Value Gap Balloons As Music Revenues Soar
Playback 2018: While music industry revenues are bouncing back, creators are getting the thin end of the wedge, and the so-called Value Gap is widening by as much as $82M a year, according to economist Dr. George Barker.
By Nick Krewen
Record industry revenues are on the rebound, but the Value Gap is getting a whole lot worse.
During a 45-minute panel at Tuesday's annual Music Canada Playback review, Australian economist Dr. George Barker suggested that Canadian creators are losing billions of dollars partially due to what he refers to as a "Swiss Cheese Copyright Act."
"I found that it's a very big gap," Dr. Barker, the Director for the Centre of Law and Economics, Australian National University, stated during a hot topic panel thematically discussing the Canadian Copyright Act Review and what can be done to help creators.
"In Canada when you measure economic growth in terms of GDP, and you ask, 'what happens to the music industry?,' you end up with a $1.6B difference.”
In a panel moderated by TVO's Nam Kiwanuka, that included veteran independent recording artist Loreena McKennitt, songwriter, producer and former Ladies of the Canyon member Maia Davies and Re:Sound president Ian MacKay, Barker threw out additional numbers: $2B (the money lost because the law didn't enforce copyright better in response to the technological revolution,); $20B (the cumulative loss in the past 20 years,) and $82M, the annual amount the Gap is still growing by.
Citing 1998 as the peak of the Canadian recording industry's fortunes, Barker said any recoupment of the lost revenue was highly improbable, if not impossible.
"You’re never going to fill that gap and get back to where you were." he explained. "You’re going to keep going further away from 1998. It’s hard to understand, but you’ve got to think of the response, add inflation in, and what you could have done with this money with your time and other investments."
Barker said that current Canadian recording industry revenues, which he pegged at $500M, could have been four times bigger if the proper copyright safeguards were in place.
As it stands, he says we're sending Canadian creators a horrible message.
"What we’ve done is that we’ve told the creative industry people – we don’t want you," Barker, who has helped produce three reports for Music Canada, said.
"There are creative people who lift or lead the industry, trying to make a living out of it, but the reward from creativity has gone down so low that we’ve lost our future in the industry.”
He says the solution to the problem is fairly simple: creators should be given the power of consent when it comes to determining when, where and how their intellectual property is used.
"The one thing that could change the law would be to require consent of creators of their work to be used," he suggests. "It’s quite a simple principle and it can be enforced and that would form a basis for a market."
He added that part of the problem is Canada's "Swiss Cheese" Copyright Act, which he argues is full of loopholes that prevent creators from gaining any traction..
"In principle, the enforcement of consent is not happening. Secondly, the technology change doesn’t need to cause these problems. We have a legal system that’s not responding and is not responsible quickly enough, and then when it does respond, it’s badly adapted."
He feels that the ISPs should pay their way.
"The $2B should be shunted back to the ISPs that’s missing – the $20B that’s been missing over 20 years – by the legal system in courts for not protecting the property on their sites."
