New Tariff Aims to Benefit Struggling Musicians by Discouraging Dancing?

On May 31, the Copyright Board of Canada certified a new tariff on the use of recorded music played at events such as weddings, karaoke, and conventions. The tariff will be paid to collective Re:Sound, which represents the rights of artists and music labels.

Section 68(4) of the Copyright Act certifies the tariffs paid by those playing recorded music to collective societies. A number of justifications for the existence of these tariffs are up for discussion, chief among them being the necessity of ensuring that those involved in music production be rewarded and compensated for their efforts. The new tariff will allow artists to benefit from the use of their recorded music at events. This tariff is in addition to one already paid to SOCAN, which collects a tariff on behalf of songwriters whose music is played at various venues. It is the responsibility of the venues to pay the tariff; however, the venues may choose to distribute this cost at will. For example, couples planning a wedding will experience an additional charge from the venue to cover the cost of the tariff.

The existence of more than one tariff covering the same use of music has led many critics to question the effectiveness of the collectives and the alleged benefit such tariffs have for the artists registered with Re:Sound or SOCAN. On the one hand, it cannot be denied that music has an inherent value and some importance should be placed on ensuring that people pay for the music they enjoy. Furthermore, the tariff is said to benefit lesser-known and independent artists more than famous names and record labels by helping these individuals earn a living making music. The cost to listeners should be minimal. For example, venues that host events will pay $9.25 a day for gatherings with less than 100 attendees.

While the argument in favour of supporting musicians’ careers and acknowledging the value of music is an important one, critics articulate a number of opposing arguments. Skeptics point out that tariffs are constantly increasing without any solid evidence that it is indeed the artists who benefit the most. According to one article, “[t]he ones who really and consistently benefit the most [from the tariffs] are those who run the collectives, those who are consultants to the collectives, and the lawyers who punctually pursue new and higher Copyright Board tariffs using money raised from the previous tariffs and paid for ultimately by the Canadian public.”

While the statistics on how much artists are actually benefitting from tariffs are beyond the scope of this blog post, I think the critics’ arguments deserve consideration. The new tariff doubles the cost of playing recorded music if guests at an event are going to be dancing. This additional cost lacks explanation.  If anything, it suggests that dancing is more valuable or more enjoyable than listening – a suggestions that probably depends on who you ask.  Or who you dance with.

Nora Sleeth is a JD candidate at Osgoode Hall Law School. 

4 Comments
  1. Hi Nora,
    The existence of two tariffs covering the same use of music is required because SOCAN and Re:Sound collect royalties for different rights holders. If only one collective has a tariff for a particular use there are rights holders (represented by the other collective) that are not being compensated.

    As someone currently looking into booking a venue for a wedding reception I found the increased cost for events with dancing interesting. I believe the explanation is that the copyright board found that music used in association with dancing has a higher value compared to music without dancing, for example when it is only used as background music.

    If you want a really interesting and obscure copyright tariff decision have a read through the copyright boards decision in Re:Sound Tariff 6.B (http://www.cb-cda.gc.ca/home-accueil-e.html)

    Cheers,

    Sean

  2. Music for Dancing now requires a tariff??

    I’m sorry but I just cannot stand this cash grab being made by all of these organizations when it comes to copyright and music….

    I mean, I understand it and all. But what If I bought every one of those CDs myself?? Do they still have a right to charge me for playing those CDs at an event where I am not charging cover (and am actually probably losing money) like at a wedding.

    As Nora Sleeth hints at, the statistics of how much the artists are ACTUALLY benefits from these tarrifs is probably a joke. What is the real purpose of all this?

    Who knows! More red tape to drive is crazy LOL

    Sincerely,
    Chris from BMHQ

  3. Hey Nora,

    Sean’s comment provides a lot of insight into this issue – it is more a product of history (late recognition of producer/performer rights) that two distinct collectives manage royalties over the same use. However, one can also sympathize with the venue owner when Re:Sound shows up asking to be paid for something which the owner thought he or she had already paid for. It isn’t ideal for either party.

    However, a couple of observations.

    First, unlike in the US, the Copyright Board sets royalties to be collected by SOCAN and Re:Sound over the same use at a 1:1 ratio. This deliberate structuring of royalties over the same use, was alluded to by Rothstein J in his dissent in ESA v SOCAN, as a possible solution to the somewhat similar issue (at least to the user’s bottom line) in that case. Thus, the problem may not be as acute as it appears (emphasis on the “may”).

    Second, this tariff structure – events which include dancing pay double the performance royalty that events which do not include dancing pay – has existed since 1991. This is merely the mirror of SOCAN Tariff 8.

    While I sympathize with you that the relative value of music for the purposes of dancing vs. good-old fashioned listening is certainly subjective, I will build on Sean’s comment.

    Recall that the “user” who pays the tariff is the reception hall owner, not the individual patrons who are actually enjoying the music (although the cost is ultimately passed down). Thus, the Board is not considering the subjective value of music to the ear, but to profit margins and the relative use of music by reception hall owners.

    The idea is, for owners of venues where dancing is included, the music has more value because he or she is using more of it from a qualitative standpoint.

    If there is no dancing, then presumably the music is being “used less,” for example, as mere background music to the function. From another angle, it could be said that it would be unfair to charge these owners the same as those which host dancing because they rely less on music for their business, and ought to pay less.

    Whether this is a convincing explanation, however, is an entirely different issue.

    In my opinion, the real tension with this tariff is the notion that a wedding (for example) ought to be legally characterized as a performance “in public.”

  4. @Ken Anderson

    Excellent Explanation!

    The whole thing definitely makes more sense now. Especially when you point out that it is actually the owner of the venue who pays the fee but he just passes this down to whoever is renting it out.

    I’m not sure I agree with the whole thing, but as with most things in life, things are more complicated than they seem.

    Thanks for such a great explanation.

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