Canada's Copyright Board ruled Wednesday on the decade long battle over the royalty rates for online downloading and streaming to be paid to the Society of Society of Composers, Authors and Music Publishers (Socan).
In a ruling that will likely not satisfy Socan or Canada's record companies, the board set royalty rates from the period of 1996 to 2006 at 3.4% for permanent downloads, minus a 10% discount. Coupled with the 7.9% rate collected on behalf of the Canadian Musical Reproduction Rights Agency Ltd. and the Quebec-based Society for the Reproduction Rights of Authors, Composers and Publishers, the royalty rate for downloads in Canada for the period would be 11%.
The Canadian Record Industry Association had argued for a much lower rate - effectively around 0.1%, in order to put the royalty rate in line with other nations like the United Kingdom (8%), Japan (7.7%) and the U.S. (9.1%), as well as the royalty rate on physical product in Canada. Socan had argued for a 25% rate at the start of the hearings, but observers said by the end of presentations it appeared the organization would be satisfied with a much lower amount.
CRIA also argued that legal downloading services could be hurt by a high royalty rate. In its report, the Copyright Board discounted this notion, saying the profitability of download services "is unlikely to be affected by an increased payment made by the retailers on account of the communication right."
Due to a backlog at the Copyright Board, the royalty rates for the current year and 2008 have yet to be set. Music industry sources told Billboard.biz an appeal of the decision could be forthcoming, but all sides in the fight are still trying to digest the lengthy ruling.
- Canadian Musical Reproduction Rights Agency Ltd.,
- Canada's Copyright Board,
- Canadian Record Industry Association,
- Copyright Board,
- Society for the Reproduction Rights of Authors, Composers and Publishers,
- Society of Composers, Authors and Music Publishers,
- Society of Composers,
- Copyright collection societies,
- Canadian copyright law