Music orgs suing public establishments to recover royalties

While the Canadian music industry aims to address revenue shortfalls in the face of increasing internet competition, amalgamators of their content rights have been filing lawsuits against public establishments who they allege have been playing their music without a license. The Federal Court lawsuits brought against establishments, such as restaurants, bars and nightclubs, point to royalties due in the Copyright Act, including tariffs for playing live music and hosting karaoke. They date at least as far back as the early 2000s. The Wire Report counted over 40 such lawsuits since last year -- and including this year -- against these public places across the country. They are being filed by Re:Sound and the Society of Composers, Authors and Music Publishers of Canada (SOCAN). A search of the court registry shows SOCAN has, so far, filed at least 13 lawsuits this year and 16 last year, and RE:Sound filed at least one this year and 11 last year. This publication got ahold of 28 claim statements from this year and last involving both organizations, which are asking for a total of around $500,000 at the top end, but offer the court lower-cost alternatives to settle matters if it finds those more reasonable. Some claims are currently being amended, court officials said. The royalties being requested extend retroactively to periods dating from as far back as 2008 to as recently as last year. The rates vary, depending on how the music is broadcast and how many people the venue holds, and the tariffs are established in the Copyright Act based on those criteria. For example, a place that holds no more than 100 people, plays copyright music more than six months a year for between four and seven days a week is due to pay $1,147.38 per week, say the claim statements. For every additional capacity increase of 20 people, the fees increase 10 per cent. Gilles Daigle, SOCAN’s general counsel for legal services, said in an emailed statement that more than 100,000 organizations and businesses that use music are licensed with SOCAN -- a figure that increases every year, he said. When asked whether there has been an increase in legal activity recently, he said their legal pursuits are against those who “consistently and repeatedly refuse to pay” for licenses, but the suits “have not intentionally changed in recent months.” Daigle said delinquents often settle once they are made aware of a legal action. SOCAN deals with performing and mechanical rights royalties for songwriters, composers, music publishers and visual artists, while Re:Sound handles sound recordings for artists and record companies. The lawsuits come during a period in which SOCAN “brought in and paid out record royalties to more members than ever, with combined domestic and international collections rising above 2017 figures by at least 11 per cent,” stated a late February press release highlighting its preliminary 2018 results. It said the “commitment” to royalty payments by Canadian music-using businesses is “gaining strength.” Total 2018 international royalties -- its top revenue source of which all goes to its members -- were estimated to be at least $87 million, which is 15 per cent more than 2017 results, it said. It added it collected a record $374 million in revenues, $315-million of which went to its members. It made domestic revenues of $282 million, an increase of 25 per cent since 2013. SOCAN, whose membership is composed of nearly 160,000 songwriters, composers and music publishers, has been involved in at least 250 court-related matters -- including suing public establishments -- since 2000, according to the federal court registry. Over 130 have come since 2015. The latest SOCAN suit came six days before the Liberal government last week tabled its final budget before the October election, which earmarks $20 million over two years to the Canada Music Fund, effective immediately, to bolster “support for the production, promotion and distribution of Canadian music” and “address some of the challenges faced by Canadian musicians in the digital era.” The Canadian music industry had previously raised concern with what it calls the “value gap,” or the difference between a content’s value and the revenues generated from it. Part of what informs that argument is the shift to digital distribution platforms, such as Spotify AB, which groups such as Music Canada and the Alliance of Canadian Cinema, Television and Radio Artistics (ACTRA) have said are widening that gap. “In the digital era, it’s more important than ever that our legislation ensures that performers are fairly compensated for the value they create,” ACTRA said last year before a House industry committee studying copyright reform. The group asked for the government to repeal a rule that says radio stations don’t have to pay royalties on their first $1.25 million in advertising revenue. But in its preliminary 2018 report, SOCAN predicted revenue from internet-based licensed music in 2018 would increase 27 per cent to $62 million compared to $49 million collected in 2017. Despite that, they said the value gap still exists. "While overall revenues from digitally-delivered performances of music continue to climb, music creators and publishers on average are yet to see earnings commensurate with the value that their work brings to these online corporations," SOCAN CEO Eric Baptiste said in the press release. Earlier this year, Michelle Baily, Re:Sound vice-president of people, planning and strategy told The Wire Report that the organization takes measures to reach businesses to pitch licenses to them. However, in some cases, these establishments will ignore them. Even after filing a suit, she said the organization would continue to try to work things out. Re:Sound has been involved in at least 40 legal actions since 2009, according to the court docket. While Re:Sound and SOCAN pursue legal actions separately of each other, they have worked together on a pilot project for educating and obtaining license fees for some establishments in Ontario, Daigle said, adding they are working on more ways to work together. “Once they understand that their licenses go to those who created and own the rights to the music, they are almost always fine with completing their licensing requirement,” Daigle said of the value of music to the businesses. “Similar to any licensor or supplier that administers or supplies something of value to a business, those that consistently refuse to pay risk legal action.” — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Music orgs suing public establishments to recover royalties

Broadcast | March 28, 2019

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Music orgs suing public establishments to recover royalties

Broadcast | March 28, 2019

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Canadian media companies sue OpenAI for copyright infringement, could cost $322 billion

Coordinated effort is ‘essential’ in tackling AI policy issues, says Canadian Digital Regulators Forum

Government working with AI researcher Mila on governing use of cultural content

Copyright Board joins Canadian Digital Regulators Forum

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us