Directors Guild of Canada (DGC)

Consultation on a modern copyright framework for online intermediaries

Submission by the Directors Guild of  Canada

May 31, 2021

The Canadian copyright legislation should recognize the right of Canadian film and television directors for a fair remuneration

The Directors Guild of Canada (DGC) welcomes the opportunity to submit comments in the Canadian Heritage consultation to modernize the Canadian copyright framework with regards to internet intermediaries. The DGC is particularly interested in furthering the status of Canadian film and television directors whose works are increasingly exploited online.

The rapid growth and domination of web giants across the world has not spared Canada, where broadcast and copyright legislation lags behind and is not suited to the new reality. This state of play prompts the need to modernize the Canadian copyright framework and  in doing so ensure that creators and authors benefit from fair remuneration on existing and future internet platforms.

The omnipotence of web giants and the continuous consolidation in the Canadian media sector are slowly but inevitably replacing an audiovisual domestic marketplace that was traditionally comprised of national broadcasters, movie theatres and the distribution and sale of physical copies of works, such as DVDs and CDs. Going forward, the bulk of the revenue will soon originate from the exploitation of copyrighted audiovisual exploited on streaming platforms.

As described in the Heritage consultation paper, the rules, legal liabilities and obligations for internet intermediaries have not been defined yet. A recent call for new productions by Netflix^{Footnote 1} in Quebec illustrates the issue for Canadian directors: the streaming giants require world rights as an eligibility pre-condition, ending the possibility of all future exploitation revenues for directors.

An audiovisual work is the product of the collaboration and creative input of one or a number of individuals. Based on the originality of their work, some of these individuals are recognized under national legislations as being authors, with intellectual property rights in either the completed work or their contribution to it (such as a script or a song). The current version of the Canadian Copyright Act already recognizes the director as the author, or one of the co-authors of an audiovisual work.

The DGC, alongside the labour organization representing directors’ working in the French language in Quebec (ARRQ) and the Writers Guild of Canada, has advocated^{Footnote 2} for a small amendment in the Copyright Act to clarify the existing presumption that the director and screenwriter are the first co-authors and copyright owners of an audiovisual work. The current version of the Act and existing legal rulings are already in support of this definition, which makes this change a natural extension. With the targeted modification of a specific article^{Footnote 3}, we would like to dispel ambiguity regarding authorship and protect the rights of Canadian directors for all future use on any platform.

The Canadian Copyright framework for audiovisual works is well-functioning. Today, DGC director members are remunerated through collective agreements, such as the agreement entered between the DGC and the Canadian Media Producers Association (CMPA). The DGC/CMPA standard agreement includes two separate payments for directors: a “rights acquisition fees” and a remuneration for contract of service. This separation between the two payments recognizes the assignment of several rights (exploitation and moral rights) between the director-author and the producer.

In addition, the director will receive royalties from “secondary use payments” representing the net amounts collected and then distributed by collective societies (e.g. SACD, AGICOA) for the exploitation of its work outside of Canada. Consequently, the payment structure in the collective agreements acknowledges the director-author’s status, but also demonstrates that this is how the industry has been operating for decades.

Established in 1998, the Directors Rights Collective of Canada (DRCC) is a non-profit corporation that has the mandate to collect and distribute royalties from foreign  broadcasts in all genres, including documentary, feature films, animation, television series and short films. While the DRCC membership is not limited to DGC member directors, all director members of the DGC are automatically members of the DRCC. Each year millions of dollars in royalties are redistributed to directors for exploitation outside of Canada.

A copyright regime that empowers creators to leverage the value of their creative work

The 1991 Broadcasting Act and Bill C-10, which represents an historic update, are meant to support the creation and promotion of Canadian programming. However, neither the 1991 or 2020 legislations have specific provisions to uphold creators’ rights. Only a modernization of the Copyright Act can fill this policy gap regarding authors.

When presenting the Creative Canada Policy Framework^{Footnote 4} in 2017, the government recognized that “it is critical that Canada’s creators are equipped to take full advantage of the opportunities presented by the digital environment”. This objective was also the starting point of the current Statutory review of the Copyright Act when Ministers Bains and Joly asked in 2017 the President of the Committee responsible for the review of the Copyright Act to “empower creators to leverage the value of their works and investments”^{Footnote 5}.

The economic and cultural value of audiovisual works in Canada has been vastly underestimated. With the ever-increasing financial investments of foreign streamers in Canada, Canadian directors should not compromise and should be rewarded for the fair value of their works exploited on a platform, including digital platforms, commensurate with their success online.

In recent years, the proliferation of streaming platforms has made the need to enforce the objective of fair remuneration for creators more urgent. This is the legal position of  directors to fight for a fair, transparent and harmonised system to remunerate Canadian audiovisual authors for the digital use of their work, as it is currently in effect in some European jurisdictions. Such a system should ensure that all authors are fairly remunerated in line with the success of their films and television programs and, at the same time, allow for easy distribution and legal access of works. This can be achieved in different ways, one of them being through the collective management of audiovisual authors’ rights and remuneration.

In Europe, collective rights societies are actively addressing the demands of new distribution platforms seeking the support of legislative protection at European and national levels to ensure that authors continue to benefit financially for the use and access of their works. As a matter of principle, new technologies should benefit users, the cultural industry, the communication networks – and also the authors. Similarly, Canada needs to take the steps to modernize its copyright legislation to adapt to the new realities of the digital economy and recognize the essential place the author occupies in the ecosystem.

Key objectives to ensure an adequate remuneration for the authors of an audiovisual work

In light of this, the DGC would like to propose a list of key objectives for the department of Canadian Heritage to consider when modernizing the Copyright Act:

• Ensure that directors and screenwriters remain at the heart of the digital economy and are fairly remunerated in line with the financial success of their work.
• As in European jurisdictions, the Canadian Copyright legislation should secure an unwaivable right of authors to remuneration for their online rights, based on revenues generated from online distribution and collected from the final distributor/exhibitor. This entitlement should continue to exist even when exclusive rights have been transferred and would secure a financial reward for authors proportional to the actual exploitation of the works.
• Examine options to ensure the administration of rights, including entrusting the rights to collective management societies, or the establishment of a mixed model providing flexibility for the remuneration of directors. This will guarantee that audiovisual authors are paid and establish a direct revenue stream between the market place and audiovisual authors.

The statutory review of the Copyright Act launched in 2017 is now coming to an end. This final consultation on Copyright is an opportunity to examine the role and responsibility of internet intermediaries with regards to the author of an audiovisual work. Canada is a unique place in the world to produce film and television content but our sector’s wealth is also driven by many audiovisual works, which intellectual property and whose authors need to be adequately protected and remunerated.

The federal government has made it a mission to create an updated regulatory framework to integrate the web giants operating in Canada, with a comprehensive plan to support the creation of original Canadian programming, fight online harm and provide data protection   to Canadians. This plan would not be complete without the protection of Canadian    authors, specifically directors and writers, whose works are exploited on internet platforms. Government intervention is necessary as the market is clearly failing to provide acceptable outcomes, and Copyright review is an important step in this process.

Sincerely,

Dave Forget
National Executive Director Directors Guild of Canada