The major record companies in Canada last week asked the country’s Federal Court Of Appeal for permission to intervene in the ongoing legal action against the introduction of a new Canadian streaming levy. The majors, unlike Canada’s indie labels, have sided with the streaming services in opposing the current levy proposals.
Under the new levy system, music and video streaming services would have to pay 5% of their revenues in Canada into various funds that support music and radio talent. That ‘base contribution’ figure was proposed by the Canadian Radio-television And Telecommunications Commission last year as it implemented the country’s Online Streaming Act, which introduced the levy.
However, say the majors - via their trade body Music Canada - that base contribution figure fails to “take into account or recognise any of the investments made by music streaming services in Canada”.
Expanding on what those investments involve, Music Canada’s statement explains that the streaming companies “have established Canadian teams and invested in programmes and initiatives to promote the music of Canadian and Indigenous artists”. And those investments “are essential to helping Canadian and Indigenous artists succeed and build audiences in the highly competitive streaming market”.
By failing to take those investments into account, Music Canada argues, the levy system as currently proposed by the CRTC “risks harming ongoing and direct investments in the Canadian music streaming market” and in “Canadian and Indigenous artists”. Despite the fact “supporting the success” of those artists should “be at the centre of the CRTC’s policies”.
Of course, supporters of the levy would argue that that’s exactly what the CRTC's proposals will achieve. Of the money that comes from the audio streaming services, half will go to various existing organisations that support independent artists and labels, including FACTOR. Those funding schemes are popular within the independent music community, which has welcomed the current proposals.
Which means those levy proposals are basically splitting the music industry between the majors - which are making all the same arguments as the streaming services - and the indies - which have previously been supportive of what the CRTC has proposed.
The streaming services began legal action against the CRTC’s proposals last July, prompting judges to put the levy on hold pending the outcome of those legal proceedings.
Music Canada last week announced it had “filed an application” with the court to “intervene in the ongoing appeal of the CRTC’s base contributions decision”. Its announcement adds that it has “specifically” asked the court to “consider music streaming services’ direct investments in Canada”.
Having lobbied hard on the levy before and after the passing of the Online Streaming Act, the trade body says that it believes it should be formally involved in the current legal proceedings. It adds that it is
“uniquely positioned to share the important role” that the streaming services’ investments “play in Canada’s commercial music industry and the harms artists will face if they are reduced or eliminated”.
Music Canada “will keep up” its lobbying work, it concludes, because “on-the-ground investment in the voices and stories of Canadian and Indigenous artists has never been more important”.