CNM Update

Wednesday, April 6, 2005 Steep new tariffs proposed for music servicesA new online music tariff proposed by the collective that administers the rights of songwriters and publishers could push the royalty rate on tracks sold over the Internet to as much as 40 cents each, depending on how the Copyright Board of Canada rules on it and another tariff filed last year for the mechanical reproduction rights.Last week, the Society of Composers, Authors and Music Publishers of Canada (SOCAN) filed its re-worked controversial Tariff 22 with the board, seeking 25% of gross revenues for web sites and services that permit users to listen to on-demand music, download it, or both. At the same time, CMRRA/SODRAC Inc. (CSI) filed a tariff for 2006-2009 for interactive webcasting, seeking the greater of 6.5% of the gross revenue attributable to the service; 6.5% of the gross operating costs attributable to the service; or, $250 per month. For non-interactive webcasting, CSI is seeking the greater of 5% of the gross revenue attributable to the service; 5% of the gross operating costs of the service; or, $200 per month. The proposed tariffs don’t apply to services subject to the earlier CSI online music services tariff (CNM, May 14/04), Internet simulcasting by licensed radio stations, or pay audio services and multi-channel subscription radio services.The new proposal for a 25% tariff for the right to communicate musical works via telecommunications, if adopted by the Copyright Board, would see royalties on the music sold by sites such as Moontaxi Media Inc.’s Puretracks.com and Apple Corp.’s iTunes climb on a 99-cent track to as much as 40 cents each if an earlier CSI mechanical reproduction right is adopted. That would be significantly higher than the traditional 8 cents per track royalty on music sold physically, and for which no right to communicate via the Internet or other telecommunications means is involved.The filing by SOCAN comes on the heels of last summer’s Tariff 22 decision by the Supreme Court of Canada that ruled Internet service providers aren’t liable for music communicated online (CNM, July 13/04). With that decision, a protracted battle over ISP liability was finally put to rest, which was the first phase of the Tariff 22 process.Canadian NEW MEDIA will have further details and comment in its next full issue.Mainframe’s ‘ReBoot’ distributed on-demand by CinemaNowMainframe Entertainment’s ReBoot cartoon series will be made available in North American on CinemaNow Inc.’s web site, says a Mainframe news release. “With this agreement, Mainframe is venturing into the realm of video on demand (VOD, an area in which CinemaNow is a market leader,” said Mainframe CEO Rick Mischel in the same release. “ReBoot was cutting-edge when it premiered as the first 3D cartoon series on television, and it continues to be progressive with this forward-looking on-demand venture.”Federal Court of Appeal grants CPCC request for stay of decisionThe Canadian Private Collective (CPCC) says the Federal Court of Appeal has granted it a partial stay of its December 2004 decision that the Copyright Board of Canada doesn’t have jurisdiction to impose a levy on memory in devices such as Apple Corp.’s iPod. The CPCC says, as a result, it will keep approximately $4.1 million in levies collected on the devices since December 2003, when the Copyright Board first decided that devices fell under the blank media levy scheme (CNM, Dec. 19/03). The ultimate decision on what types of memory are or aren’t captured by the private copying regime will be up to the Supreme Court of Canada, which has yet to rule on whether it will hear appeals of the December 2004 lower court ruling. “Retaining the collected monies is the only workable solution. When a decision is issued, the collected levies, including the interest on the amount held by the CPCC, will either be distributed to rights holders or reimbursed to those manufacturers and importers who remitted the levies to the CPCC,” said CPCC chair Claudette Fortier in a news release.ExtendMedia develops broadband and subscription VOD cross-promotion for WWEToronto-based ExtendMedia is developing exclusive broadband content to help promote World Wrestling Entertainment Inc.’s (WWE) subscription video-on-demand (VOD) service via cable operators’ high-speed Internet portals. The company will deploy more than a dozen broadband content applications through 2006, including interactive “game-like” content, and exclusive WWE video, animation, flash and photographic elements. A media release notes that the content is designed to help cable operators cross-promote the subscription VOD service with their high-speed Internet offerings. The two companies have worked together in past, and Extend has provided broadband and ITV applications to the entertainment giant (CNM, Dec. 16/04).Watchfire says trust in bank leads to more online transactionsOttawa-based Watchfire Corp. says a survey it supported shows that the higher a level of trust customers put in their banks, the more likely they are to do complex online business with them. The survey shows that consumers who trust their bank tend to be loyal, with 55% stating they’ve never visited another bank’s web site. But, the study revealed, 57% of consumers with high trust in their primary bank would stop all online services with it in the case of a single privacy breach. Watchfire CEO Peter McKay said in a news release announcing the survey results that, “Mainstream media focus on phishing and identity theft is pushing online privacy and trust to the forefront and customers are more anxious than ever before of how their personal information is being used. Banks need to keep a close eye on the integrity of this critical online channel or face costly customer defections.” The Watchfire study was conducted by the Ponemon Institute online with 2,328 customers of banks including National City, Washington Mutual, U.S. Bank, PNC, Citibank and Wachovia.Software industry says copyright reform headed in right directionThe Canadian Alliance Against Software Theft issued a media release March 24 to praise Ottawa for its proposed revisions to the Copyright Act (CNM, April 1/05). “We’re thrilled with this announcement and we look forward to collaborating with government and industry throughout the process,” said Jacquie Famulak in the release. “The future of Canada’s software industry depends on adapting the copyright law to the realities of a digital, networked world. Thanks to the commendable efforts of the government and the opposition parties, we are now closer to achieving this crucial goal.”Museums preview interactive network bringing Canadians to Japanese ExpoThe Canada Science and Technology Museum and the Canadian Museum of Civilization previewed on April 5 an interactive network that will allow Canadians to experience Expo 2005 in Japan and to visit the Canada Pavilion from home. Canada I-Net links users at stations in the pavilion and in seven participating museums in Canada, and will be in place throughout the Expo at the Canadian Expo web site at: http://www.expo2005canada.gc.ca.

CNM Update

Broadcast | April 6, 2005

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