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CPCC Wants Music Levy on Memory Cards

The Canadian Private Copying Collective (CPCC) announced that it wants to extend the Canadian private audio copying levy, which currently applies to CD-R/RW discs, to include electronic memory cards.

According to the statement, the proposed tariff for 2012-2013 leaves the existing levy of $0.29 on each CD-R/RW disc unchanged and adds electronic memory cards at the following rates:

Proposed Electronic Memory Card Levy

Storage Capacity Levy Amount
≤1GB $0.50
>1GB to <8GB $1.00
≥8GB $3.00

Presumably, an “electronic memory card” is a removable flash memory device such as an SD, Compact Flash or Memory Stick, but the CPCC does not formally define the term so it is unclear which media the proposal would capture. For example, what about USB memory sticks, internal and external Solid-State Drives (SSD), and so on? At the time of posting, the CPCC had not responded to our requests for clarification.

For more information visit: www.cpcc.ca


Unedited press release follows:

THE CPCC SEEKS LEVY ON ELECTRONIC MEMORY CARDS

May 16, 2011 – (Toronto) – The Canadian Private Copying Collective (CPCC) has asked the Copyright Board of Canada to set a levy on electronic memory cards in order to compensate artists and other rights holders for the copies of recorded music that are made for private use onto this type of recording medium.

The Copyright Board has published the proposed Private Copying Tariff for 2012 and 2013 on its website http://www.cb-cda.gc.ca/. The proposed tariff for 2012-13 would leave the existing levy of 29 cents on CD-Rs unchanged. The levy rates for electronic memory cards would vary depending upon memory card capacity, with proposed rates ranging from 50 cents to $3. The current tariff expires on December 31, 2011.

“A copy is a copy, regardless of whether it was made on a CD-R or a memory card,” said Annie Morin, Chair of the CPCC. “That copy has value, and a levy on the blank media used to make it ensures that the artists, songwriters and other rights holders receive the compensation to which they are entitled. It’s a matter of fairness.”

The CPCC had requested a private copying levy on electronic memory cards in 2003-04. However, the Copyright Board declined to grant a levy, stating that it was not satisfied by the evidence the CPCC was able to present at that time. CPCC Chair Morin said, “The CPCC believes that the evidence now shows that electronic memory cards are ordinarily used by Canadians to copy music. Consequently, the CPCC has requested that a levy be applied to these cards.”

No other new levies are being sought under the tariff proposal, although the CPCC continues to advocate that the Copyright Act be amended to include the extension of the private copying levy to MP3 players.

The private copying levy is an important source of revenue for music rights holders. In place since 1999, the private copying levy provides remuneration to songwriters, music publishers, recording artists, musicians, and record companies in recognition of the fact that Canadians copy hundreds of millions of tracks of recorded music for their own private use.

Established in 1999, the CPCC is an umbrella organization whose member collectives represent songwriters, composers, music publishers, recording artists, musicians and record companies. The CPCC is the non-profit organization responsible for collecting and distributing private copying levies.

Backgrounder on the Proposed 2012-2013 Private Copying Tariff

Why is the CPCC proposing a levy on electronic memory cards?
In 1997 Canada’s Copyright Act was changed to allow Canadians to copy music for their private use. In return, the private copying levy was created to provide compensation to music rights holders when private copies of their music are made. Canadians pay a small levy on blank audio recording media that the Copyright Board determines to be ordinarily used for private copying. Based on recent research, the CPCC believes that electronic memory cards are now being ordinarily used to copy music.

How does the Copyright Board determine whether a type of medium is ordinarily used to copy music?
In order for the Copyright Board to approve a private copying levy on a type of medium, the Board must agree that the medium qualifies as an “audio recording medium” under the Copyright Act. In the past, the Board has determined that CD-Rs, audio cassettes and MiniDiscs (the latter two now obsolete and no longer subject to the private copying levy) met this test. In those cases, the Canadian Private Copying Collective presented the Copyright Board with evidence that those types of recording media were, in fact, ordinarily used by individuals to copy music. As a result, the Board approved a levy to provide compensation to the creators for copies made of their music. The CPCC will have to prove to the Copyright Board that electronic memory cards meet the test in the Act, in particular by providing data which shows that electronic memory cards are ordinarily used by Canadians to make private copies of recorded music.

How does the CPCC collect evidence that a specific medium is being used to copy music?
For more than a decade, the CPCC has commissioned Circum Network Inc. to conduct a monthly survey of 1000 individual Canadians. The purpose of the Music Monitor Survey is to collect information about the private copying of music in Canada. Specifically, the monthly surveys identify the types of media and devices that Canadians use to make copies of music.

How widespread is the use of electronic memory cards as a medium for copying music?
Data from the Music Monitor Survey indicates that in 2010/2011 18% of Canadians surveyed had copied something onto electronic memory cards and that music represented 16% of the content they copied onto such cards.

But not everyone who buys electronic memory cards buys them to copy music. So how is it fair to charge a levy on everyone who buys them?
The CPCC survey research does not just identify the degree to which music is copied onto electronic memory cards or any other medium. It also identifies the degree to which other types of content are copied. When the Copyright Board determines the levy rate that should be established for a particular medium, it does so taking into account only the degree to which a medium is used to copy music. The levy rate for electronic memory cards will be discounted to the extent that such cards are used for copying photos or any type of content other than music.

This is not new technology or a new medium. Why hasn’t a levy on electronic memory cards been sought before now?
The CPCC sought a private copying levy on electronic memory cards in 2003-04. However, the Copyright Board declined to grant a levy at that time, stating that it was not satisfied by the evidence the CPCC was able to present at that time. More recently, the CPCC sought a levy on memory cards in 2008, but withdrew its application based on the available evidence, which was for 2006-2007. Since that time there has been a tremendous increase both in the use of electronic memory cards and in the volume of music copying onto such cards. In addition, the memory capacity of memory cards has greatly expanded and prices have fallen sharply. The CPCC believes the evidence now shows that electronic memory cards are ordinarily used by Canadians to copy music. Consequently, the CPCC has requested a levy on these cards.

How much would it add to the cost of a memory card? What is the basis for the rate(s)?
The CPCC has proposed a tariff of 50¢ on cards of 1 GB or less, $1 on cards greater than 1 GB but less than 8 GB and $3 on cards of 8 GB and greater. The proposed rates are based on the value of the music that is being copied.

Is this move connected to your ongoing effort to have the private copying levy extended to MP3 players?
Not at all. The CPCC continues to pursue a levy on MP3 players, since Canadians overwhelmingly use these devices to copy music, and artists are entitled to compensation when copies of their music are made. However, in order to have the private copying levy applied to MP3 players, changes are required to the Copyright Act. The Copyright Board has the power to approve a levy on electronic memory cards under the existing legislative framework.

Is the CPCC seeking a levy on any other media or devices?
In addition to proposing a levy on electronic memory cards, the proposed Private Copying Tariff for 2012-13 seeks to maintain the private copying levy on CD-Rs at the existing rate. The CPCC has not proposed a levy on any additional medium other than electronic memory cards. The legislation does not currently permit the CPCC to seek a levy on any device.

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