YouTube’s bad day at the Senate. #C11

September 22, 2022

Google isn’t having it. They sent YouTube Canada lawyer Jeanette Patell to tell a Senate Committee reviewing Bill C-11 to draw a line in the sand on algorithms.

No CRTC-dictated “corrupting signals”. Period.

No CRTC “picking winners and losers” on YouTube’s hosting platform. Ever.

YouTube’s algorithm is 100% based on user consumption, said Patell, and it must stay that way. When pressed by Senators to explain the manner in which YouTube would be willing to promote Canadian content she responded in an elevated voice, “it’s all in the name, YouTube.”

No doubt Senators found that helpful.

When Senator Donna Dasko finally insisted she sketch out what YouTube will eventually tell the CRTC it is willing to deliver on discoverability, Patell said Google would consider non-algorithmic marketing tools in collaboration with “the industry,” as if appearing in front of Canada’s national broadcasting regulator was too distasteful to contemplate.

And that, was that. Good Parliamentary television but not illuminating.

The illumination came from others appearing before the Senate Committee on Wednesday night.

But first a recap is in order.

I posted last week that the Bill C-11’s discoverability controversy is a more focussed issue than most assumed.

That is, the French-language music associations in Quebec are the main drivers of the issue. Jérôme Payette, Director-General of the Association des Professionnels de l’Edition Musicale (APEM) was also in front of Senators last night to speak about the dramatic drop-off in the consumption and revenues of French language music since streaming platforms surpassed radio as the dominant music platform:

“Since 2016, the revenues paid by SOCAN to Quebec music publishers have fallen by 24%. Revenues from traditional sources such as radio and TV are decreasing, and Canadian music is unable to achieve a significant share of revenues from online businesses, which are nevertheless growing.

“Only 10% of the sums collected in Canada by SOCAN from digital broadcasters are paid to Canadian authors and composers, the rest goes abroad. The decline is dramatic compared to traditional broadcasters, and it is explained by the lack of regulation.

“Online, Quebec music struggles to reach its audience. According to the Observatoire de la culture et des communications du Québec, our market share is only 8% on online music services, while it is 50% for record sales.”

Payette views the Internet-driven changes in the music industry as an existential threat to French language culture. Quebec’s cultural sovereignty is at stake and Google, he said, is playing dirty pool on C-11, funding domestic critics like Digital First Canada and Open Media, and fear-mongering about C-11’s impact on consumer choice.

Here’s how the dispute relates to the Bill itself:

The major music streaming platforms appearing before the Senate —-YouTube, Spotify, and TikTok —-all agree to write big cheques to fund the development of Canadian music talent based on the commercial value of their own curated music services of “full length songs.” They hasten to point out they already contribute to some of this development on a voluntary basis.

YouTube and TikTok represent a special sub-set of funding obligations because Bill C-11’s article 4.2 —-the controversial provision stating that user-generated content (e.g. user-curated playlists and videos) can be commercially regulated in certain circumstances—- means YouTube and TikTok will also be tithed on the commercial value of that business.

It also means that user generated content will be governed by whatever CanCon marketing outcomes (“discoverability”) are required by the CRTC under section 9 of Bill C-11, and it’s not ruled out by the Bill that the CRTC may order platforms to figure out a suitable tweak to their algorithms.

Those same CRTC-mandated discoverability outcomes will apply to the platforms’ own curated music services.

The music services all agree on this second point: they are adamantly opposed to discoverability that might impact their algorithms.

What they haven’t done is say what discoverability they are for.

That was why it was disappointing that, despite the best efforts of several Senators to pin down YouTube’s Patell or TikTok spokesperson Steve de Eyre on this point, none of the Senators asked what they thought of the compromise floated by PIAC spokesperson John Lawford last week: increasing the discoverability of Canadian artists through the use of banner ads and hyperlinks.

I promised illumination however.

The first interesting point was the deference shown by Music Canada’s Patrick Rogers to YouTube and TikTok. Music Canada is the alliance of major music labels, foreign owned but in the business of developing Canadian artists. Rogers told Senators he accepted “at face value” claims by Patell and de Eyre that tampering with their algorithms will backfire and harm Canadian artists.

An even more interesting intervention came from the English Canadian musicians’ association CIMA, represented by former punk rock artist and ex-MP Andrew Cash.

While choosing his words carefully, Cash came down squarely on TikTok and YouTube’s side of the argument. The “demand-side” regulation of distribution won’t work in an Internet environment, he said.

In the past radio CanCon regulations helped to build a strong domestic music industry, he said, but radio no longer drives exposure and commercial success. The way to help Canadian artists now is to contribute financially to their development, a “supply side” strategy endorsed by TikTok’s de Eyre.

As for his French language counterparts, Cash recommended they get their day in the CRTC’s court to make their case for stronger discoverability tools under C-11. To tack on the obvious addendum to that recommendation, that CRTC hearing is also the place and time where YouTube and TikTok get to argue that user generated content and algorithms are best left alone.

By the end of the Senate hearing, it became reasonable to conclude that the crux of the discoverability problem is how Bill C-11 and the CRTC can meet the cultural goals of the French language music industry.

But as I observed at the outset, Google isn’t having it.

They insist that all user generated content or algorithms be permanently walled off from any future regulation by exclusion from the Act and French language music does not get its day in court.

And I am going to predict that Liberal, Bloc and NDP MPs are not having that.