Last week, the Association of Canadian Publishers appeared before the Standing Committee on Industry, Science and Technology as part of the copyright review. The ACP, which commissioned a study last year that pointed to digital trends in publishing in Canada that did not identify copyright as key a concern, has been a prominent voice on the impact of declining revenues from Access Copyright licence. Yet as David Lametti, the Parliamentary Secretary for the Minister of Innovation, Science and Economic Development noted during questioning, data submitted by two ACP members to the committee suggest that the Access Copyright royalties have had little impact on overall publisher revenues.
Lametti asked the ACP the following:
We get submissions from various people as part of the committee, and we have submissions from two small Canadian publishers. Broadview Press claim in their submission to us that their annual revenue is $3.5 million, that the drop in access copyright revenue for them is $30,000. That’s a drop of less than 1%. House of Anansi in their submission to us say their annual revenue is $7 million with a loss of about $15,000 to $17,000 in access copyright money in the education sector. Again, that’s a loss less than 1%, actually a quarter of 1%. That seems to be a very different picture for small Canadian publishers in terms of their loss from access copyright revenues than we’re being told. That’s in their very own submissions to us.
The ACP did not respond to the issue, focusing instead on Broadview Press focusing on the U.S. market (the organization might have also noted that Broadview Press uses much of its submission to oppose an extension in the term of copyright). Yet even the small impact on overall publisher revenues does not tell the whole story. Consider the impact of the small drop in overall revenues attributable to Access Copyright in comparison to the amount of support from public sources for these two publishers. Over the past four years, Broadview Press alone has received $350,000 in support from the OMDC Book Fund plus an additional $20,000 from the OMDC export fund. The annual variances in Ontario public taxpayer support are larger than the Access Copyright decline and the total public support from the province alone is many times larger than the revenues from the one licence. The story is similar for House of Anansi, which has received $450,000 in support from the OMDC Book Fund and $54,000 from the export fund. In fact, House of Anansi has long generated nearly as much from just the export fund as it gets from Access Copyright.
The Ontario government is only part of the public support story for these publishers and dozens like them. The federal government also supports these publishers through the Canada Book Fund. The most recently posted recipient data – from 2014-15 – shows Broadview Press receiving $262,115 in federal taxpayer-funded support and House of Anansi receiving $296,494 in support. In all, these publishers have received millions on taxpayer support, undermining claims that the small drop in Access Copyright-related revenues has created an “unsustainable” situation.
The tiny impact on overall revenues from the decline of the Access Copyright licence is consistent with Statistics Canada data that shows the Canadian publishing market largely unaffected by fair dealing given the other changes taking place in the market. The data released in late March shows that Canadian publisher operating profit margin has increased since the copyright reforms in 2012 as it stood at 9.4% in 2012, 9.6% in 2014, and 10.2% in 2016.
As for the education publishing market, the Statscan data shows sales increasing for educational titles from Canadian publishers: up from $376.6 million in 2014 to $395.1 million in 2016. The data shows similar increases for children’s books from Canadian publishers. Interestingly, there is a parallel decline for educational sales as agents, suggesting that the educational market overall has seen little change other than a shift toward Canadian titles. The success of Canadian authors is mirrored by the Statscan data on nationality of sales with Canadian authors seeing a significant increase in sales in Canada, whereas foreign authors have experienced a slight decline. With respect to new titles published, there is a slight decline among Canadian authors of about 6%, but the rate of decline is far higher – nearly 13% – for foreign authors.
Canadian publishers have tried to convince MPs on the committee that the starting point for review of the Copyright Act should be that fair dealing has harmed their industry. But the real starting point should be their own data and official data from Statscan, which points to an industry that has not experienced significant negative effects from fair dealing. In fact, as Parliamentary Secretary David Lametti rightly noted, the data submitted from Canadian publishers directly to the committee highlights how a single licence from Access Copyright barely moves the dial given overall Canadian publisher revenues.
The post Less Than 1%: Canadian Publisher Data Points to Tiny Impact of Access Copyright Royalty Decline appeared first on Michael Geist.
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