I Stand For Music - Speak Out Against Tariff 8!

This tariff decision is a serious setback for the music community in Canada, and for the artists and music companies who invest in their careers. While setting rates for webstreaming services in Canada at less than 10% of the rate the same services pay in the US and other countries, this decision disregards years of agreements freely negotiated between digital music service providers and the music industry.

In light of this, CIMA has joined together with our colleagues at Music Canada, ADISQ and CCMIA to support Re:Sound’s application for judicial review of the Tariff 8 decision. In a show of support, CIMA’s member labels were approached to sign onto the joint statement, alongside the provincial MIAs, major labels, ADISQ member labels and the Canadian Federation of Musicians. We strongly believe that a unified music industry voice would send a strong message to the government on this issue. Over the past few weeks, other organizations like Canadian Music Week, the Canadian Association for the Advancement of Music & the Arts and the East Coast Music Association have joined this important fight.

But these efforts don’t stop at the joint statement. Find out how you can stand up for the music community and voice your opposition to Tariff 8.

Re:Sound’s Tariff 8 Fact Sheet

Unsure of what the problem with Tariff 8 is? Still need convincing? What does Re:Sound’s judicial review entail?

Check out ReSound – Tariff 8 Fact Sheet for more information!

Join The Social Media Campaign!

Want to get your voice heard? We’re up and actively mobilizing on Facebook and Twitter – connect with us and get your voice heard!

Facebook: Like/comment on the I Stand For Music page, created with our partners at Music Canada, CCMIA and ADISQ.

Follow us on Twitter and use the #tariff8 and #IStand4Music to keep the conversation going


Email The Honourable James Moore, Minister of Industry

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Want to get your voice heard on Tariff 8? Already liked the I Stand For Music Facebook page but wondering what’s next?

Our colleagues over at Music Canada have built a handy tool that’ll let you send the Tariff 8 Open Letter directly to the Honourable James Moore, Minister of Industry (and thank you to ADISQ for providing a French translation!). The sample text of the letter is below. 

Have your say by clicking here – and urge the government to take the necessary steps to correct Tariff 8.

OPEN LETTER TO THE HONOURABLE JAMES MOORE, MINISTER OF INDUSTRY

The Honourable James Moore, P.C., M.P.
Minister of Industry
House of Commons
Ottawa, ON
K1A 0A6

Re: Re:Sound Tariff 8 – Non-Interactive and Semi-Interactive Webcasts, 2009-2012

Dear Minister Moore:

On May 16, 2014, the Copyright Board of Canada set the world’s worst royalty rates for non-interactive (e.g. CBC Music) and semi-interactive (e.g. Songza and Pandora) music streaming.

The Tariff 8 decision is a serious setback for the music community in Canada, for artists and the music companies who invest in their careers.

Tariff 8 rates amount to approximately 10% of what digital services companies have been paying here in Canada and less than 10% of what those same services pay in the United States. The new rates basically mean a 90% pay cut for artists. What other profession receives compensation in Canada for their labour that is equal to 10% of the wages paid across the border?

To put that in perspective, as an artist, you would need 12,647 plays to make enough money to buy a digital download of your own song, and 16,000 plays of your song to buy a coffee at Tim Horton’s.

The decision discards years of agreements freely negotiated between digital music service providers and the music industry and sends a message to the world that it does not value music as a profession. This is inconsistent with Canadian values.

I, therefore, urge the government to take the necessary steps to fix Tariff 8 so Canada is not offside with royalty rates in the United States and around the world.

Nothing less than urgent action is needed to support Canadian creators and bring Canada in line with international standards that support the growth and development of the global music industry. I Stand for Music, a music coalition that includes more than 75 music companies (labels and associations), is united in its stance against the Tariff 8 decision. I stand with the Canadian music community, and I appeal to you, too, to stand for music.

– – –

Monsieur le Ministre,

Le 16 mai 2014, la Commission du droit d’auteur du Canada a établi les pires tarifs au monde concernant les redevances pour la webdiffusion de musique en mode non interactif (ICI Musique de Radio-Canada, p. ex.) et en mode semi-interactif (Songza et Pandora, p. ex.).

La décision sur le tarif no 8 constitue un recul important tant pour l’industrie musicale au Canada que pour les artistes et les entreprises qui investissent dans leur carrière.

La décision sur le tarif no 8 fixe les redevances à environ 10 % du montant que les fournisseurs de services numériques au Canada acceptaient de payer et à moins de 10 % de celui déboursé pour les mêmes services aux États-Unis. Autrement dit, les nouveaux tarifs représentent une diminution de salaire de 90 % pour les artistes. Quel autre métier au Canada est rémunéré l’équivalent d’à peine 10 % du salaire offert chez nos voisins américains?

Pour mettre les choses en perspective, un artiste aura besoin des revenus de 12 647 webdiffusions d’une de ses chansons pour acheter un téléchargement de celle-ci et de 16 000 webdiffusions pour se payer un café au restaurant Tim Horton du coin.

La décision fait fi des ententes conclues librement pendant des années entre les fournisseurs de musique numérique et l’industrie de la musique. De plus, elle laisse croire au reste du monde que le Canada mésestime les métiers de la musique. Cette attitude va à l’encontre des valeurs canadiennes.

Devant cet état de fait, j’exhorte le gouvernement à prendre les mesures nécessaires pour fixer les redevances du tarif no 8 de façon à ce que les taux canadiens soient semblables à ceux que l’on retrouve aux États-Unis et dans le reste du monde.

Seule une intervention urgente peut aider les créateurs canadiens et permettre au Canada de se conformer aux normes internationales en vigueur afin de soutenir la croissance et le développement de l’industrie de la musique sur le marché mondial. Le mouvement I Stand for Music, une coalition regroupant plus de 75 intervenants de l’industrie de la musique (compagnies de disques et associations), s’oppose à la décision sur le tarif no 8. J’appuie l’industrie canadienne de la musique et je vous invite, à votre tour, à appuyer la musique.

5 Things You Need To Know About The Copyright Board of Canada’s Ruling On Digital Streaming Services

On Friday May 16, just before the long weekend, the Copyright Board of Canada made a long-awaited ruling on the royalties that digital streaming services would be expected to pay to rights holders. The resulting tariff, Re:Sound Tariff 8 – Non-Interactive and Semi-Interactive Webcasts, 2009-2012, was the Board’s response to the statements filed by Re:Sound Music Licensing Company, the private Canadian, not-for-profit collective society authorized under the Copyright Act to administer the performance rights of both performers and record labels in their sound recordings, back in 2008 and 2011.

As an FYI, the Copyright Board 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. [Copyright Board Mandate]. It’s important to note that the Copyright Board sets rates based on what it considers to be “fair” as opposed to using market rates as benchmarks.

So yes, it did take a long time for the Board to render its ruling – which is unfortunately the norm in these cases. This is partially what experts believe is responsible for the slow growth of streaming services within Canada – while streaming services are able to sign interim agreements with Re:Sound to enter the Canadian market, some (Pandora, most notably) have opted to wait for the Copyright Board to set rates to get a certain level of cost certainty to their business operations.

The contents of Tariff 8 are important for music companies and artists alike – so here’s a rundown of the 5 things you need to know:

1. What type of activities does this ruling cover?

Re:Sound Tariff 8 covers a series of activities, specifically the following:

  • Non-interactive webcasting by commercial webcasters and the CBC. Non-interactive webcasts refer to any audio streaming that the user doesn’t exercise any control over the content or timing. A good example would be any sort of Internet radio – i.e. Pandora.
  • Semi-interactive webcasting by commercial webcasters and the CBC. Semi-interactive webcasts are those in which the recipient has some level of control over timing or content. An example would be Songza, where you can skip, pause and change playlists.
  • All webcasting activities that are undertaken by non-commercial webcasters.

It’s also important to note that this ruling is backdated – since the original statement was filed back in 2008, Re:Sound is now entitled to collect any royalties from any of the above activities starting on January 1, 2009.

2. What were the rates certified by the Copyright Board?

In the May 16 decision, the Board outlined the following tariffs:

CBC

  • Webcast
  • Minimum Fee
  • 13.1¢ per 1,000 plays
  • $100 per year

Commercial Webcaster

  • Webcast
  • Minimum Fee
  • 10.2¢ per 1,000 plays
  • $100 per year

Non-commercial webcaster

  • Minimum Fee
  • 25$ per year

These rates are determined following a consultation process, both with Re:Sound (who presented their own suggested tariff rates) as well as the objectors. These included representatives from Pandora, NCRA, CAB, Quebecor, Shaw and Rogers, among others. The hearing took place over a 10-day period in 2012.

Interestingly, the Board noted that their per-play rates (as listed above) came closer to what was proposed by the music services rather than what was proposed by Re:Sound (Source: News Release, Copyright Board of Canada). In their news release, Gilles McDougall (Secretary General of the Board) stated that “I believe that royalties to be paid in respect of the tariff set today are fair and equitable for both the users and the copyright owners. These royalty rates will not be an impediment for webcasters to do business in Canada”.

Furthermore, the rates are less than 10% of the rates already negotiated by Re:Sound in its direct agreements with streaming services that already operate in Canada, and less than 10% of the rate used in the US. The Copyright Board rejected the use of American market rates as relevant benchmarks, choosing instead to base their rights on what the commercial webcasters suggested (in addition to fundamentally misunderstanding the differences between terrestrial radio and webcasting).

3. What was Re:Sound suggesting in terms of royalty rates?

According to the Copyright Board’s documentation, Re:Sound was suggesting a per-play tariff of $1.00 – $2.30 per 1,000 plays. This is closer to the rate currently paid out by these services in the United States as set out by the Copyright Royalty Board ($1.10 per 1,000 plays) – which Re:Sound argues is the market rate.

In their own press release, Re:Sound’s President Ian MacKay offered the following quote. “We are disappointed that the rates certified by the Board do not reflect market rates in Canada and are a small fraction of the rates payable by the same services in the U.S. While the rates are low, the fact that they are based on a per play formula ensures that rights holders are compensated for each and every use of their music, regardless of the business model of the particular service”.

4. What does this mean for commercial webcasters in financial terms?

The decision also provided an estimate of what this decision would mean financially for commercial webcasters, and gave an idea of what kind of royalty payments Re:Sound can expect to receive.

  • For very-large webcasters (i.e. Pandora): At about 3,000 million plays per year that gross about $5,800,000 in revenues annually, they can expect to pay out about $306,000 in estimated annual royalties.
  • For large webcasters (i.e Songza): At about 70 million plays/year and that gross about $130,000 annually, they will be looking at paying out about $7,140 per year.
  • The CBC, for its part, is looking at approximately $36,000 annually in royalties.
  • McDougall estimated that Re:Sound can expect to receive approximately $500,000 annually from this newly instated tariff.

5. What does this really mean?

It means that Canada has set one of the lowest rates for music streaming in the world! This decision is a major setback for artists, and the labels who support them. To put the numbers into perspective:

  • An artist would need 12,647 plays to be able to purchase their own song on iTunes.
  • Want a TTC metropass? You’ll need 1.3 million plays to buy one!
  • A tank of gas to be able to go on tour? Your song will need to be streamed 588,420 times.

All numbers were obtained courtesy of Music Canada via the I Stand For Music Facebook Page.

Read more on the Copyright Board of Canada’s website: