Canada Urged To Update Copyright Laws

by Mike Godfrey, for LawAndTax-News.com, Washington

08 March 2006

According to a statement released by the International Federation of the Phonographic Industry, the "downward spiral" of music sales in Canada resumed in 2005 as illegal file swapping exacted a high toll on the country's artists and music industry.

New figures released last Thursday came with a warning from the head of the recording industry's international trade body that Canada is being left behind in the fast-growing digital music business that last year topped US$1 billion worldwide.

Net music sales in Canada declined by $23 million, or 4 percent, to $608.7 million in 2005, the Canadian Recording Industry Association (CRIA) reported last week, going on to reveal that the decline resumes an almost decade-long spiral paralleling the rise of music file swapping on the Internet, and follows a brief respite in 2004, when sales briefly stabilized.

"It's astonishing that a sophisticated nation like Canada has dragged its feet for so long while the rest of the world has adapted its copyright laws to the digital age," observed John Kennedy, IFPI chairman and CEO, continuing: "The digital music world is moving on - Canada must move with it, or its whole music culture will suffer."

In contrast with Canada's situation, worldwide music sales via the Internet and mobile phones tripled year-over-year to US$1.1 billion in 2005 and are expected to continue climbing rapidly, according to a recently released report from IFPI. Digital revenues have leapt from zero to 6 percent of record company revenues globally in the last two years - far greater than in Canada, where digital revenue comprises less than 1 percent of total sales.

IFPI's Digital Music Report 2006 shows that Canada is losing out by not updating its copyright laws to protect intellectual property in the digital environment, as have its major trading partners. The report reveals that in the United Kingdom and Germany, which have implemented digital copyright reform, legal buyers using sites like iTunes and MSN now exceed illegal file-swappers.

By contrast, illegitimate downloads outnumber legal sales by hundreds of times in Canada, which is cited by the OECD as having the largest online piracy rate per capita in the world. The IFPI report further finds that half the people who have cut down on file-swapping in Europe, where most countries have enacted digital copyright laws, have done so out of concern for the legal consequences.

"As legal downloading surges ahead in other parts of the world, Canada is marooned on the sidelines," warned CRIA President Graham Henderson, adding that: "The goal of a vibrant digital marketplace in Canada will remain beyond reach until our legal environment encourages people to buy music instead of passively accepting theft on the Web."

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