Canada: CSI Proposes Tariffs for Non-Commercial Radio Stations (2011), Online Music (2011), and Satellite Radio (2011-2013)

CSI proposes tariffs for non-commercial radio stations (2011), online music (2011), and satellite radio (2011-2013)

On July 17, 2010, CSI, the company formed as a royalty-collection vehicle by the Canadian Musical Reproduction Rights Agency (CMRRA) and the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) , proposed three new tariffs which would apply to the reproduction of music (which can include broadcasting, streaming and downloading) by non-commercial radio stations, online music providers, and satellite radio providers.

In the proposed CMRRA-SODRAC Inc. Non-Commercial Radio Tariff, 2011, CSI is requesting that the Copyright Board of Canada certify a tariff of 0.63% of the annual gross operating costs of radio stations that are either owned or operated by not-for-profit corporations, excluding the Canadian Broadcasting Corporation. In the case of such a non-commercial radio station that is a "low use station" (generally, a station that plays music for less than 20% of its broadcast time), the tariff would be lower, at 0.23% of its annual gross operating costs. In exchange for the payment of the tariff, the non-commercial radio stations would receive a license to broadcast music contained in CSI's repertoire as often as desired, including the streaming of the broadcast over the Internet.

The CMRRA's two previous applications for a tariff on the reproduction of music by non-commercial radio are CMRRA Non-Commercial Radio Tariff, 2008 and CMRRA Non-Commercial Radio Tariff, 2009 and 2010, but no decisions on those applications have yet been made. In the proposed 2008 and 2009-10 tariffs, the tariff percentage was different for English and French stations, and in addition, a station's gross operating costs were divided into three tiers, with different tariff rates applicable to each tier. Below is a table comparing the rates requested by the CMRRA in the 2008 and 2009-10 tariffs with the new CSI 2011 tariff:

Levels of Music Use

Tiers of gross operating costs (applicable in 2008-2010 only)

2008 and 2009-10 Proposed Tariffs

2011 Proposed Tariff

Low-use

up to $625,000

0.06% (English)

0.03% (French)

0.23% (both languages)

from $625,0000 to $1,250,000

0.12% (English)

0.05% (French)

above $1,250,000

0.18% (English)

0.08% (French)

Non Low-use

up to $625,000

0.14% (English)

0.06% (French)

0.63% (both languages)

from $625,0000 to $1,250,000

0.28% (English)

0.12% (French)

above $1,250,000

0.42% (English)

0.18% (French)

An important difference between the 2008 and 2009-10 tariffs and the 2011 tariff which may partly explain why CSI is seeking substantial increases in the tariff rates is that the proposed 2011 tariff would cover the simulcast (streaming) of the broadcast online, whereas the 2008 and 2009-10 tariffs excluded all kinds of transmissions over the Internet.

In the proposed CSI Online Music Services Tariff, 2011, CSI is requesting that the Copyright Board certify new tariffs for 2011 for webcasting, streaming and downloading of music from the Internet (this does not apply to streaming of music in radio broadcasts that are the subject of other CSI tariffs, such as the non-commercial radio tariff described above). CSI has requested:

  1. for webcasting where consumers cannot influence the selection of music which is transmitted, a tariff equal to 3.5% of monthly gross revenue, in proportion to the amount of CSI-controlled music played in the month, with a minimum of 0.05¢ for each play of a CSI-controlled musical work;
  2. for webcasting where consumers are able to influence the selection of music which is transmitted, a tariff equal to 4.5% of monthly gross revenue, in proportion to the amount of CSI-controlled music played in the month, with a minimum of 0.065¢ for each play of a CSI-controlled musical work;
  3. for on-demand streaming of music files that does not include the ability to download, a tariff equal to the greater of either (1) 6.8% of monthly gross revenue (excluding any amounts paid for downloads), in proportion to the amount of CSI-controlled music played in the month, and (2) the same percentage payable to the Society of Composers, Authors and Music Publishers of Canada (SOCAN) for the same service pursuant to the SOCAN Tariff 22.A (2011). This tariff would also be subject to a minimum equal to the greater of (1) 43¢ per subscriber, (2) 0.15¢ for each play of CSI-controlled music, and (3) the minimum amount payable to SOCAN for the service pursuant to the SOCAN Tariff 22.A (2011);
  4. for limited downloads (downloads where the file becomes unusable upon the happening of a certain event), a tariff equal to the greater of either (1) 9.9% of monthly gross revenue (excluding any amounts paid for permanent downloads), in proportion to the number of limited downloads of CSI-controlled music in the month, and (2) twice the percentage payable to the Society of Composers, Authors and Music Publishers of Canada (SOCAN) for the same service pursuant to the SOCAN Tariff 22.A (2011). This tariff would also be subject to a minimum equal to the greater of (1) 96¢ per subscriber if the limited download can be transferred to a device other than the one used to receive it (portable downloads), and 63¢ per subscriber if they are not portable, (2) 0.20¢ for each play of CSI-controlled music, and (3) twice the minimum amount payable to SOCAN for the service pursuant to the SOCAN Tariff 22.A (2011); and
  5. for permanent downloads, a tariff equal to the greater of either (1) 9.9% of monthly gross revenue, in proportion to the number of permanent downloads of CSI-controlled music in the month, and (2) twice the percentage payable to the Society of Composers, Authors and Music Publishers of Canada (SOCAN) for the same service pursuant to the SOCAN Tariff 22.A (2011). This tariff would also be subject to a minimum equal to the greater of (1) 4.4¢ per permanent download in a bundle that contains 15 or more files and 6.6¢ per permanent download in all other cases, and (2) twice the minimum amount payable to SOCAN for the service pursuant to the SOCAN Tariff 22.A (2011).

CSI's proposed 2011 tariff differs from its proposed 2010 tariff by introducing the concepts of interactive and non-interactive webcasting, which are distinguished from on-demand streaming. Further, the minimums for on-demand streaming and limited downloads in 2010 only contemplated an amount per subscriber, not per play. Otherwise, the rates in the 2011 application remain unchanged from the 2010 levels. The Copyright Board's most recent certification of a CSI tariff for online music was its March 2007 decision regarding the tariff for the years 2005-2007.

Finally, in Satellite Radio Services Tariff (CMRRA-SODRAC Inc. 2011, 2012, 2013), CSI is requesting that the Copyright Board certify a tariff for 2011-2013 for the provision of music to subscribers through a satellite radio service. The proposed tariff would be one of the following percentages applied to the satellite radio service's monthly revenues from subscription fees, advertising and promotional activities, sales of goods and services and commissions on third-party transactions:

  1. for all satellite radio broadcasts to receivers that are not enabled for either extended buffer or replay or for storing individual songs for playback later, 1% or a minimum of 10¢ per subscriber who owns such a receiver;
  2. where the broadcast is sent to receivers enabled for extended buffer or replay, a percentage equal to 1.87 times the proportion of subscribers who own receivers enabled for extended buffer or replay, but not able to store individual songs or blocks of programming for playback at another time, to the total number of subscribers (subject to a minimum of 19¢ per subscriber who owns such a receiver);
  3. where the broadcast is sent to receivers enabled to store individual songs or blocks of programming for playback at another time, a percentage equal to 2.90 times the proportion of subscribers who own receivers enabled to store individual songs or blocks of programming for playback at another time to the total number of subscribers (subject to a minimum of 29¢ per subscriber who owns such a receiver).

CSI's requested tariff for satellite radio services for 2011-2013 matches the amounts in the Satellite Radio Services Tariff (SOCAN: 2005-2009; NRCC: 2007-2010; CSI: 2006-2009) which was certified by the Copyright Board in a decision issued in April 2009.

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.

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