As noted in a previous blog post on Re:Sound1 Tariff No. 6.B (Use of Recorded Music to Accompany Physical Activities), sets the royalties to be paid for the performance in public or communication to the public of published sound recordings in any indoor or outdoor venue for the purposes of fitness, training, skating, dance instruction or any other physical activity. The Copyright Board has recently issued its final decision on this Tariff.

What does this mean for you?

If you operate a venue which holds fitness or dance classes or other kinds of physical activities, or you operate an indoor/outdoor skating venue, and sound recordings are played, Re:Sound can collect royalties retroactively to 2008 – 2012, based on the new tariff rates set out below:

Use of Music/Activities Royalties Payable
Background Music (Fitness)
 In areas with weight training, cardiovascular training, circuit training, and other similar activities, other than fitness classes		 - 3.2% of the amount paid to subscribe to a third-party music supplier, or
- 0.0831 ¢ per admission
Fitness Classes and Dance Classes
During fitness classes		 Amount per class:
31.0 ¢ (2008)
31.9 ¢ (2009)
32.8 ¢ (2010)
33.8 ¢ (2011)
34.8 ¢ (2012)
Skating - 0.44% of the gross receipts from admissions, subject to a minimum of $38.18
- flat fee of $38.18 per year per venue if no admission fee is charged

The only real change from the previously certified tariff is to the tariffs for Fitness Classes and Dance Classes, which previously were a flat fee of $105.74 per year per venue and $23.42 per year per venue.

Given the Board's comments (see below), it is likely that your organization will owe more under these new rates, although it may turn out that it is Re:Sound that owes you money.

Copyright Board's Decision

The Board was asked to determine rates under Tariff 6.B related to fitness classes, dance instruction, and other physical activity.  Of interest, Re:Sound and Fitness Industry Council of Canada ("FIC") and Goodlife Fitness Centres Inc. reached a settlement agreement on the rates to be charged prior to the Board's decision.2

The Board commented on the Settlement, noting that:

  • An agreement between the parties should have been proposed prior to the Board's 2012 decision and prior to the hearing.
  • Rates regarding Background Music (Fitness) and Skating were not being re-determined so it did not matter that the parties had agreed to different rates in the Settlement.
  • The Settlement was "substantially" different from the tariff originally proposed.  The new rates and formulas proposed would create administrative difficulties as retroactive payments would have to be recalculated.  The Board suggested:

[The] balance of convenience could lead Re:Sound to refrain from retroactively collecting royalties from users who have already paid under Tariff 6.B and who were not represented by the Parties during the negotiations leading to the Settlement...3

Some users may end up owing less than under the previously certified tariff.

  • The extent to which dance instruction venues was represented by FIC was unknown, and the lack of evidence prevented the Board from examining possible fairness issues in respect of dance instruction venues.
  • The tariff will generally result in higher royalties payable.

Footnotes

1. Re:Sound obtains fair compensation for performers and makers (i.e. artists and record companies) for their performance rights through Re:Sound licenses and the collection of royalties, while SOCAN represents the performance rights of composers, authors, and music publishers – SOCAN covers the compositions while Re:Sound covers the recordings.

2. Together, the Board noted that FIC and Goodlife account for over 5,000 fitness venues with over 4,000,000 members (para.55).

3. Para.54.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.