Anyone whose business includes live events in Canada –
convention centres, reception halls, restaurants, hotels, sports
arenas, theatres, karaoke bars and more – will soon be
paying more to use recorded music.
These venues have all paid royalties for years to SOCAN, the
Canadian copyright collective representing authors, composers and
publishers. If the venues use recorded (rather than live) music,
they will now have to pay fees to a second collective, Re:Sound
Music Licensing Company. Re:Sound is unaffiliated with SOCAN, and
represents record companies and performers. The collective filed a
proposed Live Events Tariff with the Copyright Board of Canada back
in 2007. After several years of negotiation between Re:Sound and
affected groups, and a written proceeding before the Copyright
Board, the Board certified Re:Sound Tariff No. 5, Use of Music to Accompany
Live Events (2008-2012) on May 26.
Much of Tariff No. 5 is based on, or similar to, the comparable
SOCAN tariffs, but Re:Sound proposed and negotiated different rates
and other terms reflecting its view of the use of recorded music by
the venues, and its value to them.
In its recent press release, Re:Sound touts the
"collaborative approach" taken to arriving at Tariff No.
5; the first time it has worked with objectors on the terms of an
inaugural tariff proposal.
The objectors ranged from the Canadian Restaurant and Foodservices
Association, to the National Football League, to the Ottawa
Festivals Network and the Weyburn Agricultural Society. There were
so many objectors, from different industries, that the Copyright
Board grouped them into four categories: Arts (including National
Arts Centre, Sony Centre), Festivals (including Canadian
Association of Festivals and Exhibitions), Hospitality (hotel,
restaurant and food services associations), and Sports (including
Maple Leaf Sports and Entertainment, NHL and Rogers Centre).
Re:Sound is still negotiating parts of the tariff with the Sports
and Arts objectors.
While some media reported that the Copyright Board has
"decided to charge" establishments to use music, the
Board's role was simply to certify the tariff that was proposed
by Re:Sound. It is now up to Re:Sound to collect on Tariff No.
On that front, Re: Sound states that it "will begin its
outreach efforts to licensees immediately, including working with
trade organizations". With payments – including
retroactive payments, with interest – due by October 1
under the tariff, this means that Re:Sound will be sending
letters and placing calls to businesses across Canada to collect,
"immediately", and over the summer.
But 2008, you say? Yes, the tariff is retroactive to 2008. In fact,
the Board's estimate of payments owed to Re:Sound is
over $1.8 million for 2008 alone.
Here are a few of the rates applicable to different establishments
under Tariff No. 5:
Restaurants, cafes, taverns and other establishments
with recorded music accompanying live entertainment:
minimum annual fee of $37.64;
Conventions, wedding receptions, fashion
shows: $78.66 per event with more than 500 room capacity,
Festivals, fairs, exhibitions: $42.05 per day,
for between 50,001 and 75,000 visitors;
Bars offering karaoke more than 3 days a week:
Sound and light shows, fireworks displays,
circuses: minimum $61.85 per event;
Parades: minimum $32.55 per day;
Parks, streets, other public areas: minimum
$16.28 per day.
Venues should review the tariff carefully to understand how it
applies to them, what rates apply, what information must be
reported to Re:Sound, and when payments (including retroactive
payments and interest) are due.
...and remember that while the Beatles "don't care too
much for money", Re:Sound does expect to get paid.
About Fraser Milner Casgrain LLP (FMC)
FMC is one of Canada's leading business and litigation law
firms with more than 500 lawyers in six full-service offices
located in the country's key business centres. We focus on
providing outstanding service and value to our clients, and we
strive to excel as a workplace of choice for our people. Regardless
of where you choose to do business in Canada, our strong team of
professionals possess knowledge and expertise on regional, national
and cross-border matters. FMC's well-earned reputation for
consistently delivering the highest quality legal services and
counsel to our clients is complemented by an ongoing commitment to
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