The answers to all of these questions is yes according to a recent study published by Dr George Barker, the Director, Centre of Law and Economics, at ANU College of Law, Australian National University. What’s more, the study was done based on survey evidence conducted by Decima Research on behalf of Industry Canada.

Here is how the abstract summarizes the study:

This report examines data on the effects of Internet peer-to-peer (P2P) file sharing activities on music purchasing which was obtained from a survey commissioned by Industry Canada. The survey was designed to ―inform Industry Canada’s policy development work‖ 2 and ultimately therefore support better policy decisions regarding the copyright law in Canada. In order to support its policy decisions regarding the copyright regime in Canada, Industry Canada commissioned a survey by Decima Research in 2006 which was designed to measure the extent to which peer to peer (P2P) file-sharing activities act as substitutes or complements to music purchases. Given this purpose the Decima survey asked respondents to comment on their behaviour in the absence of P2P file-sharing, as follows:

Considering the songs that you downloaded for free through P2P networks during 2005

a) what % would you have purchased at paid music sites if they were not available through P2P

b) what % would you have purchased as part of a music CD if they were not available through P2P

After analyzing the answers to this question, I report on two key findings:

1. three out of every four respondents said that if P2P were not available they would have purchased some or all of the music which they downloaded; and

2. almost two-thirds of the ―hardcore‖ P2P downloaders (those who indicated in the survey that they only acquired music by P2P) said they would have purchased one-third of the tracks they downloaded if the songs were not available on P2P network. This is estimated to amount to an average additional expense of $168 per person, adding up to hundreds of millions of dollars in extra revenue for the music industry per year from this group alone.3

This analysis of survey data then suggests that P2P downloads have strong negative effects on legitimate music purchases and that P2P downloading acts as a substitute for legitimate music purchases. One might reasonably infer from this analysis that stronger copyright laws would substantially increase music purchases and music industry sales revenues and, by implication, increase artist income, industry employment, economic growth and government tax revenues in Canada. My analysis not only focuses on an important survey question which to date has not been analysed by the researchers hired by Industry Canada, it also contradicts the results of the original analysis of the data commissioned by Industry Canada, first published on Industry Canada’s website in a 2007 report entitled, “Don’t blame the P2P file-sharers: the impact of free music downloads on the purchase of music CDs in Canada”, and then subsequently republished with changes by the authors in the Journal of Evolutionary Economics in 2010.

The Barker study is consistent with the global findings of the IFPI published in the Digital Music Report 2012. The report noted that the new French Hadopi law has see P2P piracy levels decline by 26 per cent with a resulting positive impact on iTunes music sales in France. A study referred to in the report found that iTunes singles sales were 23 per cent higher than they would have been in the absence of the Hadopi law. The report also indicated that site blocking orders made in Belgium and Italy under Article 8(3) of an EU Directive had reduced visits to the foreign sites by 70-80 percent.

For those of you who follow copyright law reform developments on certain blogs and social media sources you might find her speech will resonate with you.

For fun, I have taken extracts of her speech reported in the Toronto Star and have substituted the words “administration of justice” with the words “copyright law”; “the judiciary” with “legislative process”; and “constitutional decision” with “copyright reform process”. Here is how the report of her speech would read:

But she says newspapers, radio and television are “old technology” at a time when anyone with a keyboard can create a blog and call themselves a journalist.

She wondered whether fairness and accuracy might be lost in the world of Facebook, tweets and instant messaging, which she says are part of a profound, cultural shift in how people communicate.

“Some bloggers will be professionals and academics providing thoughtful commentary and knowledge,” she said. “Others will fall short of basic journalistic standards. Will accuracy and fairness be casualties of the social media era?

“What will be the consequences for public understanding of copyright law and confidence in the legislative process? How can a medium such as Twitter inform the public accurately or adequately in 140 characters or less of the real gist of a complex copyright reform process?”

The Chief Justice could not have given her speech at a more opportune time.

If you want to catch up with current events regarding copyright, you might read Fen Hampson’s article Will the medium stop killing the message? in iPolitics and Terence Corcoran’s articles in the Financial Post: The Grey’s copyright wolves, The Internet’s collectivist blarney, and  No oil meets no copyright.

In early December, copyright lawyers from across the country descended on the Supreme Court to participate in a cluster of cases that may redefine the scope of copyright in the digital era.

The first case heard, ESA v. SOCAN, put the question directly to the court of how the bundle of rights set out in s. 3 of the Copyright Act ought to be construed in the case of downloads of files containing musical works.  A download of a video game could neither be seen nor heard during the transmission.  Yet the performance rights collective Society of Composers, Authors and Music Publishers of Canada argued that it was “communicated” to the public even though it also had to be installed on a computer or game console before a single note of music could be heard during game play.

The appellants — Entertainment Software Association and Entertainment Software Association of Canada (associations of publishers and distributors of computer and video games, whom we represented), contended that the real right at issue was the right to reproduce a work in a material form.  The respondent SOCAN suggested that the s. 3(1)(f ) right to “communicate a work to the public by telecommunication” covered any transmission of information to the public.

The court spent much of its time trying to ascertain from the parties whether Parliament could have intended to extend what was originally introduced as a broadcast right for radio and television to a right covering distribution of copies of works for later use.  Chief Justice Beverly McLachlin asked SOCAN whether a CD still wrapped in its packaging was “communicated” to her; Justice Michael Moldaver asked SOCAN: “Why would Parliament want to put a damper on the most effective mode of communication in the history of mankind?”

The second case heard, Rogers Communications v. SOCAN, focused on the different question of whether a download sent to single subscribers, one at a time, could be “to the public.”  The court was actively involved in this portion of the hearing and asked many probing questions to counsel.

The third and fourth cases involved a revisiting of the fair dealing exception discussed at length in CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] S.C.J. No. 12, in which the court held that a custom photocopying made available by the Law Society to authorized legal researchers was for a research purpose and was fair.

In SOCAN v. Bell Canada, SOCAN complained that unauthorized 30-second previews of music downloads were not for the purpose of research and were not a fair dealing. In this appeal, the court lingered on the perceived economic impact of these uses.  On the record, the previews were temporary streams of lower quality versions of songs and the court appeared to consider them as an inducement to purchase full copies of the songs, for which rights holders would be paid.

SOCAN attempted to argue two things: first, that ISPs who make previews available to the public are not engaged in a dealing that is for research purposes.  This point, which was elaborated on by several interveners has two aspects to it. Research is to be given the dictionary meaning accepted in other Commonwealth cases of some diligent and systematic study.  Further, in accordance with all previous cases (including CCH) the ISPs could not claim the exception since they merely facilitated research by users and were themselves not engaged in research. SOCAN also tried to convince the court that the dealing was nor fair.  The court appeared to give SOCAN and the interveners who supported them a very rough time.  Some members of the court asked whether ISPs engaged in research because they facilitated it.  Some also asked whether rights holders and users were both better off with the availability of free previews, thus questioning whether the dealing was fair.

The fourth case, Province of Alberta v. Canadian Copyright Licensing Agency (on which we were counsel for intervening publisher associations) dealt with the question of how fair dealing should apply to the educational setting.  In this case the Copyright Board had found that it was not a fair dealing for a teacher to make multiple copies of a work for a class with instructions to read them.

The appellants suggested that this decision was inconsistent with CCH and pressed repeatedly the contention that, since fair dealing is an “individual right,” fairness must be measured from the perspective of an individual student.  The court asked the appellants a number of questions examining whether this proposition was sound in view of the aggregate number of copies that were made for the category of works.  Justice Moldaver, in particular, wondered whether there could be a fair dealing where there was a “death by a thousand cuts.”

One question raised by the publisher interveners was whether the court would clarify its statement in CCH that the fairness factor of the “effect on the market” is “not the most important factor” in the fairness analysis and that an adverse affect on the market would only suggest unfairness and not make the dealing unfair, as it would be in the U.S. under the fair use doctrine.

The last case heard, Sound v. Motion Picture Theatre Associations of Canada, dealt with the technical but important question of whether the definition of “sound recording” in s. 2 of the Copyright Act excludes remuneration under s. 19 for individual songs forming part of a movie’s soundtrack.  The appellant relied heavily on international treaty law and commentary to argue that it had a right to collect. It also argued that a recording would not lose its status as such, except where the soundtrack comprised the entire movie soundtrack (the aggregate of all the sounds in the movie).  This interpretation was vigorously disputed by counsel for several respondents.

Collectively, these cases raise important questions that will shape copyright law for many years to come.

*The videos of the appeals can be watched here.