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Tag archive: Tariff 8 (22)

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Re:Sound to take Tariff 8 ruling to Federal Court of Appeal

Paying artists a fraction of what their music is worth is not okay.

On Wednesday, February 24 our colleagues from Re:Sound will take the Copyright Board’s Tariff 8 ruling to the Federal Court of Appeal as they continue to fight against low streaming royalty rates. The court is judicially reviewing the Copyright Board’s decision from May 2014 that gave artists the incredibly low rate of 0.000102 per play on some digital streaming services.

Tariff 8 is disastrous for two important reasons:

  • The Copyright Board threw out commercially negotiated rates – where the marketplace of ‘willing seller and willing buyer’ decided what was
  • The Copyright Board set a rate approximately 10% of what was freely negotiated in the marketplace and a rate that is less than 10% of comparable US rates.

What does this mean in practical terms?

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Said another way, it means that real people can’t make a living.  The musicians and artists who work every day to make music in Canada are going to be even more impoverished and not paid fairly for the use of their work. According to a study by CIMA, the average income of a Canadian musician is only $7,228 per year from music-related activities.

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.

Streaming services demonstrate innovation in the music industry. The music industry is going into new spaces and doing things differently in light of a rapidly changing marketplace. But innovation only goes so far. The Board is at the heart of the problem for music creators.  It continues to set rates based on antiquated ideas that have no place in the current music landscape.

It took them six years to set Tariff 8 and they continue to move at a glacial pace on issues of critical importance to Canada’s economy.  Urgent action is needed to change the Copyright Board.

Tariff 8 sets the standard for streaming rates going forward.  So, while some may argue that services such as CBC Music, Stingray, and Slacker aren’t an artist’s only source of income or that this is only for some streaming services, the rates are appallingly low.

Artists deserve to be fairly compensated for their music. The Tariff 8 decision sends a message that music is not properly valued as a profession here, and this message is completely inconsistent with Canadian values.

The people whom we elect to solve these problems know all about the issues at the Copyright Board.  In 2014, right after the Tariff 8 decision was released, the Standing Committee on Canadian Heritage released a report on the Canadian Music Industry.  In fact, their #1 recommendation in their study was figure out how to make changes to it.

Minister Dion, at the time was so frustrated with the issues at the Copyright Board that he said that there is an urgent need for action and that, “the government and the Board would be perfectly able to fix things in the coming months if they only started now.”

We agree, Minister Dion.  We are supporting Re:Sound this week as they fight the Copyright Board’s Tariff 8 decision which has disastrous implications for the future of music in Canada.

We remain committed to this important issue, and to working with government on fixing the problems at the Copyright Board so this doesn’t happen again.

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8 Days of Tariff 8: Canadians deserve a Copyright Board that make decisions fairly and in a timely fashion

As we wrap up our 8 Days of Tariff 8 campaign, we call for reform of the Copyright Board. We are asking the Government to make regulatory changes that determine which factors are taken into consideration on Board decisions, including market rates, international comparisons, or commercially negotiated agreements.

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Our Recommendations:

  1. We call on the Government to make regulatory changes to the Copyright Board on which factors are taken into consideration on Board decisions, including market rates, international comparisons, or commercially negotiated agreements.
  2. Continue larger discussions on how the Board’s procedures can be made more productive, how the Board can be transformed to serve Canadian businesses, and how creators can realize the value of their works through fair tariffs
  3. Create a clearer understanding of criteria beyond ensuring that Copyright Board decisions are indeed “fair” and push for rates that are an international standard.

 

Thank you for your support over the last 8 days. The fight’s not over. We urge you to use the tool below to send an email to newly-appointed Copyright Board chair Justice Robert A. Blair, urging him to facilitate the prosperity of Canadian cultural businesses rather than impede it by recognizing the value of the Canadian music industry for all Canadians.

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8 Days of Tariff 8: Tariff 8 is a Lose/Lose/Lose

We believe the Tariff 8 decision set a dangerous precedent in Canada for streaming rates on music streaming services.

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There are three ways in which this decision negatively impacts the Canadian music industry:

  • Tariff 8 is bad for Canadian artists, who receive 10% of the streaming royalties from semi-interactive services as their American counterparts. This means that Canadian artists are paid 90% less than what other artists on similar services outside of the country are paid.
  • Tariff 8 is bad for international artists, who receive less royalties when their work is played on Canadian semi-interactive streaming services. This could lead to international artists refusing to have their music used on these services, potentially limiting content to Canadians.
  • Tariff 8 is bad for the economy because it shows just how unpredictable the Copyright Board is. It created a regulatory precedent that ignores the reality of the marketplace and will continue to harm the business climate and create a market of uncertainty. This may dissuade new services from entering the Canadian market, which means less choice for consumers.

Stand with us and join the conversation at #IStandForMusic.

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8 Days of Tariff 8: The Copyright Board doesn’t value musicians

Can you imagine being in a profession where your U.S. counterpart made 90% more than what you make for the same job? With Tariff 8, the Copyright Board of Canada decided that professional musicians should be paid 90% less for certain types of music streaming.

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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.

In last year’s The Rambler by Graham Henderson: Tariff 8 decision establishes “10% of Nothing Rates”, Music Canada President 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?”

If you think Canadian artists should be fairly compensated, share this image with the #IStandForMusic tag.

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8 Days of Tariff 8: What is the Copyright Board of Canada’s definition of ‘fair’?

The Copyright Board claims to operate on a “fairness principle” but has made a decision that is inherently unfair to Canadian artists, and does not take into account the differences between web and terrestrial radio, on which they based the Tariff 8 rates. This decision has created a regulatory precedent and decision that ignores the reality of the marketplace and will continue to harm the business climate and create a market uncertainty.

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We believe that if the Copyright Board of Canada wanted to embody a ‘fair’ approach, it would not have discarded existing market rates at which digital music service providers had been operating in Canada. In fact, Tariff 8 discarded years of agreements freely negotiated between digital music service providers and the music industry, setting the rates for webstreaming in Canada at 10% of the rates that the same services pay in the United States and many other countries.

 

Help raise awareness about the disastrous effects of the Copyright Board of Canada’s Tariff 8 decision by retweeting the image below:

 

Join I Stand For Music on Facebook Share The Campaign

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8 Days of Tariff 8: Making Cents of Tariff 8

When you break Tariff 8 down into real numbers, it’s terrible for musicians. On the occasion of #ThrowBackThursday, we look back at our attempt to make cents of Tariff 8. Last year, we used the Barenaked Ladies classic “If I Had a Million Dollars” to show just how many streams they would need to buy the items in the song at the rate determined by Tariff 8. As you can see, it’s pretty abysmal.

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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.

How does Tariff 8 affect you? Use our Tariff 8 Royalty Calculator to learn how much the Copyright Board of Canada thinks you deserve to be paid for your music.

 

Help raise awareness about the disastrous effects of the Copyright Board of Canada’s Tariff 8 decision by retweeting the image below:

Join I Stand For Music on Facebook Share The Campaign

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8 Days of Tariff 8: One Year Later…

It took the Copyright Board six years to come to the Tariff 8 decision. In the past year, the Board was without a chair, meaning that without quorum they were unable to move forward on issues of critical importance to Canada’s economy. Even with a newly-appointed chair, the Board itself is in desperate need of reform.

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Because all decisions are already heard and determined retroactively (for instance, Tariff 8 applies to the years 2009-12), the lack of movement in the past year has resulted in even more time and uncertainty added to the Copyright Board’s processes. The average pending tariff has been outstanding with the Copyright Board for 5.3 years since filing.

Last year, alongside our 75+ music industry partners, we pointed out that “the Board’s decision comes as a result of an inherently flawed system that lacks clear criteria for rate-setting and allows the Board to reject market rates…it is clear that a legislative framework that ignores the reality of the marketplace is one that will continue to harm the business climate and create market uncertainty, delaying the entry of new services into the Canadian marketplace.”

Help raise awareness about the disastrous effects of the Copyright Board of Canada’s Tariff 8 decision by retweeting the image below:

 

Join I Stand For Music on Facebook Share The Campaign

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8 Days of Tariff 8: The Music Community’s Response to Tariff 8

One year ago today, the I Stand For Music coalition issued a joint statement in support of Re:Sound’s application for judicial review of the Copyright Board’s Tariff 8 decision. Together, 75+ record labels and associations spoke up about what a serious setback Tariff 8 was for the music community in Canada, for artists, and the music companies who invest in their careers.

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Follow updates on the campaign by liking the I Stand For Music Facebook page.

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8 Days of Tariff 8: Happy Birthday, Tariff 8

Happy Birthday, Tariff 8

It’s been one year since the Copyright Board of Canada set one of the worst royalty rates in the world for music streaming on services like Songza and CBC Music. 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. To mark the occasion, we are launching the “8 Days of Tariff 8” campaign that will highlight the importance of the issue and what has happened in the year since the decision.

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Through this campaign, we hope to highlight the decision from last year, but importantly, to talk about the kind of precedent it has set going forward for royalty rates on these kinds of services in Canada. Most important, is that we are calling on music lovers and industry folks across the country to stand with us as we call for reform of the Copyright Board.

If you’re new to the world of royalties and streaming, check out some of our campaign materials from last year to get up-to-speed on what Tariff 8 means to Canadian musicians, international artists, and you, the consumer

For the next 8 days, follow us on social media, and let everyone know that you stand with us by using the #IStandForMusic hashtag.

Join I Stand For Music on Facebook Share The Campaign

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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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