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Tag archive: I Stand For Music (10)

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On World Intellectual Property Day, Get Up, Stand Up. For Music.

This Sunday, April 26th, is World Intellectual Property Day, an annual event to promote discussion of the role of intellectual property (IP) in encouraging innovation and creativity. The date was chosen in recognition of the day the WIPO Convention came into force in 1970, with the goal of increasing the general understanding of IP.

This year’s theme is Get Up, Stand Up, For Music, a welcome ‘call to arms’ in support of artist rights. This is the 15th World IP Day, and the first to specifically highlight music, which is appropriate as music and IP are intrinsically linked. The event provides an opportunity to reflect on how intellectual property affects music, and how we listen to it. We don’t often think about it when listening to our favourite song, but IP plays a critical role in taking that song from the artist’s conception to our speakers at home.

Today, music fans have more options than ever to enjoy their favourite music and to discover new artists. There are now more than 400 licensed music services worldwide, with a model to suit all consumer preferences, from subscription services, to digital downloads, to the physical world of CDs, vinyl, and deluxe box sets. The music industry has embraced the digital revolution, which has provided artists with new avenues to bring their music to the global marketplace. It is intellectual property, and specifically copyright, that allows creators to sell and license their music in this wide array of platforms.

But regardless of the medium, the creator’s rights must be respected and fairly compensated. With so much access to music available today, it can be easy to take for granted the talent and years of practice an artist puts into their craft, as well the efforts and investments of the many people working to nurture and develop their career. It is important to remember that long before a song hits the radio or your earbuds, a team of professionals work to support the artist’s creative development and use their expertise to bring the artist’s talent to market.

Record companies remain the primary investors in artist careers. The IFPI’s Investing in Music report estimates that record companies have invested more than US$20 billion in artists and repertoire (A&R) and marketing over the past five years. In fact, the music industry invests a greater proportion of global revenues in A&R than most other sectors do in research and development (R&D). The music industry’s investment of 28% of revenues in A&R exceeds the R&D investment of industries such as pharmaceutical and biology (14.4%), software and computing (9.9%), or technology hardware and equipment (7.9%) sectors. Again, it is copyright that makes this investment possible. Copyright allows the industry to gain a return on these A&R and marketing costs, and reinvest those resources into the next generation of artists. This is why a secure copyright framework is so critical to the music industry.

While the music industry has made great strides in developing the digital marketplace, piracy remains a major problem for the industry, which stifles sustainable growth. This is where we need to ‘Stand Up for Music’, and support measures that will help tackle the problem. Today’s music piracy takes place in many forms, from unlicensed cyberlockers, BitTorrent fire-sharing, stream-ripping, and unauthorized distribution through mainstream social media networks. The IFPI’s Digital Music Report estimates that 20% of fixed-line internet users worldwide regularly access services offering copyright infringing music. The report also identifies that major brands, such as Microsoft and the Royal Bank of Canada, are fueling the piracy ecosystem with advertising dollars from legitimate businesses. Research quoted in the report found that 596 infringing sites generated US$227 million per year in advertising revenue, none of which goes to the artists, songwriters, and labels whose music attracts users to these sites. Rights holders around the world continue to push for support to tackle this evolving problem from governments and internet intermediaries.

Artists are among the most powerful voices in this fight. We have seen that when artists speak out in support of their rights, they can have a strong impact in the conversation. This was made clear this week, as artists such as Leonard Cohen, Randy Bachman, and Gordon Lightfoot spoke up in support of the federal budget’s proposal to extend the term for copyright of sound recordings in Canada to 70 years from 50 years. Similarly, last summer, artists such as the Barenaked Ladies, Brett Kissel, and Bob Ezrin brought significant attention to the Copyright Board of Canada’s Tariff 8 decision, which set the rate for music streaming services in Canada at less than 10% of rates that the same services pay in the United States and many other countries. The issue united Canada’s music sector, with more than 80 music industry associations and labels, led by Music Canada, CIMA, ADISQ and Canadian Council of Music Industry Associations (CCMIA), joining together to form “I Stand for Music”, a coalition that continues to raise public awareness about the disastrous effects of the Tariff 8 ruling.

To fully realize the potential of music’s ever expanding digital marketplace, we need to encourage a fair licensing environment and a world where copyright is respected and music is fairly valued. With that in mind, I would like to use the occasion of World IP Day to encourage all those who appreciate the value of music in our lives to advocate for artist rights, and Get Up, Stand Up. For Music.

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Tariff 8 Q & A

On May 16, 2014, the Copyright Board of Canada issued its decision setting rates for Re:Sound’s Tariff 8 – Non-Interactive & Semi-Interactive Webcasts, 2009-2012.  Tariff 8 sets the royalty rates that music streaming services must pay to Re:Sound to play sound recordings.  Tariff 8 does not apply to the use of musical compositions, which are subject to separate tariffs administered by Society of Composers, Authors and Music Publishers of Canada (SOCAN) and CMRRA/SODRAC (CSI).

Since the Board’s decision, 78 music industry associations and labels, led by Music Canada, CIMA, ADISQ and Canadian Council of Music Industry Associations (CCMIA), have joined together to form “I Stand for Music”, a coalition that continues to raise public awareness about the disastrous effects of the Tariff 8 ruling.  For those who are interested in exploring the issue further, here are some questions and answers to help you dig deeper.

 

QUESTION How does the Tariff 8 decision “impoverish” artists? Isn’t Tariff 8 just one revenue source for artists? Don’t artists benefit from royalties they receive from a number of copyright collectives?
ANSWER For these types of services (Songza, CBC Music etc.) Tariff 8 income is the only guaranteed source of income for an artist (performer). It is only in cases where the performer is also the composer that additional royalties may come from CMRRA/SODRAC (CSI) or SOCAN.The reality in the market is that sales of CDs and even downloads are declining, while music streaming is on the rise.   That’s why it is so important that artists are fairly compensated for their work in the context of web-based services.

 

QUESTION Isn’t it unfair to assert that artists will make less than 10% of their international counterparts such as in the U.S. because of Tariff 8? Aren’t there many additional fees available to artists in Canada that are not available in the United States?
ANSWER In a comparison of the rates payable for the same rights for the same activities (non-interactive and semi-interactive streaming of sound recordings) the rates certified for Canada are less than 10% of those payable internationally.

 

QUESTION Doesn’t it stand to reason that Tariff 8 would be lower than the U.S. equivalent since the Canadian repertoire during that period was about half as large as the U.S. one?
ANSWER Even were the rates certified by the Canadian Copyright Board doubled they would still be less than 20% of international rates for the same rights. But even more to the point: Re:Sound negotiated commercial deals with digital services doing business in Canada during the period. These agreements indicate precisely the marketplace value of the rights in question in Canada. The negotiated rates were submitted to the Board to demonstrate what the rates are and ought to be in Canada. The Tariff 8 rate represents about 10% of the Canadian marketplace rates.

 

QUESTION Isn’t internet streaming just like radio?   Doesn’t it make sense that the Board certified a rate for music streaming based on the commercial radio rate?In fact, shouldn’t a spin on the radio be considered more economically valuable than a “stream” by one consumer, since a spin may reach hundreds of thousands of listeners simultaneously?
ANSWER Comparing broadcast radio spins to digital service streams is comparing apples to oranges. Setting streaming rates based on the rates payable for over-the-air commercial radio broadcasts ignores the much greater value streaming services derive from recorded music. Streaming services offer a variety of genres and sub-genres of music not available on radio, which can be customized to individual preferences and accessible anywhere at any time through mobile devices. With their ability to substitute for, and cannibalize music sales, streaming services are far more comparable to on-demand streaming and download services than terrestrial radio.

 

QUESTION Isn’t it true that the Board’s decision will pave the way for new online music services to enter the Canadian market and result in more choices for consumers?
ANSWER There are many reasons why digital services may or may not have entered the Canadian market including uncertainty regarding rates. Given the extreme discrepancy between the Tariff 8 rate and international standards, and knowing it applies to a period of time that has already ended and that it may be years before the rate for the current period is known, the Copyright Board decision does not erase the uncertainty that has clouded the Canadian market.

 

QUESTION Doesn’t the Copyright Board’s Tariff 8 decision simply establish that the relative values of the rights of creators and their publishers on the one hand (“authors’ rights”), and of the record companies and performers on the other hand (“neighboring rights”), are generally equal and should be treated as such?
ANSWER The Copyright Board rejected marketplace rates, throwing out years of precedential agreement and North American precedents. They did this because the “authors’ rights”, i.e. SOCAN rates, were so low they conflicted with marketplace rates freely negotiated in Canada (and equivalent to those in the U.S. and around the world) for artists and the music companies that invest in their careers. If the Board were to certify Re:Sound’s suggested rates for Tariff 8 royalties, they would have to raise SOCAN rates by 90%. Since they were not prepared to address the issue of low SOCAN rates, they devalued the rights of record companies and performers to bring everyone down to the lowest common denominator.

 

QUESTION As online streaming services become more established, build their paid subscriber bases and generate more ad revenue from free subscriptions, doesn’t it make sense that compensation to rights holders would increase as the economics metrics for their businesses improve?
ANSWER The Tariff 8 rate places such a low value to a stream in Canada it may very well have an impact on the international standard as music companies in other jurisdictions argue that they should pay 90% less for content. This race to the bottom will only further devalue music. Even as the digital services companies become more economically viable, it does not stand to reason that devaluing the streams will lead to fair compensation for rights holders later. Tariff 8 was an opportunity to certify that music in Canada has the same value as music in the United States and elsewhere around the world. Even royalty rates in the United States – which are 90% higher – are hotly contested as musicians, including songwriters, fight for fairer compensation. With Tariff 8 rates set at 10% of a standard that is already considered to be far too low, it will make it even harder for Canadian musicians to make a living and to thrive internationally while digital music companies continue to grow and flourish.

 

 

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Bob Ezrin: “Please don’t let this be the day the music died”

Esteemed Canadian music producer Bob Ezrin has published the following op-ed on the Copyright Board of Canada’s Tariff 8 decision in this week’s edition of The Hill Times.

REPRINTED WITH PERMISSION FROM THE HILL TIMES, SEPT. 22, 2014

Please don’t let this be the day the music died

By BOB EZRIN
Published: Monday, 09/22/2014 12:00 am EDT

TORONTOIt’s always been a mixed blessing to live next to the economic and cultural behemoth to our south. On one hand, we have access to the world’s largest market, while still enjoying the more liberal and enlightened Canadian life. On the other hand, they can easily overwhelm us with sheer bulk and easy access to our market.

One of Canada’s most valuable resources—and most profitable exports—is our culture. Per capita, we may be the world’s largest exporter of culture and talent. This has been made possible by the wise decisions of our hard-working parents and by forward-thinking government policy to support the arts in schools and in the marketplace and to provide developmental resources to Canada’s creative class.

We’ve grown successive generations of creators who are the equal to any of their global counterparts. And we have a vibrant national cultural industry.

Historically we’ve ensured that our creators are not just “sponsored” as they grow, but able to earn a sustainable livelihood. But now we face a major sea of change in the marketplace that begins with Canadian music and will ultimately swamp Canadian television, film, and even literature.

It is clear that in the future most music will be consumed through digital streaming services, offering low-cost “all you can eat” subscription plans in place of selling “à la carte” songs or albums. This will become true for television and film as well.

Streaming services want rights holders to believe that, with universal penetration, we will earn much more than we used to collect selling our creations. The reality is quite different. Historically, huge global hit songs would generate millions and fund the industry’s investment in tomorrow’s hit-makers—our R&D.  Today, in the streaming model, the return is a fraction of that.

And in Canada, we are beginning to set rates that are dramatically less than that.

Today, a massive hit streamed 100,000,000 times on  “non- or semi-interactive” services in most developed countries earns performers and their record labels between $130,000 and $220,000. Under the tariff set by our Copyright Board earlier this year, 100,000,000 listens in Canada—a near impossibility given our size—would generate a whopping $10,200. That is less than 10 per cent of what is paid in most other major markets—and roughly 10 per cent of what our industry had already negotiated in direct deals with the streaming services here! And the amount paid to Canadian songwriters and publishers is a similar pittance.

I know that the board operates with the best of intentions, but I am afraid in the case of Tariff 8 it has miscalculated what this industry needs, and Canadian music creators will suffer the consequences.

In short, if the Copyright Board’s inadvertent devaluation of our music is widely adopted and spreads to other rights, we’re dead. Our homegrown Canadian music industry cannot survive this. We will shrivel and die. And when we shrink, it will affect all the workers who support us, from graphic artists to marketing people to truck drivers to hotel workers to stagehands and software engineers—because many of us will simply no longer be able to afford to be creators and marketers of music, or to put our shows on the road.

Perhaps the worst result of the low rate is that we will be granting a 90 per cent discount to American streaming companies that covet our market and will eagerly sweep in here with powerful and well-funded systems that will wipe out any Canadian-owned competition—all at the expense of the creators Canada has historically supported with thoughtful policy.

My message to our government and the Copyright Board is simple:  Please pay attention to the marketplace, because that’s where we make our living. And please recognize that if our digital marketplace is to flourish, it will depend on the health and sustainability of our creative industries, which provide the content that fuel the digital marketplace. Please reconsider Tariff 8. And let’s sit down together to find a way to protect this most valuable of Canadian resources—our culture—in the new economy.

Please don’t let this be the day the music died.

Bob Ezrin has produced some of the world’s most important music artists, including Pink Floyd, Alice Cooper, Peter Gabriel, Johnny Reid and Young Artists for Haiti. He was inducted into the Canadian Music Hall of Fame in 2004 and Canada’s Walk of Fame in 2013. In 2013, he was also named an Honorary Fellow of the Royal Conservatory of Music. Bob can be reached at:  bobezrin@nimbusarts.ca.

 

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Music Canada’s 2014 Annual General Meeting

The Lula Lounge in Toronto played host to Music Canada’s 2014 Annual General Meeting on September 10th, with more than 150 representatives from our member labels and industry partners in attendance.

The event began with a State of the Industry conversation between acclaimed record producer Bob Ezrin and Music Canada President Graham Henderson. Much of the discussion focused on the Copyright Board of Canada’s recent decision on Re:Sound’s Tariff 8, which sets appallingly low royalty rates for non-interactive and semi-interactive webcast services. Re:Sound has since filed an application for Judicial Review of the Board’s decision, and a coalition of more than 70 music organizations released a joint statement in support of Re:Sound’s Application for Judicial Review.

EzrinHenderson
Mr. Ezrin spoke passionately of the importance of “one voice” in opposition to the Tariff 8 decision. “We need, somehow, as an industry… as one business… get together quickly and get to Ottawa and fight this tariff…. Because this is truly the beginning of an end.”

I Stand For Music was created as a space for the industry and fans to amplify their voices in opposition to the Tariff 8 decision, and to show their support for recorded music and Canada’s music community.
Following the discussion with Ezrin, Henderson described what’s on the horizon for Music Canada. In addition to the battle over Tariff 8, Henderson revealed plans for Music Canada Live that will soon represent the live music community. “The vision for the association is that is truly national in scope, representing all sizes of live music companies, for profit and not-for-profit, in all corners of the country,” said Henderson. “It’s going to identify common issues, and create a strong, collective voice to ensure the live music community is well represented when decisions are made at all levels of government, and that is unprecedented.”

Henderson also shared that Music Canada is undertaking an economic impact study of Ontario’s live music sector in conjunction with the Ontario Media Development Corporation. “We expect this to be as vital to the debate as our economic impact study of the recording industry has been,” said Henderson.

Henderson also spoke of OntarioLiveMusic.ca, a live music portal developed by Music Canada, under contract with the Ontario government, which profiles Ontario as a destination for music tourism. Music Canada’s work on Toronto as a music city will continue under the 4479 Toronto brand, as well as on the Music City Alliance with Austin, Texas. Henderson also touched on a new partnership with the National Music Centre in Calgary, AB, in the development of a study on leveraging Calgary’s music sector for economic development.

Graham
Next, Music Canada’s Amy Terrill moderated a ‘New Directions’ panel, featuring a conversation with old friends in new positions in the industry, including Melanie Hurley from Canada’s Walk of Fame, Allan Reid from the Canadian Academy of Recorded Arts and Sciences (CARAS), Rick Fenton from Music Ontario, and Zaib Shaikh from the City of Toronto.

Allan Reid spoke of CARAS’ expanded emphasis on artist development, noting that as MusiCounts does great work at the very beginnings of a music career, and the JUNOs celebrate them at the pinnacle of their success, CARAS sees room to expand to help artists in the middle ground.

Rick Fenton told the audience that Music Ontario is developing a market access program, as well as creating a physical and virtual resource centre to help “artists affect change with a common voice,” on issues like Tariff 8 and more.

Melanie Hurley shared that as Canada’s Walk of Fame is preparing for its 5th annual festival later this month, her next priority is to continue to develop partnerships with Toronto and Ontario, and expand the Walk of Fame brand. “Our first initiative is to celebrate, and the second is to inspire future generations,” said Hurley. “And I think that’s where we can really take off, where we can expand and look at doing scholarships and partnerships, and bring in people to talk to the next generation.”

Zaib Shaikh spoke of Toronto’s strength in both economics and culture, and shared information on recent developments at the City of Toronto’s Economic Development & Culture division, which has grown to 30 employees, and will soon add a Music Sector Development officer, whom Shaikh said should be in place by the beginning of October. “I’m looking forward to Toronto being seen as a leader in what we can do with entertainment, and obviously music is a key cornerstone in that,” said Shaikh.
Panel
The meeting closed out with a special performance by Shawn Hook, who performed two new songs from his upcoming album, including the new single ‘Million Ways’.

ShawnHook

For more photos from the event, see the album on our Facebook page.

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Canada’s Copyright Board Tariff 8 Decision Devalues Music as a Profession, Suggests Music is Worth 900% More in the U.S.

On May 16, 2014, the Copyright Board of Canada issued its decision setting rates for Re:Sound’s Tariff 8 – Non-Interactive & Semi-Interactive Webcasts, 2009-2012.

The Tariff 8 decision is a serious insult to Canada’s musicians because it sets the world’s worst royalty rates for non-interactive (e.g. CBC Music) and semi-interactive (i.e. Songza and Pandora) music streaming.

As noted previously, the new rates certified by the Board amount to about 10% of what digital services companies have been paying in Canada and less than 10% of what those same services pay in the United States.

In The Rambler by Graham Henderson: Tariff 8 decision establishes “10% of Nothing Rates”, Music Canada President Graham Henderson poses the rhetorical question:  “Do Canadian plumbers get paid wages equivalent to 10% of American plumbers? Teachers? Auto workers? Farmers? Who? What profession receives compensation in Canada for their labour that is equal to 10% of the wages paid across the border?”

The answer, obviously, is nobody.

In fact, on closer examination, the answer is that in each of those professions, Canadians – on average – happen to earn MORE than their U.S. counterparts.

Plumbers
Median Annual Salary according to payscale.com
Canada = $57,950
U.S. = $48,632

Professors
Median Annual Salary for a “Professor, Postsecondary/Higher Education” according to payscale.com
Canada = $91,550
U.S. = $83,801

Auto Workers
Median Annual Salary of “Assembly Line Worker, Automotive” according to payscale.com
Canada = $50,565
U.S. = $32,150

Farmers
Median Annual Salary according to payscale.com
Canada = $42,000
U.S. = $32,030

Despite the absurdity of a Canadian earning less than 10% of what his or her counterpart south of the border earns for the same job, the Copyright Board of Canada has decided that professional musicians should get paid 90% less for certain types of music streaming.  Some people may argue that Tariff 8 isn’t an artist’s only source of income.  But the reality is that for these types of services (CBC Music, Stingray, Songza, etc.), Tariff 8 royalties are the only guaranteed source of income for a performer.  Artists deserve to be fairly compensated for their music.  The Tariff 8 decision sends a message that music is not valued as a profession here, and this message is completely inconsistent with Canadian values.  The Canadian government – who did not create this problem – should step in and take the necessary steps to fix Tariff 8 so Canada is not offside with royalty rates in the United States and around the world.

Send a copy of I Stand for Music’s Open Letter to Industry Minister James Moore to show your support for Canada’s music community.

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Global News Halifax: Tariff 8 cuts affect East Coast musicians

Earlier this week, East Coast Music Association Executive Director Andy McLean and artist and producer Daniel Ledwell spoke with Global Morning News Halifax about the Copyright Board of Canada’s Tariff 8 decision. The rates set by the Copyright Board are approximately 10% of the rates negotiated by Re:Sound in its direct agreements with digital services, and less than 10% of the comparable U.S. rates.

“We’re trying to get the Copyright Board to re-evaluate the decision that they made in the light of the fact that people are standing here saying, ‘this is ridiculous,'” said McLean. “It sends a really wrong message, it’s the worst possible rate in the world. There’s no other country that devalues it’s musicians like Canada does. And we have the greatest musicians in the world here.”

The full segment is now available on the Global News website, and is embedded below.

A growing coalition of artists, labels, industry associations, and music fans are speaking out against the Copyright Board decision; to learn more and to add your voice, Like and Share the I Stand For Music Facebook Page, or tweet using the hashtag #IStand4Music.

For more information on the Tariff 8 decision, see our Backgrounder.

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Music Canada’s Graham Henderson discusses Tariff 8 on Newstalk1010’s In The Studio

Last month, Music Canada President Graham Henderson joined Bob Reid and Blair Packham on Newstalk1010’s In The Studio to discuss the Copyright Board of Canada’s recent decision on Tariff 8. The rates set by the Copyright Board are approximately 10% of the rates negotiated by Re:Sound in its direct agreements with digital services, and less than 10% of the comparable U.S. rates.

“This is a problem that actually can be fixed by the Government of Canada,” said Henderson. “Because it’s Government of Canada who sets the rules by which something like the Copyright Board decides how rates will or won’t be set. And it would be very helpful, we think, if the Government of Canada could step in, take recognizance of the ludicrousness of this decision, and maybe help us try and fix it.”

The full segment is now available on Soundcloud, and is embedded below:

A growing coalition of artists, labels, industry associations, and music fans are speaking out against the Copyright Board decision; to learn more and to add your voice, Like and Share the I Stand For Music Facebook Page, or tweet using the hashtag #IStand4Music.

For more information on the Tariff 8 decision, see our Backgrounder.

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Backgrounder: The Copyright Board’s Tariff 8 Decision

On May 16, 2014, the Copyright Board of Canada issued its decision setting rates for Re:Sound’s Tariff 8 – Non-Interactive & Semi-Interactive Webcasts, 2009-2012.

What is the Copyright Board?

The Copyright Board of Canada is an economic regulatory body empowered to establish, either mandatorily or at the request of an interested party, the royalties to be paid for the use of copyrighted works, when the administration of such copyright is entrusted to a collective-administration society. The Board also has the right to supervise agreements between users and licensing bodies and issues licences when the copyright owner cannot be located.

What is Re:Sound?

Re:Sound is the collective that collects royalties on behalf of music companies (producers) and performers for certain rights, such as the communication right, by filing tariffs before the Canadian Copyright Board. The Board either accepts tariffs proposed by Re:Sound or modifies them. Re:Sound then distributes royalties collected under tariffs certified by the Board directly to performers and to music companies, who in turn may distribute them to artists under royalty agreements.

What is a “Non-Interactive Webcast”?

A Non-Interactive Webcast is an online music streaming service that does not allow the user to control the content or timing of the webcast e.g. no skipping or customizing the stream by genre or artist. Examples of non-interactive music streaming services include Slacker and CBC Music.

What is a “Semi-Interactive Webcast”?

A Semi-Interactive Webcast is a service that allows the user some level of control over the content or timing of the webcast such as skipping or pausing the stream or customizing the content by genre or artist. An example of a semi-interactive service is Pandora Internet Radio.


The Copyright Board’s decision follows a lengthy rate-setting process that started in 2008. Re:Sound proposed rates based on marketplace agreements negotiated directly between webcasting services operating in Canada and both Re:Sound and music companies. These proposed rates were also consistent with US rates, reflecting the marketplace acceptance of North American rates. Re:Sound spent years negotiating deals with digital service providers at market rates, which it presented in evidence to the Board. The Board rejected those agreements and set royalty rates for webcasting in Canada that do not reflect market rates and are a small fraction of the rates payable by the same services in the U.S.

The webcasting rates certified by the Board are based on the rates payable to music publishers by commercial radio stations for their over-the-air broadcasts, and as a result, are a small fraction (less than 10%) of the rates the same services pay in the United States. In the U.S., the Copyright Royalty Board is legislatively required to set webcasting rates based on market rates. In Canada, the Copyright Board sets rates that it considers to be fair as opposed to market rates.

The Re:Sound tariff in this case was for webcasting music, including non-interactive webcasting services and semi-interactive services, but not on-demand services such as Rdio (which are licensed directly by music companies).

Tariff 8 does not apply to podcasts, fully interactive services such as downloads or on-demand streaming, or simulcasts by Canadian commercial radio broadcasters, CBC, pay audio or satellite radio services. Other simulcasters, such as international radio stations streaming into Canada, are subject to the applicable webcasting royalties under Tariff 8.

Key Points

The rates set by the Copyright Board are approximately 10% of the rates negotiated by Re:Sound in its direct agreements with digital services, and less than 10% of the comparable U.S. rates.

The Board rejected Re:Sound’s market rate-based benchmarks and held that marketplace-negotiated rates and North American rates are irrelevant in Canada.

The Board instead set the rates based on the music publishers’ Commercial Radio Tariff, ignoring the key differences between webcasting and terrestrial radio, as demonstrated by Re:Sound’s evidence.

 

Resources:

On May 16, 2014, the Copyright Board of Canada issued its decision setting rates for Re:Sound’s Tariff 8 – Non-Interactive & Semi-Interactive Webcasts, 2009-2012. (Government Fact Sheet)

On June 16, 2014, Re:Sound filed an application for Judicial Review of the Board’s decision. (Re:Sound News Release)

In response, a coalition consisting of more than 70 music organizations released a joint statement in support of Re:Sound’s Application for Judicial Review of the Copyright Board’s Tariff 8 decision setting royalty rates for webcasting services in Canada. (Joint Statement)

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The Rambler by Graham Henderson: Tariff 8 decision establishes “10% of Nothing Rates”

Graham_headphones3Blog ThumbnailThe Rambler is a column by Graham Henderson, President of Music Canada. Graham writes from time to time about developments in the music industry, new trends or just about music! Let’s face it, Graham has been around for a long time and has a lot to ramble on about.

Six years (think about that people, SIX YEARS!) after the Copyright Board of Canada began the rate-setting process for non-interactive and semi-interactive music webcasting, they finally have released their decision, a decision with far-reaching, deleterious repercussions for the music community around the world. The Copyright Board of Canada has decided that the music produced by our marvelous creators is essentially without value.

The new music streaming rates certified by the Board amount to 10% of what digital services companies have been paying while the slow wheels of the bureaucracy turned, and less than 10% of what those same services pay in the United States. And, by the way, the rates in the United States are no great shakes either and have been the subject of intense criticism from the artistic community for years. I therefore refer to the new Canadian rates as the “10% of Nothing Rates”. The decision is unconscionable. It compounds the damage done by many of the Copyright Board’s decisions on major new tariffs, which have also been the subject of Judicial Review by the Federal Court of Appeal. It will further imperil artists’ livelihoods, and threatens to rob them of the fruits of their labour in the new digital marketplace. And it will further undermine the business environment, undercutting the ability of labels and other music companies to make future investments in Canadian talent.

Let me pose a rhetorical question that throws everything into relief: Do Canadian plumbers get paid wages equivalent to 10% of American plumbers? Teachers? Auto workers? Farmers? Who? What profession receives compensation in Canada for their labour that is equal to 10% of the wages paid across the border? I will tell you who: NOBODY. So, why does the Copyright Board of Canada think this is okay to stick musicians with rates like this? Is it because they essentially think that the creative process is valueless? That is a question which will have to be answered; it and many other hard questions.

This all could have been easily avoided. The music licensing company Re:Sound provided compelling evidence to the Board, including market-rate benchmarks based on negotiated agreements they’ve had in place with music companies for years. It’s common sense that the fairest way to compensate artists and record companies for use of their music would be to respect the agreements they’ve already made with each other. But the Board, unfathomably, ignored the evidence and assigned one of the worst royalty rates in the world to the market for streaming.

The Board’s decision comes as the result of an inherently flawed system that lacks clear criteria for rate-setting. Their mandate allows them to set royalty rates for streaming music services based on what they think is “fair and equitable.” Yet they have no statutory or regulatory obligation to take into account existing agreements that the music industry and its business partners have successfully negotiated in the marketplace. Setting the rates that digital music service providers are required to pay at 10% of what they currently pay throws those negotiated agreements and the creators along with them out the window. The result is that the new royalties are anything but fair and equitable. Millionaire and billionaire owners of intermediaries will rejoice, and creators will wince.

The newly certified rates add insult to injury for artists who rely on fair compensation for use of their music in order to make a living. A recent study commissioned by the Canadian Independent Music Association (CIMA) found that individual artists in Canada are living well below the poverty line, with an average income of $7,228 per year.

Artists’ incomes have been eroding gradually for over a decade, and the decision to set webcasting rates at bargain basement levels will make it even more difficult to be a career musician in Canada. The Tariff 8 decision came down – ironically – just as artists were testifying before the Heritage Committee about the already bleak reality they face. There was an overwhelming consensus that it is nearly impossible to make a living today as a professional musician. When asked by a Committee member about the peaks and valleys musicians have in terms of earnings, Alan Doyle of one of Canada’s most beloved bands, Great Big Sea, responded, “When’s the peak again?” Jodie Ferneyhough, President of the Canadian Music Publishers Association, pointed out in his testimony that, “It’s hard to make a living on micro-pennies.”

Tariff 8 is a travesty, not only because it impoverishes Canadian creators, but also because it is completely offside with international standards that support the growth and development of the global music industry.  It puts a black mark on Canada, which now stands alone in its adherence to a mandatory tribunal process that allows a government-appointed board to completely set aside marketplace determined rates. Not one of our major trading partners behaves in this manner.

For those who are quick to blame the current government for this mess, stop right now. It was not the current government that created this mess; it IS however the current government that can fix it.

Not only is Canada an outlier, the new streaming rates will make Canada an international pariah as it impacts creators worldwide. Every artist in the world will be paid 10% of the U.S. rate when Canadian consumers stream their music. Digital music services, such as Pandora in the United States, will be breaking bad to use Canada as an example of why rates should be driven down and creators should be paid less in their own countries. I’ve written previously about Pandora opening up that box, when they sided with entrenched media and Internet companies to lobby the United States Congress to reduce royalty rates paid to performers. In a separate effort, Pandora launched a lawsuit against ASCAP to lower royalty rates paid to songwriters. Pandora’s part in the Internet Radio Fairness Act debacle in the U.S. backfired at Congress and caused a massive artist backlash that grew into the enormously successful “I Respect Music” worldwide grassroots movement. Started by artist and entrepreneur Blake Morgan, the “I Respect Music” campaign was a call to action for musicians and music lovers alike.  That groundswell of support and overwhelming respect for the cause, led Representative Jerry Nadler to introduce a Bill to ensure that artists would be paid for all forms of radio airplay.

We would be well advised here in Canada not to ignore the backlash that occurred south of the border when Pandora made that ludicrous play. Here, too, we are seeing rumblings beginning to reverberate throughout the music community in response to Tariff 8.

Not surprisingly, Re:Sound filed an Application for Judicial Review of the Board’s decision and, in response, more than 70 labels and other music organizations, including Music Canada, released a joint statement in support of their action.

As more and more artists, producers and businesses in the broader music community become aware of the real consequences the tariff will have on them and their ability to thrive in this industry, they are taking to social media to express their shock and outrage.

Toronto pianist, songwriter and producer Mark Masri:

London boyband Poacher:

Ottawa record store Compact Music:

As grim as it has been for artists over recent years, the Copyright Board’s decision on Tariff 8 divides us more clearly than ever before into winners and losers, with the intermediaries hitting the jackpot and the middle class of the music community going bust. We need to bring back the balance and restore order to the music ecosystem in Canada. A technoutopia may initially sound like it would be a land of happy citizens, but like all nebulous ideals, this vision has nothing to do with reality – it is an imaginary place, and literally “no place” we can all live.

Graham Henderson is the President of Music Canada. He also writes on an eclectic range of topics on his personal blog at www.grahamhenderson.ca.

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Under Tariff 8, Barenaked Ladies would need 9,216 plays of “If I Had $1,000,000” to earn enough royalties to buy one box of Kraft Dinner

The Copyright Board of Canada has recently set one of the worst royalty rates in the world to music streaming. It’s called Tariff 8. And it means that musicians around the world will be paid 90% less when their music is streamed by Canadian consumers.

How bad is it? Under the new rates, The Barenaked Ladies would need 9216 plays of their classic song, ‘If I Had $1,000,000’ to earn enough royalties to buy one box of Kraft Dinner, not including the ‘dijon ketchup’ they sing about in the song.

Here’s how many plays an artist would need to buy some of the other items mentioned in the song:

“If I had a million dollars… ” / 1 million dollars = 9.8 billion plays

I’d buy you a house…” / Average price of a single home in Canada: $413,215 = More than 4 billion plays

I’d buy you furniture for your house, (Maybe a nice chesterfield or an ottoman)” / Nice sofa = 16 million plays, matching ottoman = almost 5 million plays

I’d buy you a fur coat (but not a real fur coat that’s cruel)” / Faux Fur Coat = 17 million plays

“I’d buy you an exotic pet (Like a llama or an emu)” / Llama = almost 3 million plays

“We wouldn’t have to eat Kraft Dinner. (But we would eat Kraft Dinner. Of course we would, we’d just eat more.)” / Kraft Dinner = 9216 plays for a box of KD

“I’d buy you a green dress (but not a real green dress, that’s cruel)” / A real green dress (that’s cruel!) = almost 16 million plays

I’d buy you some art (a Picasso or a Garfunkel)” / Picasso recently sold at Sotheby’s for $6.5 million CAD = almost 64 billion plays

 “I’d buy you a monkey (haven’t you always wanted a monkey?)” / (It is illegal to own a monkey in Toronto.)

 “I’d be rich.” / With royalties from the Tariff 8 decision, you would not be rich.

 

More than seventy Canadian record labels and associations have signed their support for Re:Sound’s Application for Judicial Review of the Copyright Board’s Tariff 8 decision. A growing coalition of artists, labels, industry associations, and music fans are speaking out against the Copyright Board decision; to learn more and to add your voice, Like and Share the I Stand For Music Facebook Page, or tweet using the hashtag #IStand4Music.

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