TORONTO – The impending decision by the Copyright Board of Canada regarding a proposed tariff for the use of music in webcasts is unlikely to put at end to arguments between the nation’s broadcasters and those organizations responsible for collecting copyright payments on behalf of Canadian music authors, performers and publishers.
But it sure helped to heat up the discussion during a special panel session about Canada’s music copyright policies at last week’s Canadian Music Week conference held in Toronto.
“Our position is pretty clear that we’ve seen an excessive increase in tariff payments for radio broadcasters,” said Gabriel van Loon, legal counsel for the Canadian Association of Broadcasters (CAB) in Ottawa. “We’ve seen copyright tariffs rise for radio stations across Canada from $24 million in 1995 to approximately $76 million last year. And with another tariff proposed, we’re looking at a potential tariff burden of $200 million for 2008.”
Van Loon’s hypothetical tariff figure is based on a proposed combined rate of roughly 17% of revenues generated via the use of music on traditional radio stations and webcasting sites.
Currently, radio broadcasters pay a little more than 7% of revenues to three collectives – the Society of Composers, Authors and Music Publishers of Canada (SOCAN), the Canadian Musical Reproduction Rights Agency (CMRRA) and the Neighbouring Rights Collective of Canada (NRCC). These organizations ensure that songwriters, composers, lyricists, music publishers, recording artists and producers are compensated fairly for the use of their music in radio broadcasts.
As pointed out by Paul Spurgeon, general counsel and vice-president of legal services at SOCAN in Toronto, the hearing process regarding SOCAN’s proposed Tariff 22 – covering communication of musical works via the Internet – has not been completed and broadcasters will have every opportunity to make their case heard before the Copyright Board reaches its decision.
“To respond to what Gabriel said about broadcasters alleging that the cost of music is excessive – the reason copyright payments are one of the key costs associated with broadcasting is because music is the key programming element in broadcasting,” Spurgeon said. “It’s as simple as that. About 76% of radio programming is music.”
He added that in 2005, the radio industry took in more than $1.3 billion in advertising revenues. “So I think you have to put it in that context. Music is the key ingredient in radio broadcasting and will be the key ingredient in webcasting as well,” Spurgeon said.
Sundeep Chauhan, vice-president and general counsel for NRCC in Toronto, said NRCC has always filed tariffs with the Copyright Board that his organization believes are fair compensation for the exploitation of music performers’ work.
“We often hear from the CAB, rather than the fact that the tariff is excessive, that the tariff should be zero, and obviously we don’t agree with that,” Chauhan said. “If there was no value to the use of music, the broadcasters wouldn’t be using it.”
Van Loon responded by saying CAB does see the value in music. However, radio broadcasters, in particular, engage in a significant amount of promotion of music and music-related products, he argued.
“That sort of promotion, to a great extent, offsets the value that we achieve from playing music on our stations,” van Loon said.
The third collective on the panel, CMRRA, was represented by its president, David Basskin, who said he was stunned that in 2008 there are still arguments about whether or not radio derives value from the use of music.
“I can understand continuing value disputes about royalty rates, but people, it’s 2008. Is it too much for everybody to admit value is being conveyed and consumed, on both sides? Can we move on?” he asked. “I honestly don’t know why there should be this much bad blood over the very fact of getting paid.”
The uncertainty surrounding the Copyright Board’s decision about webcasting royalties is one of CAB’s biggest concerns at the moment, van Loon said. “The uncertainty certainly does bother us, in the sense that moving into the online sphere for Canadian broadcasters has been very difficult, not knowing what they’re going to have to pay for online uses of music.”
Basskin seemed to commiserate. “Trying to predict what’s going to come out of the Copyright Board is difficult. It’s like trying to predict litigation – there’s a certain element of crapshoot about it, unfortunately.”
Van Loon added that, over the next few months, the radio broadcasting proceeding will be reviewing all of Canada’s radio tariffs, current and proposed.
“What we’re hoping for is a single tariff,” van Loon said.
“And you’re hoping it will look like a circle, too,” Basskin quipped, to laughter from the audience.
Basskin had words of advice for any songwriters or recording artists who were attending the panel session – make sure to provide accurate and timely data about all parties who need to be compensated for the use of their songs and recordings in radio broadcasts and webcasts.
“It’s just vital. If you’re writing, if you’re co-writing, it’s a little extra work, but get those percentages done. Make sure the people who need to know that information get it, because the effect of slowdowns in information is worse than they’ve ever been. You really need to be on top of this, so that we can do the job for you,” Basskin said. “It’s the only way the system will work in a world of countless channels and millions of tracks.”
At the end of the session, an audience member who works at 102.1 The Edge in Toronto expressed his frustration about an additional tariff, saying that some radio stations may be pushed to the breaking point and may need to consider not playing music at all.
“You won’t stop playing music because you know that it costs substantially more to hire people to write and talk, than it does to play records,” Basskin responded.
“You’re getting the world’s music at a rate that’s a very small percentage of the money that comes through the door (in the form of advertising revenues). You’re always going to think it’s too much, and we’re always going to think it’s too little. That’s why we have the Copyright Board.”
Linda Stuart is a Toronto based writer and editor and covered Canadian Music Week for Cartt.ca.
