Collectives Win Big at the Copyright Board of Canada

The Copyright Board of Canada this morning issued its decision on royalties for music played on commercial radio stations.  The decision is a huge win for the copyright collectives (SOCAN and NRCC) and a corresponding loss for the Canadian Association of Broadcasters.  The Board has ruled that the prior tariffs significantly understated the value of music to radio stations and therefore increased the royalty rates by roughly 30 percent.  The Board cites radio's growing and more efficient use of music as the primary reasons for the decision.

The Board clearly had little patience for the CAB as it consistently dismissed its arguments such as the CAB's claim that Canada should match U.S. rates.  Moreover, it even takes a swipe at Parliament for Section 68(1) of the Copyright Act, which reduces the royalty paid to the NRCC, describing it as best a "thinly veiled subsidy."

The decision has a couple of immediate ramifications.  First, Canadian artists are about to get a big increase in their earnings, particularly since the decision is retroactive to 2003.  The claims that Canadian artists have been hurt in the digital era takes another hit as the artists collectively have earned millions more with this decision.  Second, this decision may put huge pressure on Bill C-60, since the broadcasters were already dismayed at the absence of a provision to deal with payments for ephemeral rights.  With those same broadcasters now on the hook for millions more in royalties, look for them to increase the pressure to deal with the ephemeral issue now, rather than after a planned public consultation this fall.

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