Canadian Publishers' Council Submission on Digital Strategy

Summary

The Canadian Publishers' Council (CPC) is an English–language book publishing trade association with a membership that employs 2800 Canadians and pays $25 million in royalties to Canada's writers. Its members have invested significantly, and continue to invest, in digital content as well as digital production and distribution technologies. In fact, in all forms of publishing and online services (legal, educational, trade, journals) CPC members have been positively exploiting digital for decades.

CPC is very pleased that the government of Canada is looking to create a coherent digital strategy to address the multiple, and sometimes conflicting, objectives set out in the consultation paper — growth, prosperity, public policy goals (multiculturalism, health services, life–long learning), innovation, creativity and education.

CPC recognizes that a digital strategy in Canada will require compromises but where priorities need to be set it will be critical to deliver programs to encourage commerce. An environment that stimulates commerce will deliver the desired investment, employment, innovation and creativity. These are essential to achieving the overarching goal of global success and recognition for Canada.

A vital creative community is needed and it will thrive here in Canada only if the right to protect works from being copied, re–distributed and altered without permission or compensation is recognized. The legislative and regulatory framework, particularly copyright, that is being developed by the government is of critical importance to the commercial well–being of Canadian content creators whether poets, software developers, film–makers, musicians, artists, novelists or data providers. Additionally, if Canada is to be successful in the global markets and be attractive to international investment the framework must be in line with international norms and comply with the treaties to which Canada is a signatory.

There also needs to be sensitivity to the unique market and business factors that exist in Canada such as its small market size (fragmented by language and culture) and its enormous physical size that challenges the goal of delivering access for all Canadians to the digital infrastructure. These characteristics pose sometimes insurmountable obstacles to commercial ventures and focused government investment is critical.

The Publishers' Council is enthusiastic about partnering with the government on this digital strategy and hopes to actively engage in its development.

Submission

Response: Improving Canada's Digital Advantage

The Canadian Publishers' Council (hereinafter referred to as CPC) is pleased to participate in the consultation process initiated by the Ministers of Industry, Canadian Heritage and Official Languages and Human Resources and Skills Development with their consultation paper on a digital strategy for Canada¹.

The CPC, as Canada's main English–language book publishing trade association, was founded in 1910 and represents the interests of publishing companies that publish books and other media for elementary and secondary schools, colleges and universities, professional and reference markets, the retail and library sectors. Members employ more than 2800 Canadians and collectively account for nearly three–quarters of all domestic sales of English–language books. Each year, members spend more than $50 million with Canadian–based book manufacturers and pay more than $25 million in royalties to Canada's writers.

The Council represents the Canadian publishing community on the international level in the International Publishers Association (IPA) and is a member of the International Federation of Reprographic Rights Organizations (IFFRO). The CPC also maintains liaison with other Canadian professional publishers' associations, with the Association of American Publishers and the U.K. Publishers Association, as well as with Canadian colleagues in all areas of the literary arts, educational, library and retail communities.

As noted above, our members make a significant, and on–going, commitment to and investment in Canadian creative and cultural resources and entertainment for Canadians of all ages, from coast to coast. CPC was active at all the roundtables and on the working group for the CDIS/SDIC digital information strategy (Library and Archives Canada) released in spring, 2008.

CPC is concerned that the digital strategy lacks tangible actions because of the breadth of issues it is seeking to address under a single umbrella.

• Achieve global success and recognition yet address Canada's unique cultural and domestic needs
• Recognize consumer issues such as maximizing consumption opportunities and experimentation with technology yet incent and compensate creators appropriately
• Provide government funding to meet public policy objectives, yet not compete unfairly with commercial activity or impede other sources of funding
• Provide access to digital media equitably across the country
• Develop digital skills in traditional education and in retraining of mature workers
• Provide a regulatory framework that incents investment and risk–taking, yet maximizes consumer access and use

This approach has the advantage of being "comprehensive" and the prospective disadvantage of over–reaching with the risk of not achieving key objectives.

CPC, nonetheless, appreciates the opportunity to comment on several common themes in each of the included strategies included for this consultation.

Definition of digital

It would be very helpful to have clarity on what is meant by digital in each of the strategies.

There are the platforms or infrastructure that facilitate delivery of content in digital form and there is content that has been digitized for distribution or access. There is content that is born digital — digital creations — that may be distributed on the web or in tangible media. There is digital entertainment software and digital interactive media that may be delivered across cable or satellite or in tangible forms.

The strategy should acknowledge whether a program is intended to further digital creation ("born digital"), digital conversion, digital production (may not be online e.g. digital production of books), digital distribution (infrastructure as well as e–commerce) and/or digital information management. There are different challenges and different global opportunities depending on the form and purpose.

Legislation and Regulatory Framework

The mere fact of being digital has a significant impact on what legislative framework is required as digital increases the vulnerability of creative works. If there is a decrease in the predictability of the commercial environment and the rights of the creator through inadequate recognition of the making available right or moral rights, misapprehension of the changing roles of ISPs and intermediaries in the distribution of content and a failure to address the risks of piracy and disproportionate private copying, then Canada's digital strategy as it relates to content will fail.

Copyright and international

CPC has commented frequently on the subject of copyright and the urgency of copyright reform. It has become a truism that creators need to be confident in the digital realm — that they can make their work available and receive reasonable compensation, attribution and guarantee of the integrity of the work (moral rights).

To be attractive as a market and to ensure that foreign investors consider Canada as a prospective opportunity, Canada must be in line with international norms and treaties (Berne, GATT/TRIPS) that have endorsed the three–step test limiting the scope of exceptions to copyright protection to certain special cases that pose no conflict with normal exploitation of the work and are not unreasonably prejudicial to the legitimate interests of the rights holder. A "made–in–Canada" copyright regime that runs counter to this approach will not deliver the global digital success the government is seeking.

For Canada to compete in a global information marketplace we must deliver to our international colleagues a predictable and respectful framework, a regime that recognizes international norms. Canada is moving down the path to ratify the WCT and WPPT as enabled by Bill C–32. The commendable objectives articulated in the Preamble to the Bill include:

• To create a marketplace framework law and cultural policy instrument that through clear, predictable and fair rules will support creativity and innovation in the knowledge economy;
• To address opportunities and challenges that are global in scope for the creation and use of copyright works or other subject–matter;
• To adopt coordinated approaches to copyright protection based on internationally recognized norms including those reflected in the WCT and WPPT.

CPC will be participating actively in the next steps on copyright reform by addressing how successful Bill C–32 is, or is not, in addressing these objectives.

Anti–spam

The Canadian government has moved ahead with its anti–spam strategy to reduce unsolicited or junk e–mail (spam). Bill C–28 has been tabled with the expectation that consumer confidence in electronic commerce will be reinforced, an aim the government deems necessary in order to position Canada as a leader in the digital economy. If this legislation improves the adoption of e–commerce it can only be a positive.

Privacy

Privacy is a major consideration as the new technologies introduce SaaS and cloud computing and digital transactions and e–commerce become the norm. However, privacy protections should not be utilized in ways that preclude rights holders, domestic or international, from identifying consumers who are infringing copyright. The evidentiary requirements for alleged infringements are so onerous that sanctions are potentially ineffective.

Investment (Government funding, venture capital, foreign ownership and tax provisions)

There seem to be two distinct targets in discussing investment. The first target is funding technical solutions to activities that might benefit by "being digital". The examples used in the report that would seem to fall into this category are the tax system and the e–health initiatives. The second target is incenting investment in cultural content to drive global commerce.

CPC members are, of course, primarily interested in the second category. Incenting investment, domestic and foreign, will expand the likelihood of Canada reaching a global market. Direct government funding of cultural initiatives has an important role but this funding has tended to be devoted to activities of particular domestic Canadian interest.

In order to encourage venture capital and corporate investment, the opportunity for return in a larger market than Canada needs to be available. There is, therefore, a strong connection between this element of a strategy and the delivery of a copyright regime that is deemed by the investment community, domestic and international, to be respectful of commercial interests.

Government can encourage business generally to invest in upgrading its technology by providing funding initiatives or tax breaks. However, these need to be part of an ongoing strategy and not sporadic stimulus programs. It is also not clear in the strategy document whether this approach to incentive is focused on the content and technology communities.

New global distribution opportunities as well as new channels for Canadian creators and additional Canadian employment in Canadian cultural industries are the goals whether the ownership or the investment is domestic or international — assuming compliance with the Canadian legislative and regulatory framework.

Telecommunication and Infrastructure

Expanding the infrastructure to facilitate consumer access to digital media is a commendable objective as long as the need to fill the "pipes" with content does not result in an approach to online culture that homogenizes the value of all content and creates an expectation of free consumption — both results being antithetical to a healthy creative community and industry.

Business Models

Government involvement in defining business models should be minimal. The tremendous diversity of digital products, services and market demands need to be addressed in the normal course of commerce. That being said it is expected that there will be regulatory frameworks setting standards for consumer protection and privacy.

Market and Business Factors Unique to Canada

Analysis of the Canadian market comparatively to the EU and to the U.S. illustrate some fundamental differences. The Canadian market is very small relative to many countries. The bilingual nature of the Canadian landscape is a challenge for technological solutions so addressing this administratively is helpful. Canada also has significant aboriginal communities who wish to maximize their access through broad distribution of content.

The report suggests that there is an issue around management depth and talent in Canadian businesses. It is very unclear on what basis these allegations are made and they are damaging to the credibility of the Canadian digital content businesses and to their ability to maintain credible distribution channels.

There is a concern in Canadian business generally about the skill sets available to be leveraged in their transition to digital initiatives. It is disconcerting to hear that enrolments in key programs are on the decline. This does suggest that there will be challenges for industries in the near future. Short term solutions are unlikely — choices being made by Canadian students on their preferred career paths will be difficult to sway. Mature workers are unlikely to fill the urgent need for skilled employees through retraining programs. If international investment is to result in domestic employment these deficiencies will have to be addressed. Language and ethnic requirements exacerbate the complexity of this issue but, of course, CPC recognizes that it must be addressed.

Note:

CPC has not chosen to address all of the matters raised in the consultation in detail but would be pleased to participate in any continuing discussion among the three ministries sponsoring the consultation.

For further information or clarification contact Jacqueline C. Hushion at jhushion@pubcouncil.ca or Catherine A. Campbell at ca.campbell@sympatico.ca.

¹ Improving Canada's Digital Advantage: Strategies for Sustainable Prosperity, Consultation Paper on a Digital Economy Strategy for Canada, 2010.