SOCAN evaluating change to CBC music tariff, months away from a decision

Copyright collective the Society of Composers, Authors and Music Publishers of Canada (SOCAN) said it is evaluating CBC/Radio-Canada’s new streaming web radio service, CBCMusic.ca, and that the rights holder group is “months away” from deciding whether the broadcaster’s copyright tariff should be changed. “We’re months away from a decision on that, absolutely,” Paul Spurgeon, general counsel and vice-president of legal services at SOCAN, said in an interview. CBC launched its new service last month and has come into SOCAN’s sights because it is “quite the service,” he said. “It’s very good.” In a Feb. 10 release, the broadcaster said its new online radio service features 40 web radio stations, more than 125,000 songs that users can access at any time, hundreds of recorded concerts and live sessions as well as content from all CBC programs including Q and George Stroumboulopoulos Tonight. The broadcaster released a new CBC Music app available for Apple Inc.’s mobile devices. Spurgeon said CBC’s music tariff 22E, established by the Copyright Board in 2008, calculates online usage through a formula that includes page impressions or number of “hits” on a webpage. SOCAN said the rates are established according to the type of service and depend on whether the service is commercial or non-commercial. For CBC Music, page impressions will be a key factor, he said. “They currently pay under the , but that could change,” Spurgeon said. CBC spokesman Chuck Thompson said in an emailed statement that the total tariff amount CBC and Radio-Canada pays to SOCAN annually is $8,785,296. “This amount covers radio, television and the internet,” he said. Chris Boyce, executive director of radio and audio services at CBC, said in an interview that SOCAN's tariff with CBC is “one piece” of the broadcaster's royalty payments, covering performance rights. CBC also pays reproduction rights for the use of music. The broadcaster pays a tariffed royalty to copyright collective Re:Sound and has negotiated rights deals with collectives the Audio-Video Licensing Agency and the Canadian Musical Reproduction Rights Agency, Boyce said. Boyce said there’s nothing the CBC is doing with its new service that isn’t cleared by the existing tariff, which will remain in place until SOCAN files a request with the Copyright Board asking to revisit it. “It’s up to them to decide whether they want to do that or whether the nature of our digital music use has changed enough to do that,” he said. Spurgeon said the tariff rates are established according to a “complicated formula” determined by the Copyright Board, and before SOCAN can make a decision to alter the tariff, the copyright collective must consider the existing tariff and whether or how it applies to all of the CBC’s online services. “This is a new one, so we want to see whether—or how—the tariff should capture the value to the CBC of the new service,” he said. “We just want to ensure that the tariff captures the added use of music.” CBC's new service is part of the evolution of how CBC connects with its audience, Boyce said. CBC Music, he said, delivers music content in a new way. “We’ve seen a shift from being predominantly a broadcast experience to being a broadcast and web experience, to today, which is a broadcast, web and mobile experience,” Boyce said. He said CBC’s intent with the new service is to “change the vault” on how music is delivered. The broadcaster wants to be able to serve its audience “when and how they want to be served,” Boyce said. Changing the broadcaster’s tariff could take a significant amount of time, Spurgeon said, because the payment of royalty fees is determined through an “extensive” public hearing process at the Copyright Board. He said a lengthy public hearing would be a “fair, transparent process” that allows the CBC and SOCAN to argue their cases. Spurgeon said an agreement could also be reached to eliminate the need for a hearing. “That’s possible,” he said. “That’s the other alternative.” Howard Knopf, a copyright lawyer with Macera & Jarzyna LLP in Ottawa, said in an emailed statement that the Copyright Board certified a flat fee tariff in 2011 that covers the CBC’s right to simulcast by Internet streaming. “The Board has noted the lack of evidence that SOCAN has brought to date dealing with simulcasting, but did allow a slight increase in the overall flat rate last year to take internet streaming into account,” Knopf wrote. “So, going forward, SOCAN may want to restructure and reword its tariff to better deal with CBC’s new expanded internet music service and to bring much more evidence to the Copyright Board.” Knopf said CBC may have some challenges. Overall listening to music is down, he said, due to about a 25 per cent decline in audience share for Radio 2 “since CBC began to largely eliminate serious music from that network in 2007.” He wrote that CBC's new mix of music is potentially much more expensive as far as SOCAN may be concerned. “That’s because most classical music that CBC used to play is in the public domain and SOCAN is not entitled to get paid for performances of Bach, Mozart or Mahler. But all the new singer/songwriter and other genres that are driving away CBC’s traditional audience and failing to attract a new audience do require payment to SOCAN,” Knopf wrote. He said statistics indicate that Internet listening is “truly negligible” compared to radio, “such as it is on Radio 2, which is down and won’t come back unless and until CBC restores its traditional serious music format and resumes the recording of important live serious Canadian music events.” Knopf added: “As for Radio One, there’s almost no music on it and CBC should obviously stress that point.” —With files from Simon Doyle dgrenier@thewirereport.ca

SOCAN evaluating change to CBC music tariff, months away from a decision

Broadcast | March 15, 2012

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us