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Canadian Proposed Podcasting Royalty Fight Not Over
The Copyright Board of Canada (the “Board”) issued a new decision on October 24, 2008 in regards to Tariff 22 (the “Tariff”) and the prospect of royalty collection from thousands of websites and web-related broadcasters in Canada. The Tariff, which targets Internet-based radio stations, electronic gaming sites and non-commercial radio station webcasts, establishes royalty rates from 5.3 per cent of revenues for deemed high users of music to 0.8 per cent of revenues for deemed low users of music.
The Society of Composers, Authors and Music Publisher (“SOCAN”), the driving force behind collecting music royalties in Canada, argued that the Tariff should also include the broad range of websites that make use of music, but not as their main activity. Such websites include social networking sites and other commercial sites that may have background music. Ultimately, the Board rejected imposing the Tariff on such sites because it would be disruptive and unfair to set a tariff that would apply to hundreds of thousands of users whose use of music is very modest, and because of the absence of reliable evidence on which to base a tariff.
However, the Board hinted that it may consider switching from user-based tariffs to use-based tariffs. This would mean that the Board would be entitled to collect royalties based on the number of times a song is played rather than on the category of user.
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