RADIO ROYALTIES REMAIN THE SAME, COPYRIGHT BOARD RULES Broadcaster The increased share of radio ad revenues to which musicians, composers and songwriters are entitled, following a controversial copyright decision tabled two years ago, must remain, says the Copyright Board of Canada.
The Board issued a decision setting the royalties that commercial radio stations must pay to the Society of Composers, Authors and Music Publishers of Canada and to the Neighbouring Rights Collective of Canada for their use of music in 2003 to 2007 last week.
The decision maintains the rates that were set in October 2005.
On October 14, 2005, the Board issued a first decision for these same stations and for the same period. On the first $1.25 million of annual advertising revenues of a radio station, the SOCAN rate was set at 3.2 per cent of that amount, while a statutory rate of $100 applied for NRCC. For the rest, the rate was set at 4.4 per cent for SOCAN and 2.1 per cent for NRCC. As a result, small and medium-sized stations continued to pay at the same rate as before while the rate for larger stations increased to 4.4 per cent on yearly advertising revenues in excess of $1.25 million.
Low music-use stations paid 1.5 per cent to SOCAN and 0.75 per cent to NRCC. On October 19, 2006, the Federal Court of Appeal set the 2005 decision aside and remitted it to the Board for re-determination on the basis that it had inadequately explained its reasoning on arriving at royalty increases attributable to the historical undervaluation of music used on radio and the greater efficiencies achieved by the radio broadcasting industry through the use of music.
Claude Majeau, Secretary General to the Board, explained that "parties submitted new evidence that allowed the Board to assess the value of the music to broadcasters from different viewpoints. Using the methodology put forward by the broadcasters, and after a number of adjustments, the Board revisited the factors it identified in 2005 to justify the royalty increase, and came to the same conclusions."
The Board believes, as it did in 2005, that the value of music to broadcasters has increased significantly since 1987. The three factors explaining this higher value of music remain the same as in 2005. First, broadcasters use more music. Second, music is worth more to the broadcasters than the Board previously thought. Third, commercial radio stations now use music more efficiently. |