On May 23, 2015, the Copyright Board published in the Canada Gazette the most recent tariff proposals filed by CMRRA-SODRAC Inc. ("CSI") on behalf of the Canadian Musical Reproduction Rights Agency ("CMRRA") and the Society of Reproduction Rights of Authors, Composers and Publishers in Canada ("SODRAC").
Three specific tariffs were proposed by CSI: 1) the CSI Commercial Radio Tariff 2016, 2) the CMRRA-SODRAC Inc. Non-Commercial Radio Tariff, 2016 and 3) the CSI Online Music Services Tariff, 2016. These CSI tariff proposals set out the proposed royalties that CSI seeks to collect from copyright users during the 2016 calendar year for the reproduction of musical works by commercial radio stations, non-commercial radio stations, and online music service providers, respectively.
CMRRA and SODRAC are both collective societies that represent songwriters and music publishers. Acting in concert, these two collective societies are referred to as CSI. They collect royalties on behalf of their members for the reproduction of their respective repertoires.
The Objection Period
Now that CSI's proposed tariffs for the 2016 calendar year have been published in the Canada Gazette, in accordance with section 70.14 of the Copyright Act, any person who wishes to object to them has 60 days in which to file written objections with the Copyright Board. This means that any objections to any of the proposed tariffs must be received by the Board by no later than Wednesday, July 22, 2015.
I. CSI Commercial Radio Tariff 2016
This proposed tariff sets out the proposed royalties to be paid by radio stations to CSI for the reproduction of musical works in connection with the broadcasting or simulcasting of a conventional radio station's over-the-air broadcast signal.
The rates proposed by CSI depend on whether a station is considered a "low-use station" or not. A "low-use station" is one that broadcasts works in SOCAN's repertoire for less than 20% of its total broadcast time, excluding production music such as the music contained in commercials, PSAs, and jingles. Moreover, whether a particular commercial radio station is low-use or not, the rate increases on a sliding scale as a station's gross annual income increases. Finally, for the purposes of calculating gross annual income, all separate stations owned by a single company are considered one station.
The rates proposed by CSI in its commercial radio tariff filing are as follows:
Click here to view the table.
These rates are calculated on the basis of a "reference month", which refers to the second month before the month for which royalties are being paid. By no later than the first day of each month, a station must pay the royalties for that month based on the gross income attributable to the reference month. Late payments are subject to interest charges. CSI proposed an identical tariff last year for commercial radio stations in respect of the 2015 calendar year.
CSI's proposed tariff only covers commercial radio stations, and does not authorize the use of any reproduction of a musical work in association with a product, service, cause or institution.
This tariff proposal also outlines specific requirements related to the retention and production of certain records and other information from which the royalties payable pursuant to the tariff can be readily ascertained. In this regard, CSI has the ability to audit these records on reasonable notice and during normal business hours. In the event such an audit discloses that the royalties due to CSI have been understated by more than 10%, the reasonable costs of the audit shall be paid by the licensee within 30 days of any demand being made by CSI for such payment.
II.CMRRA-SODRAC Inc. Non-Commercial Radio Tariff, 2016
This proposed tariff sets out the proposed royalties to be paid by non-commercial radio stations (other than CBC stations) to CSI for the reproduction of musical works in connection with the broadcasting or simulcasting of the station's over-the-air broadcast signal.
The rates proposed by CSI increase on a sliding scale as a station's gross operating costs rise over the course of a calendar year. The annual rates proposed by CSI in its non-commercial radio tariff filing are as follows:
Click here to view the table.
These royalties are calculated, and paid, on an annual basis. Payments are due on January 31st of the year following the calendar year for which they are paid. In other words, these annual royalties are paid on a retroactive basis by January 31 in each year, but are in respect of the previous calendar year and are calculated on the basis of the operating costs incurred in that year. Late payments are subject to interest charges. CSI proposed an identical tariff last year for non-commercial radio stations in respect of the 2015 calendar year.
CSI's proposed tariff only covers conventional, over-the-air, non-commercial radio stations, and their simulcasting operations. It does not authorize the use of any reproduction of a musical work in association with a product, service, cause or institution. It also does not authorize the transmission of musical works over the Internet, except by simulcasting.
III. CSI Online Music Services Tariff, 2016
This proposed tariff entitles CSI to obtain royalties for the reproduction of the musical works contained in its repertoire in connection with the operations of online music services and their authorized distributors. The rates proposed by CSI depend on the nature of the services provided; there are different rates for interactive webcasts, non-interactive webcasts, on-demand streams, free on-demand streams, permanent downloads, limited downloads, and music cloud services. The proposed rates are as follows:
Click here to view the table.
All of these different rates are calculated on the basis of a service's monthly gross revenues and in relation to the specific services, and combination of services, offered to subscribers. Late payments are subject to interest charges. CSI proposed an identical tariff last year for online music services in respect of the 2015 calendar year.
CSI's proposed tariff allows an online music service, and its authorized distributors, to reproduce musical works for the purpose of transmitting them to end users in Canada via the Internet, to authorize certain individuals to reproduce musical works for the purpose of delivering to the service files that can then be reproduced, and to authorize certain end users in Canada to further reproduce musical works for their own private uses, in connection with the operation of the service. The proposed tariff does not, however, authorize the reproduction of a work in a medley, for the purpose of creating a mashup, for use as a sample, or in association with a product, service, cause or institution.