Copyright tariffs in a nutshell
Businesses in Canada that use music require authorization by copyright owners to do so lawfully. In Canada, copyright tariffs are a form of music licence, and many commercial uses of music are licenced through tariffs certified by the Copyright Board of Canada. Copyright collectives represent their rights owner members by proposing tariffs to the Board, advocating for their proposals in proceedings before the Board, and administering the tariffs once the Board certifies them. Businesses that use music in Canada, and associations representing those businesses, often participate in Copyright Board proceedings to argue for fair rates and terms. The Board’s decisions and the tariffs that are certified generally reflect the input from both sides – owners and users.
In the past three months, for example, the Board published decisions on:
- CBC Radio’s fees for its use of music on its over-the-air stations, and for simulcasting those programs online;
- Background music suppliers’ fees payable to performers and record companies, for music supplied to a range of retail, restaurant, and other businesses open to the public; and
- Fitness venues’ fees payable to performers and record companies, for music used to accompany fitness classes and workout sessions.
In each case, potential licensees were directly involved in putting forward their positions on the fees and terms for the licences to be certified.
Proposed tariffs – objections due soon
The Copyright Board of Canada recently published tariffs proposed by copyright collective societies for the years 2022-2024. Businesses and organizations that wish to object to these proposals – and have an opportunity to help shape what their ultimate costs will be – must do so by the end of November. As always, proposals have been filed for a broad range of music uses by businesses that have premises, or that offer services, in Canada. Below are a few examples of proposals that, if adopted, would significantly increase fees for using music.
Streaming services – fees for music streaming
Re: Sound is a copyright collective representing performers and record companies for the performance right in Canada. Re: Sound has submitted to the Board its proposed Tariff 8 for music streaming (specifically, Non-Interactive and Semi-Interactive Music Streaming.
For the years 2022 through 2024, Re: Sound is proposing the monthly rates that are the greater of either:
- 21.75% of gross revenues, including subscriber, advertising and sponsor revenues, or
- $0.00157 for each play of a music file (digital sound recording) in Canada;
- with a minimum annual fee of $500 per playlist or program, to a maximum of $50,000 per year.
The above rates would be in addition to any fees payable by streaming services to SOCAN, the collective society that represents authors, composers and publishers for a similar right.
Retail stores, restaurants and professional offices – background music
SOCAN has submitted to the Board its proposed Tariff 15A for background music. The fee is paid by retail stores, restaurants and other businesses per square foot of their space open to the public.
For the years 2022 through 2024, SOCAN is proposing annual fees that are approximately 24% higher than currently applicable rates, as follows:
- Annual fee of $1.53 per square metre or 14.28 cents per square foot, with a minimum annual fee of $117.75.
The above rates would be in addition to any fees payable by these same stores and restaurants to Re: Sound, the collective society that represents performers and record companies.
SOCAN has submitted to the Board its proposed Tariff 6 for music embedded in movies.
For the years 2022 through 2024, SOCAN wants to move from a per seat / per screen model to a “gross receipts” model with a minimum annual rate that is proposed to double:
- Annual fee of 0.25% of gross receipts from ticket sales, exclusive of any applicable taxes, with a minimum annual fee of $300 per screen
The complete list of tariff proposals submitted to the Board for 2022 through 2024 is available on the Board’s homepage. Objections to the Re: Sound tariff proposals above are due by November 27, and for the SOCAN proposals, by November 30.
If you or your client find yourself in a situation where you need advice on music licensing for Canada, consider reaching out to the Dentons Technology New Media and IP Litigation group, Intellectual Property and Technology group and Media, Entertainment and Sports in Canada group. Our professionals are experienced in facilitating licensing matters, including liability under copyright tariffs, direct licensing, and copyright disputes.