By Graham Henderson
(Adapted from his Nov. 1, 2016 speech to The Economic Club of Canada)
In 2003, the idea that creators were entering a new Golden Age was widely embraced by artists, the media, policymakers and others worldwide.
Peer-to-peer file sharing had become the default way for people to access music for free, and the iPod had taken mobile digital music into the mainstream. The digital era, it was believed, would usher in a utopia for both musicians and the consumer. Artists would gain access to a larger audience than ever before, and make up for the collapse of their traditional marketplaces through concerts, merchandise sales and other means.
But in reality, artists -- the people who build our nation's cultural foundation and much of the intellectual property we export -- now struggle more than ever to earn a living. The creative middle class has virtually ceased to exist.
Just as youth today are told they must accept a world of precarious employment, the gutting of the creative class has been presented as inevitable. It is time that we question that supposition. After all, we live in a social democracy, in which the people, not corporations and not plutocrats, get to decide how to order their lives.
Let's consider how the creative community got to where it is today.
In music, lots of money is being generated, but a disproportionately small share of it is finding its way to creators.
The 1996 World Intellectual Property Organization "Internet Treaties" are the foundation for most of the rules governing our modern digital environment. When the treaties were adopted, less than one per cent of the world's population was online, and it would be 2.5 years before Napster appeared, eight years before YouTube and over a decade before Spotify.
For the new technological infrastructure to get off the ground, it was argued that creators would have to give up copyright payments that would previously have been required. To achieve this, intermediaries and technology companies were subsequently granted "safe harbours" from liability in copyright laws worldwide. With this arrangement, a social quid pro quo was articulated over and over again: creators would be better off -- this was the promise of a Golden Age.
Economist Olivier Bomsel characterized the new arrangement as a massive system of cross-subsidies paid by creators to digital businesses.
So what has become of the promised Golden Age for artists? One recent study found that, in 2011, the average artist in Canada earned just $7,200 from music-related activities. A 2015 Writers' Union of Canada survey found that more than 80 per cent of writers earn sub-poverty line income from their writing!
They are charter members of a new social class, dubbed the "Precariat" by British economist Guy Standing, arising from technologies that accelerate the growth and concentration of profits while driving wages down and making them ever-more uncertain.
In music, lots of money is being generated, but a disproportionately small share of it is finding its way to creators. This is due in part to the massive popularity of ad-supported online music streaming. Services such as YouTube and SoundCloud have driven huge increases in digital music consumption while delivering far less revenue than paid subscription services like Spotify. Ad-supported services, with over 13 times more users than paid services, delivered less than one-third of total streaming royalties.
Music Canada is among those now calling for reforms to address this "value gap," to restore the creative middle class and to level the playing field for all creators.
Any approach to the problem should be holistic and multijurisdictional. At the local level, many municipalities are looking to maximize the job creation, economic and other opportunities that music generates with Music City strategies. At the provincial level, Ontario and B.C. have created substantial music funds and implemented music-friendly policies.
Think of the essential role played throughout history by artists in the fight for democracy and civil rights.
The federal government, for its part, has made it clear that it wants a new toolkit to confront the challenges facing Canada's creators, that it seeks a new social contract. Here are some thoughts:
- Through legislative reform, end the cross-subsidies paid by creators to digital businesses.
- Promote Canada as the great music tourism destination it is.
- Grow music program funding in line with inflation and changing marketplace realities and earmark some Trade Routes funds for music exports.
- Alleviate the housing affordability situation facing artists, and provide them with skills and entrepreneurial training.
- Modernize the Copyright Board of Canada as a true business development office for both creators and users of content.
- Implement policies to attract foreign direct investment in the domestic music economy.
- Rebuilding respect for the humanities is a nationally important issue. The Heritage Department should therefore convene an expert panel to consider this issue and to establish a permanent National Humanities Council. Also, in keeping with Heritage Minister Mélanie Joly's stated aspiration to go in new and bigger directions, the government should look at funding music education to help make up for growing shortfalls that have put music programs across the country in jeopardy.
Minister Joly has asked, "How can the government use content to promote a strong democracy?" In searching for a response, we must consider that, to the extent that we allow the voices of our creators to be compromised or marginalized, our democracy will suffer a great loss. Think of the essential role played throughout history by artists in the fight for democracy and civil rights.
Young people today, creators and other members of the "Precariat" are objecting to their difficult circumstances, just as people fought against the brutalities of the first Industrial Revolution. In a social democracy, we can shape the world we live in.
So in answer to the minister's question: If you want a stronger democracy that is less vulnerable to special interests, encourage and enable our creators by restoring balance to the world in which they live. The promise made to creators of a Golden Age has been broken. Let's make it up to them.
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