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"We Don't Have Any Choice"

Wednesday September 5, 2007

Last week, the Vancouver Sun ran a lengthy article on the music industry.  It was a reasonable piece - comments from CRIA, CIRPA, and many artists presented some (though not all) perspectives.  That said, CRIA's Graham Henderson provided comments that merit a response.  According to Henderson:

We want laws that offer choice. Right now we don't have any choice and we want the ability to be able to try our business model in a digital environment and have at least the majority of people respect our wishes, recognizing all along that there are going to be people who take from us.

Leaving aside the fact that much of the copying that Henderson characterizes as "taking from us" is covered by the private copying levy that has now generated nearly $200 million since the CPCC began collecting the levy in 2000, CRIA is effectively saying that the only way the industry can offer digital music online is with DRM supported by anti-circumvention legislation.  Anyone with even the slightest familiarity with digital music in Canada recognizes that this is utter nonsense.

First, the evidence to date suggests that Henderson's own members are moving away from the use of DRM.  EMI is offering DRM-free downloads, Universal will be conducting a similar experiment, and most suspect that Sony and Warner will soon follow.  Meanwhile, the overwhelming majority of the Canadian music industry - the independent labels responsible for 90% of new Canadian music - never bothered with DRM to begin with.

Second, if anti-circumvention legislation really was a pre-requisite for offering new business models, then Canada wouldn't have an online music market.  Of course, that isn't the case either - much like U.S. consumers, Canadians have their choice of sites that sell by song (iTunes, Puretracks, Zunior) and by subscription (Napster). Moreover, we have stores that offer online downloads (MuchMusic) and telcos that offer downloadable music as part of their services (Rogers, Bell, Telus).  In fact, when SpiralFrog, the first industry-sanctioned free music download service launched, they did so first in Canada (that's right - a site that is wholly dependent on DRM which currently offers 700,000 songs in an ad-supported, DRM'd format launched first in a country without anti-circumvention legislation).

Third, not only is Canada home to a wide range of online music services, but the Canadian market is growing faster than either the U.S. or Europe.  According to Neilsen Soundscan, the Canadian digital download market grew by 122 percent in 2006, far faster than either the U.S. (65 percent) or Europe (80 percent).

So that's the reality in Canada - an industry that collects tens of millions of dollars each year to cover private copying, launches a wide range of online music services, and experiences remarkable growth has one lobby group responsible for a fraction of new Canadian music diminishing all those efforts by claiming that we don't have laws that allow it to try out new business models.

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