onwards, a vanishingly small number of copyrights in 50-year-old recordings are held by anyone who’s not one of the “big three.”

And the CMRRA confirms that Geist’s story is in fact true:

In the case reported by Mr. Geist, a number of music publishers instructed CMRRA to refrain from issuing licences for certain products that had either recently been, or were about to be, released in Canada.

They then go on to play the “artists/songwriters” shell game that we’ve seen before in dishonest arguments:

The suggestion by Mr. Geist that “artists lose a source revenue” when a licence is refused is also misplaced. Where the master recording is in the public domain, the artist – that is, the performer – is not compensated by the sale of that recording any more than the record company who initially produced that recording.

What’s “misplaced” is the notion that Geist was talking about anyone other than songwriters. Geist was clearly saying that songwriters lose a new source of revenue. He was right. And the CMRAA doesn’t deny it – they simply defend it:

As for the copyright owners of the songs embodied in those master recordings – that is, the songwriters and/or music publishers – it is their own choice to refuse to grant such licences and forego any potential associated revenue.

The CMRRA is right that the copyright holders have the legal right to make this choice. Unfortunately, when these licenses are granted, those copyright holders are not the only ones to get paid. I don’t know how it works in Canada, but for American artists, mechanical royalties are split roughly 50/50 between the publishers and the songwriters.

This means that the publishers are unilaterally making the decision to take money out of songwriters’ mouths.

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