By Porter Anderson, Editor-in-Chief | @Porter_Anderson

Canada’s Access Copyright Cites 20% of Publisher Revenues Lost

What Copyright Clearance Center’s (CCC) Roy Kaufman characterizes as “a strong push by US technology giants to relax copyright laws” can “water down the rights of thousands of Australians who create stories and education material.” And he points to Canada as an example of the kind of damage Australia is courting.

We’re glad to welcome Kaufman, who works as CCC’s Managing Director for New Ventures, to fill us in on how he sees the Canadian copyright situation illuminating what we warns is a potentially serious problem in Australia.

Publishing Perspectives: Roy, let’s start with what you’re seeing in Canada.

Roy Kaufman: In 2012, Canada amended its Copyright Act to add the word “education” to the list of exceptions that allow the use of material without seeking permission from, or paying, the copyright owner.

Until that year, Canadian educational institutions paid royalties to creators and publishers for copying content, either directly, or through a local collecting society called Access Copyright. This is similar to procedures in Australia, where the education systems pay license fees to an organization called Copyright Agency, allowing use of a wide range of education material.  The Copyright Agency then distributes those fees to the owners of copyright: publishers, authors and artists. In that way, it ensures compensating publishers and education authors, and underwriting production of new works.

PP: And with Ottawa making this change in the Canadian regulations — putting “education” on the list of exceptions — what do we know of the results?

RK: The effect of the change on Canada’s publishing industry has been direct.

The Access Copyright collecting society’s Executive Director, Roanie Levy, says that educators believe they can now take what used to be paid for under a collective licence and use that content free—and they’re doing that. With an estimated loss of $50 million a year in royalty payments to content producers — plus an even more insidious but hard-to-quantify disincentive to buying books — an important component of Canadian culture is suffering.

PP: Can you give us an example of what you mean?

RK: Under the new exception, for instance, a teacher or professor teaching a course on Alice Munro, Canada’s pre-eminent short story writer and a Nobel Prize winner,  could conceivably gather all the course materials free of charge.

In fact, John Degan, Executive Director of the Writers Union of Canada puts it this way for us: “Going by the 10-percent interpretation” used by educational institutions, “they could take one story out of each book, copy it free, and turn it into a course pack for ‘Canadian Short Stories 101’. Alice Munro wouldn’t have to be told about it, and neither she nor her publisher would see any money for it.”

In other words, Munro would not only cease to receive royalties for copying, but sales of her books would decline, too. For Munro this would be unfortunate, but the consequences of a similar situation for new Canadian authors would be far worse.

PP: Are there any estimates of what this scenario may have meant, financially, to stakeholders in Canada to date?

RK: Access Copyright’s Levy tells us that a systematic use of content without compensation has cost small- to medium-sized publishers 20 percent of their revenues. That means that their profit margins, which already were very slim, are going away.

What’s more, diversity is also being curtailed: the creation of Canadian books by Canadian authors on the country’s history, politics, literature and more is disappearing, paving the way for international publishing firms to saturate Canada with non-Canadian books.

PP: Do you have a case in point?

RK: In 2014, Oxford University Press Canada (OUPC) stopped publishing in the country’s K through 12 market. OUPC’s president, David Stover, specifically cited the fair dealing exception and the subsequent loss of around $10 million in royalties from schools as a primary reason for the closure. And, for purposes of disclosure, Oxford University Press publishes one of my books.

Smaller publishers are being affected, too. Don LePan, the CEO and founder of Canada’s Broadview Press, wrote a letter three years ago to the universities protesting the legality of their interpretation of the copyright changes, saying, “If universities want to help kill the Canadian publishing industry, this new approach to copyright is the perfect way to do so.”

It’s also the difference between Broadview continuing to publish Canadian-focused anthologies like their Native Poetry in Canada, sales of which have fallen to half since the changes.

This is why John Degan at the Canadian Writers Union says that from the writer’s perspective, it’s a disaster: the end of a once-viable and growing market for Canadian authors.

PP: How is this playing out in Canada in terms of response from the industry?

RK: Access Copyright, the collection agency, has launched an action against Toronto’s York University claiming that the copying of published works in coursepacks and onto course management systems is not a breach of copyright. The York trial is set for May.

And in the past, lawsuits have worked, at least in Australia.  Its corresponding collection agency, the one called the Copyright Agency, first tested its own copyright laws against the University of New South Wales in 1974. That opened a decade of litigation, which eventually led to licensing fees being paid by schools and universities. In the intervening years, more than $1 billion has been paid to Australian publishers and creators, underwriting that country’s robust educational publishing sector.

PP: And what’s the outlook in Australia if a an exception is put into the regulations as it was in Canada?

RK: Should a change similar to Canada’s happen, the Australian Copyright Agency’s CEO Adam Suckling says there will be widespread opposition. Suckling tells us, “Our system delivers enormous value to Australian educators and ensures our educational publishing ecosystem continues to innovate. While we support sensible copyright reforms, we will staunchly defend any erosion of creators’ livelihoods.”

A cost-benefit analysis by PwC Australia [formerly known as PriceWaterhouseCoopers] says there’s no evidence of a reason to support such a change to Australia’s copyright system. PwC’s analysis says the copyright system there underpins $73.4 billion of economic value. The finding of the analysis is that there would be significant cost to change the law with no reason to believe that it would boost economic activity.

“With an estimated loss of $50 million a year in royalty payments to content producers…an important component of Canadian culture is suffering.”Roy Kaufman, Copyright Clearance Center

PP: And what are you hearing from the Canadians at this point?

RK: Here’s a quote from Degan at Canada’s Writers’ Union: “We are headed back to the bad old days of 40 or 50 years ago, when everything you read in Canadian schools was produced in the US or Britain. I don’t think anyone — teachers, parents, students — will ultimately be happy with that.”

PP: It comes down to endangering so much indigenously produced material, doesn’t it?

RK: Canadian author Will Ferguson once said, “With or without the Royals, we are not Americans. Nor are we British. Or French. Or Void. We are something else.”

Canada will continue to be Canada regardless of the ultimate outcome of its copyright deliberations, but to build on Ferguson, it runs the risk of being somewhat more American, British and French, and somewhat less of that “something else.”

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Copyright Clearance Center is a sponsor of Publishing Perspectives’ conference, Rights and Content in the Digital Age, June 13 in New York City. Learn more about the event here.

Learn more about Canadian library systems’ progress in getting more fairness and flexility in ebook prices from major publishers in Carla Douglas’ story this week, Canadian Libraries’ Progress on Ebook Pricing: Penguin Random House Leads the Way.