While the summer was hopefully a time to relax and take some time off, certainly the Canadian Copyright Board and the U.S. Department of Justice (DOJ) have been busy working on activities that affect us as songwriters and publishers in the performing rights organization world.

In Canada, the Copyright Board issued two rulings on Tariff 22.D regarding audio-visual works on the Internet, both of which have very positive impacts for SOCAN.  In the first ruling for 22.D.1, regarding AV webcasts, tariffs were confirmed at 1.7% for 2007-2010 and 1.9% for 2011 to 2013. These percentages are based on both per program and subscription fees, as well as advertising revenues, and are subject to minimum fees.

The Board also agreed with SOCAN’s position that in the case of Netflix free trial subscriptions, royalties are payable. Another big positive in the ruling for SOCAN is that given rates have been confirmed going back to 2007, early estimates suggest that the retroactive royalties these tariffs may generate are as much as $10 million. The Tariff Licensing and Distributions committee of the SOCAN board will be discussing the mechanisms to facilitate these royalty payments in the very near future.

With regard to the second ruling, Tariff 22.D.2 for user-generated content on AV sites, the Copyright Board approved the agreement between SOCAN and YouTube at similar rates as those referred to above, applying to the amounts generated by visits from Canadian IP addresses to YouTube pages with advertising revenues. In all cases, these terms will remain in force on an interim basis, until tariff rates and terms are approved for 2014 and subsequent years. These rulings continue to chart a way forward for SOCAN in the evolving digital world.

In other rulings for Tariff 4.A (Pop Concerts) for the years 2009-2014, the approved tariff allows for greater certainty in the terms and conditions between SOCAN and the users as to the royalties and administration requirements.  As well, Tariff 4.B confirmed the agreement between SOCAN and Orchestras Canada, and includes increases in rates for the years 2013 and 2014.

In the U.S., things are a bit different as ASCAP and BMI have to work within the decades-old consent decrees, set by the DOJ, which are in place to attempt to protect the market from potential anti-trust concerns.

These consent decrees and recent court decisions have been creating problems for publishers and the PROs, with regard to publishers’ abilities to withdraw certain rights and negotiate direct deals, and the rate courts insisting on “all or nothing” relationships between the publishers and the PROs.  The DOJ is looking into amending the consent decrees and both PROs have submitted formal comments, seeking greater flexibility.

These developments will likely have progressed further by the time you read this, but suffice to say that we are witnessing the evolution of the PRO landscape and it likely will be unrecognizable within the next few years. The times, they are a-changing!  Stay tuned.

It’s really all about fairness.

You’d have to be living under a rock not to be hearing the raging debate about royalty rates and the value of music in the rapidly evolving digital and online music world. The bottom line is, “What is fair?” Obviously, there are many important links in the musical value chain, and in a respectful ecosystem all parties need to fairly share in whatever revenue is being generated. Without songs and performers, record labels and music services that distribute and facilitate access to music, our world would be a silent and desolate place.

The importance of music in our evolution and civilization traces back to the dawn of mankind. Simply, there was music long before there was a music business, and there will still be music long after the current methods of its dissemination will be seen as archaic and primitive.

Just as music and the music industry have survived these changes, so shall we, by innovation and reinvention.

The business as we know it has evolved generally in the last hundred years or so, although performing rights and music publishing started as far back as the late 1700s. Throughout the 20th Century, business models took shape and the division of roles between creators, performers, publishers, radio and record companies evolved into the landscape we came to know, for better or worse.  But the horizon looks hazy and unrecognizable, just as it did with every technological shift in our industry, from piano rolls to recordings, from radio days to the internet age.

Just as music and the music industry have survived these changes, so shall we, by innovation and reinvention, building on the strength of systems that seemed to work in the past, and finding new ways that can hopefully treat all rights holders fairly, transparently and respectfully.

Many of these new digital music services, while they have yet to realize significant profits (or any profits at all), still seem to generate millions in shareholder and equity value, as well as for their senior executives, while feeding very little back into the music value chain for creators. Likewise, large internet service providers, through whom music and other intellectual property appears to flow freely – and to the great benefit of their bottom line – also contribute nothing back.

Clearly, the current situation needs to change. At a recent CIAM (The International Council of Creators of Music) Congress in Nashville, a report was released entitled Fair Compensation for Music Creators in the Digital Age, commissioned by Music Creators North America (MCNA) and other international creator alliances with the support of SOCAN. The report, part of the Fair Trade Music initiative, was immediately endorsed by CISAC (International Confederation of Societies of Authors and Composers).  Primary findings state that up to 80 percent of revenues generated by streaming services should be transparently paid to the rights holders, and the report also recommends a 50-50 split between compositions and recordings. The study points to a strong and clear standard, a “True North,” in trying to define fairness.

As the debate continues, perhaps all parties need to grab their compasses.

SOCAN’s Licensing team does the important work of connecting businesses that use music, their customers, and the more than 120,000 SOCAN member songwriters and composers that create the music that their customers and employees love.

Nowhere is this more apparent than in our new, awareness-raising Licensed to Play program for the more than 125,000 organizations across Canada that put music to work to improve their business.

The public-facing campaign began with the introduction of the Licensed to Play graphic, and the distribution of a window sticker to more than 30,000 retail establishments, bars, restaurants, fitness studios, clubs and offices that are current with their 2014 SOCAN licenses.

By displaying the Licensed to Play emblem proudly, businesses affirm that they put music to work ethically and legally, and recognize that music adds value to their business, and to their customers’ experience.

Businesses that are licensed to play are essentially saying loud and proud that, yes, they support fair compensation for music creators and music publishers. The sticker implicitly underscores the partnership and mutual respect between SOCAN’s licensed businesses and SOCAN’s members – and, of course, SOCAN itself.

The Licensed to Play campaign also encourages businesses and their customers to think of music as an instrumental (pardon the pun) aspect of their experience.

According to new research conducted by Leger, The Research Intelligence Group, on behalf of SOCAN, Canadian businesses confirm that music is increasingly important to their success. The data supports the fact that most businesses that use music understand and appreciate the contribution that Canadian songwriters make to the economy.

According to the study:

  • Almost three-quarters of Canadian businesses feel that music is important to the customer experience
  • Almost three-quarters of them rank music above décor when considering customers’ experience, and the numbers are even higher for restaurants, theatres, concert halls and health clubs
  • Half of them said they would never stop playing music
  • Almost seven out of ten of them agree that it’s fair to compensate those who created the music

There’s no greater testimony to the successful efforts of SOCAN’s Licensing team than to witness the widespread recognition among Canadian businesses that music is working for them, that music benefits their customers, and that the people who create it deserve fair compensation.

SOCAN’s Licensed to Play program connects all of the stakeholders in the ecosystem when music is being used in Canadian businesses, and the Leger study confirms that these businesses understand and appreciate these kinds of connections. It’s a collaborative and collective win for businesses, their customers, and our members.

Connecting licensed businesses with accomplished members is exactly what SOCAN consistently strives to accomplish, and Licensed to Play is a prime example of collaborative success.