By Nick Krewen
When the Copyright Board of Canada finally approved the first broadcast mechanical tariff for music publishers as proposed by the Canadian Musical Reproduction Rights Agency (CMRRA) in 2001, Lisa Freeman was among those who had been in the trenches working to support this goal.
Freeman worked for Paul Audley & Associates Ltd., a Toronto-based research and consulting firm specializing in cultural industries. Audley’s firm was retained by CMRRA and the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) for its valuation expertise, and Freeman was tasked to help establish the value of reproductions of musical works to a broadcaster’s bottom line.
At the time, hundreds of Canadian commercial radio stations opposed the proposed tariff, through the Canadian Association of Broadcasters, countering that any copies of musical works they made did not have additional value.
“Broadcasters were already paying for the broadcast communication rights,” Freeman recalled. “The argument was that the only payment due to any rights holders would be for the broadcast, because all these ‘technical’ copies were only in service of creating the broadcast.
“Paul Audley’s job was to make the case for what the actual economic value to the broadcasters was, from the ability to make and use these reproductions.”
Freeman said they engaged an economist, a marketing expert, a technical expert, gathered evidence from the broadcasters themselves, and crunched numbers.
“We looked at the mix between talk and music in commercial radio stations’ programming choices and were able to demonstrate the greater value and the greater importance of music to attracting and retaining both listeners and advertisers, the bottom line of the broadcaster,” she explained.
Freeman credits the success of the evidence presented at the tariff hearing as pivotal in prompting the Copyright Board to establish for the first time the obligation for commercial radio broadcasters to pay music publishers royalties for their reproductions of copyrighted works. Over $150 million in royalties have been collected and paid to rights holders as a result.
“We had to establish – and this is where CMRRA has always shown such leadership over the years in insisting and educating everyone from music publishers themselves to the Copyright Board, to the government – that the reproduction right is a separate right with its own value, and it’s an exclusive right,” noted Freeman.
“No one should ever be making copies of musical works without authorization. It’s as simple as that. If a copy didn’t have value, nobody would make it.”
Since that tariff, Freeman has continued to collaborate with CMRRA for decades and currently serves as Executive Director for the Canadian Private Copying Collective (CPCC), of which CMRRA is a founding member.
An additional amendment to the Copyright Act in 1997 enabled CMRRA to introduce compensation for authors, composers, performers and makers whose eligible musical works, performances and sound recordings were being copied by individual Canadians for private use.
Established in 1999, the mandate of the CPCC is to collect and distribute private copying levies (royalties) to songwriters, music publishers, performers and producers of sound recordings. For more information on CPCC and its members, see here.
While they were successful in securing a private copying levy on blank audio recording media in 1999, the media formats covered by the levy were necessarily relevant to that era, some 25 years ago: analog audio cassette tapes, CD-R Audio, CD-RW Audio, MiniDisc and CD-R/CD-RW. Since a 2005 Federal Court of Appeal ruling that interpreted the language of the private copying regime very narrowly, private copying levies have been unable to keep up with changing technologies.
Peak annual levy amounts of $38 million collected in 2004 cratered to less than $500,000 by 2023, as the once-popular blank CDs that stored Canadians’ playlists ended up being replaced by MP3 players, and then by smartphones and tablets in terms of consumer popularity.
“When the iPod came out, we went to the Copyright Board and said that these players are audio recording media being used to make private copies,” Freeman recalled. “The Copyright Board agreed and set a levy on MP3 players.
“But the tech companies who manufactured and imported those digital audio recorders went to the Federal Court of Appeal and argued that MP3 players were devices, and did not fit the definition of media in the Act. Unfortunately, the Federal Court of Appeal agreed, although they also agreed that it made perfect sense to have levies on MP3 players because they would create unprecedented harm for rights holders in terms of lost income.
“For 20 years since that ruling, we’ve been fighting to make private copying technologically neutral.”
It’s been a long process, requiring patient determination.
“The CPCC and its members have been advocating to fix the wording in the Copyright Act to simply add the words ‘and devices’ so that both audio recording media and devices qualify for private copying levies,” said Freeman.
“There have now been billions of unlicensed private copies made on devices and not a penny has flowed to the publishers or the other rights holders affected by that private copying. Our latest research at the CPCC shows that there are 2.2 billion unlicensed private copies on smartphones and tablets in Canada.” Freeman noted that similar private copying levy systems are also in place across much of Europe—including France, Germany, Italy, the Netherlands, and Switzerland— where levies on both media and devices flow to rights holders for private copying. If Canada implemented a $3.00 levy—the European average—on the purchase of phones and tablets alone, it’s estimated that $42 million would be generated annually and distributed to rights-holders.
The need is especially critical as streaming has shifted the consumer mindset concerning commercial music to one of rental over ownership, impacting creators who relied on substantial royalties to make a living via their craft. New sources of revenue to compensate creators and music companies are urgently needed and both the CPCC and CMRRA continue to advocate to add devices to the legislation wording involving private copying.
“This has been the focus of our work since I came into this role in 2017, “Freeman admitted.
Modernizing the private copying regime has been a key priority for the CPCC. When the government’s most recent copyright reform process was launched in 2017, the CPCC—including CMRRA as a member—began actively advocating for updates that reflect how Canadians use technology today. That work has remained central to our efforts as we continue to push for a fair and forward-looking solution.
“When there are royalties flowing, distribution is obviously hugely important. CMRRA has always been extremely involved in the design of good distribution methodology at CPCC. That will be the case again, once we succeed in getting levies on devices. This is something that CMRRA has also done a terrific job of historically: making sure that once you’ve secured the rights, that you’re able to collect on them and distribute royalties accurately.”
Freeman also praised CMRRA’s leadership in digital rights licensing, including its CSI joint venture with SODRAC, which secured Copyright Board certification of an online streaming and download tariff that delivered a 9.9% royalty rate for the reproduction right and a 17.5% all-in rate for 2008-2010: some of the highest royalty rates in the world for the medium.
CMRRA has also been at the forefront of negotiating licensing agreements with major digital service providers such as Apple, Spotify, Amazon, YouTube, Facebook, TikTok, as well as radio stations, and record labels, ensuring effective royalty collection and distribution.
According to Freeman, CMRRA’s impressive capabilities translate into extensive market expertise and insights that enable them to deliver relevant, targeted evidence to evoke change at the government level.
“I was involved with CMRRA through the first online music services proceeding,” Freeman stated. “And what CMRRA did so well, and that enabled royalties to flow, was a combination of educating their own right holders as well as government and the Copyright Board about how musical works are actually being used.
“You need that information, that evidence; it’s an essential part of a whole education process in front of the Copyright Board. There’s a need to have those facts on the table. CMRRA has, from the beginning, stressed the importance of evidence.”
She adds that CMRRA has been an indispensable CPCC ally that has always been at the technological forefront of the music industry.
“I’ve seen CMRRA evolve from building in-house tools in the early days of processing commercial radio and private copying distributions, to a sophisticated system managing the humongous volume of data that they receive from the streaming services. It’s been impressive that every step of the way CMRRA has anticipated and invested in those systems, so that they can afford to administer these rights and that they can accurately collect and distribute for the use of the rights.”
As copyright is a bundle of rights, Freeman says each right is a necessity and should benefit copyright holders.
“At CPCC, we’ve been saying forever that those are all separate streams of royalties, each of which is essential. As a rights holder, you’re going to cobble together a living. Whether you’re a songwriter or a publisher, you need each of those streams of revenue. You can’t say that because you have one stream of revenue, you shouldn’t have or don’t need another. That’s how it works. You earn a living, you build a business by collecting royalties from every stream possible.
“Every use has value and should be paid for.”
