Canadian Recording Industry Demands 45% Of Revenue; Then Blames 'Pirates' For No Streaming Music Services

from the wow dept

Thu, Sep 23rd 2010 9:24am — Mike Masnick

Ah, the recording industry. We've already discussed how ridiculously complex it is for a music startup to obtain the licenses it needs. Combine that with the ridiculously high rates demanded by the record labels and the fact that they demand licensing for things that shouldn't need additional licenses, and you understand why it's so difficult for music startups to survive, and why the market is so fragmented.

You hear it all the time. Spotify isn't available in the US. Pandora isn't available outside the US. And so on. Name the startup and there are serious restrictions on it. Things in Canada are pretty bad, where they basically don't have any of these music services, and it's because the Canadian recording industry is apparently demanding absolutely, positively insane fees -- such as 45% of gross revenue. Yes, gross revenues. If you know anything about the finances of these kinds of businesses, that's laughable. As Pandora's Tim Westergren notes, Canadian radio stations pay approximately 2.1% of gross revenue to the recording industry.

As I read the article, what struck me about it is that, for all the complaints about how Canada was supposed to be some evil "pirate haven," here was a clear case of how its ridiculous copyright situation was keeping new music services out. If copyright were really so weak in Canada, you wouldn't have this issue at all. And then I got to the end of the article, where the Canadian Recording Industry Association boss, Graham Henderson, made the following guffaw-inducing statement:

The music industry, meanwhile, says its fees are not the problem. It says music-related businesses are reluctant to enter Canada because of the country's reputation as a file-sharing haven where music fans can download songs illicitly without fear of penalty.

"Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?" said Graham Henderson, president of the Canadian Recording Industry Association, which represents major record labels.

"[Canadians] just seem to have no appetite for a legal marketplace."

This comes after 26 paragraphs discussing all the different music services that want to enter the Canadian market, but can't because of the ridiculous rates that the recording industry wants to charge. It always shocks me that folks like Henderson can make such blatantly false statements like this and people don't call him on it. He gets away with it because no one points out that his statements make no sense.

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Filed Under: canada, graham henderson, licensing, rates, streaming
Companies: cria

29 Comments

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Jon Renaut (profile), 23 Sep 2010 @ 9:21am

He's telling the truth
"Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?" said Graham Henderson, president of the Canadian Recording Industry Association, which represents major record labels.

He's not talking about pirates - he's talking about the Canadian recording industry, taking 45% of gross revenue without doing anything to deserve it. The Canadian recording industry is made up of Canadians, right?
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Anonymous Coward, 23 Sep 2010 @ 9:43am

LoL

He just called every Canadian a thief?

I'm so glad I don't buy anything from them.
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Manfriend, 23 Sep 2010 @ 9:50am

It always shocks me that folks like Henderson can make such blatantly false statements like this and people don't call him on it. He gets away with it because no one points out that his statements make no sense.
...ladies and gentlemen of this supposed jury, I have one final thing I want you to consider. Ladies and gentlemen, this is Chewbacca. Chewbacca is a Wookiee from the planet Kashyyyk. But Chewbacca lives on the planet Endor. Now think about it; that does not make sense!
Really? It makes no sense?
The sad thing is this parody is becoming more and more life-like all the time. If things go on the way they have the lawyers might as well be using the Chewbacca defense as a real legal doctrine for all the average person will care. People see unjust laws as obstacles to be overcome, not standards to uphold..
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Anonymous Coward, 23 Sep 2010 @ 9:52am

When is EMI, Universal, BMI and others will file for bankruptcy?

Do we need to wait long?
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Ron, 23 Sep 2010 @ 10:03am

We pay a fee for all recordable media to the recording industry here in Canada. So yes, we download our stuff because we already paid them for it!! Double dipping bastards!
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Zangetsu (profile), 23 Sep 2010 @ 10:04am

Music Industry NOT asking for 45%
Please note that the music industry in Canada is NOT asking for 45% of gross revenue. That just the part of the recording industry dealing with record companies and artists. Songwriters and music publishers (SOCAN) also want money and that amount was not listed. However, given that the record companies want 45% I wouldn't be surprised if SOCAN also wants a similar amount.
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NovaScotian, 23 Sep 2010 @ 10:06am

Canadian Recording Industry
Obviously the industry needs these outrageous fees so they can continue to support the politicians that benefit from their lobbying. That part isn't any different than it is in the USA.
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NAMELESS.ONE, 23 Sep 2010 @ 10:06am

this from same people that
this from same people that haven't paid artists as way back as 1980, and 500 million in levy fees without proof or over site in what they did with that money.....FRAUD embezzlement sound about right?

yea blaming themselves and isn't commercial copyright infringement a 20000$ fine per infringement ......

and people dont overcome unjust laws they ignore them outright.

If they were serious about artists rights which the labels aren't they'd simply make the terms more sane as in 10-15 years and then they could garner more support for an ACTA like treaty.
BUT when the terms out way the majority of a life span of a human why does society continue to grant them this right just cause they re BRIBING politicians.

WHAT should be going on is a list of every politician world wide that has take bribe money form hollywood types and the music industry.

LET THE PURGE BEGIN
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NAMELESS.ONE, 23 Sep 2010 @ 10:09am

WAIT A MINUTE
in his little ramble does he actually refer to any Canadian as being a pirate ( by definition a person who robs and pillages ) , as we have a levy that they get. IF so i would call this a definite class actionable slander and defamation of character on a nation scale, to which everyone in Canada could be party too.
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NAMELESS.ONE, 23 Sep 2010 @ 10:12am

AND more slander and defamation of character
by implying that because i use a levy i want a "illegal service" that would say that i am in and of myself wanting to break laws which again could be interpreted as slenderizing a perfectly legal practice set forth that they originally asked for.

"Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?"

Excuse me ? YOU saying i'm stealing it? Thieving it pirating it? I pay my levy on cdrs. I want an apology on behalf of my nation for this buffoon you Americans pushed on us.
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Anonymous Coward, 23 Sep 2010 @ 10:13am

The industry execs make ridiculous amounts of money from price gouging. The pirates download anything they want for free without penalty.

The guy in the middle trying to be legit and listen to music gets screwed from both ends. Welcome to the 21st century media industry...
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Hephaestus (profile), 23 Sep 2010 @ 10:19am

Re: this from same people that
"WHAT should be going on is a list of every politician world wide that has take bribe money form hollywood types and the music industry."

Start here - http://www.opensecrets.org/
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jc (profile), 23 Sep 2010 @ 10:23am

"Ultimately, it's up to the copyright board to determine what is effectively the fair market value of these rights."

Does he even understand what fair market value means? Fair market values are not determined by a board of people sitting in a closet somewhere.
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Berenerd (profile), 23 Sep 2010 @ 10:23am

If I were canadian....
I would sue this guy for libel. Calling me a thief without any proof.
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Laurel L. Russwurm (profile), 23 Sep 2010 @ 10:27am

Thank you Mr. Masnick
Great article. At this point Canada's biggest problem is misinformation spread by people like this, who clearly are among the few to benefit from the existing travesty of a copyright system.

Canada already has ridiculously strong copyright lawm and more copyright collectives than you can shake a stick at. Our government's attempt at rushing through the Canadian DMCA (aka Bill C-32) to modernize us right into the last century will certainly not help.

Our politicians are dazzled by an abundance of special interest groups like Mr. Henderson's CRIA and the ACCESS Copyright collective, BOTH of whom have begun fake grassroots movements to make it appear as though their agendas have public support.

*sigh*
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PaulT (profile), 23 Sep 2010 @ 10:51am

Typical industry thinking, unfortunately. They put up as many barriers to progress as they can and demand that everybody but themselves shoulder the risk. They set up inevitable failures, and then scream "piracy" when those failures happen, never looking inward at the real problems.

At the end of the day, people just want access to the content they want, in the way they want it. No region locks, no DRM, high quality, reasonably priced (not necessarily free) - it should not be much to ask for.

A shame that after all these years, "pirates" are so often the only ones offering it that way but when they're literally refusing to offer legal alternatives in a workable way, they get to lie in the grave they dug for themselves.
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Manfriend, 23 Sep 2010 @ 11:29am

Re: Music Industry NOT asking for 45%
If Big Content is allowed to make up $#@! about downloaders and lump all bittorrent use with copyright infringement, then we should be allowed to conflate all these extortionists together as well. They're all in the same gang...
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Vincent Clement, 23 Sep 2010 @ 11:38am

Re: He's telling the truth
CRIA represents foreign record labels in Canada.
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chris (profile), 23 Sep 2010 @ 11:56am

Re:
When is EMI, Universal, BMI and others will file for bankruptcy?

Do we need to wait long?

yes. blockbuster has been dead for at least 5 years and the corpse just stopped kicking.

talk all the trash you want to about them, record labels are sitting on a lot of money and it will take a really long time for them to bleed out.
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fuck, 23 Sep 2010 @ 11:56am

cant believe this guy
Hey CRIA, now that you've labeled us pirates, should we go about fulfilling that? I'm never buying a CD again. Enjoy your revenue ಠ_ಠ
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Overcast (profile), 23 Sep 2010 @ 12:09pm

A service that only allows 'streaming' is pretty much worthless to me.

80% of the time, if I'm listening to music, it's in the car. I need digital files without restrictive DRM.

Why isn't there a music service where you pay a monthly fee and just download what you want? That's really the only model that would be useful to me. And yes, I'd pay a monthly fee if I could download MP3/FLAC/WMA audio, but it would have to be at least equivalent to 320K bitrate.

Otherwise, ripping CD's is more useful.
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Greg G, 23 Sep 2010 @ 12:58pm

Re: AND more slander and defamation of character
Graham is not an American. The buffoon in question is Canadian.

The only thing American with the name Graham in it is Graham Crackers, which are far more useful because you can make S'mores and Cheesecake crusts.
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Josef, 23 Sep 2010 @ 1:12pm

Re: Good point
This is a good point. I thought the Canadians had some sort of "just in case" tax that is paid to the recording industry.

So every blank CD has an added tax, "just in case" someone copies something they shouldn't. I suppose that tax is moving to flash drives and mp3 players next.

If you are already paying for illegal downloads through a special tax, seems that the logical thought is... "If I'm being taxed for an illegal act that I didn't commit, I might as well commit the illegal act since I'm paying for it anyway."
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TtfnJohn (profile), 23 Sep 2010 @ 8:54pm

Re:
He does it all the time. We are all pirates, you know, in his view because CD's up here are stupidly overpriced and on and on and on, and we don't actually buy them anymore.

Anyway, the CIRA is the Canadian puppet of the RIAA so we take him about as seriously as we take them.

Still 45% of gross???

Worked out by the imaginative accounting processes of the RIAA and MPAA no doubt.
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TtfnJohn (profile), 23 Sep 2010 @ 8:57pm

Re: Music Industry NOT asking for 45%
SOCAN probably wants 110% up front. I'm sure I heard Lorenna McKennitt mentioning that the other day. Just to protect the artist, of course, from we thieving Canadians.
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KidfromOnT, 23 Sep 2010 @ 9:17pm

Flattr?
I think canadian music groups should just put up Flattr links and people who support them can "give" accordingly.

I can think of atleast 4 local bands Id give some cash to.

Stop bitching about lost revenue and SIGN UP.
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Anonymous Coward, 24 Sep 2010 @ 1:04am

This is a standard MO for the recording industry in several countries. When consumers get fed up and stop buying their product, they blame pirates. When consumers begin taking their entertainment from other, newer sources, they blame pirates. When consumers get tired of the of overplayed homogenous playlists on their radio stations and stop listening, they blame pirates. When new companies and services fold because they can't handle the legal extortion that recording industries get put into law, they blame pirates. When they launch shoddy services that deliver poor value and unappealing service, and those services go under, they blame pirates.

I don't expect anything to change. They'll continue to blame pirates as they relentlessly drive their own market to extinction. It's always been the party line.
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Marcel de Jong (profile), 24 Sep 2010 @ 6:02am

Re: Re: Good point
we have a similar levy on our blank media, in The Netherlands.
But it's not to fund the illegal downloads, but to offset the "costs" of copying your discs, which they then try to make impossible with DRM crap.
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Marcel de Jong (profile), 24 Sep 2010 @ 6:58am

Re: Re: Music Industry NOT asking for 45%
We should remain above it.

Don't lower yourself to the idiots' level, they'll beat you with experience.
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