Canadian Labels See Bump in Royalties Following New Collection Society Efficiencies

Roberto Machado Noa/LightRocket via Getty Images
The city of Toronto photographed on July 20, 2015.

Better usage of data and the formation of a single-repertoire database by collection societies CONNECT Music Licensing and Re:Sound Music Licensing has resulted in an additional $2 million CAD ($1.5M USD) in royalties for Canadian music labels.

"In an environment of reduced sales of music and scrutiny of every single penny of potential earnings, we are thrilled that this project has increased the royalties for our rights holders by millions of dollars," Graham Henderson, president of CONNECT Music Licensing, said in a statement. "We strive for efficiency, transparency and innovation, and together with our partner, Re:Sound, are proudly leading efforts to increase the efficiency of collective licensing in Canada and put more money directly in the pockets of rights holders."

The efficiency and data improvement project in Canada by these two collection societies has also ensured both accelerated and additional royalties for rights holders.

In the U.S., the Copyright Office recently made it possible to file compulsory licenses digitally, which will lower the bureaucratic burden on several different stakeholders and likely result in some saved money on this side of North America. 

Say You Want a Revolution? U.S. Copyright Office Modernizes Key Part of Digital Licensing

The changes -- resulting in a 28 percent decrease in administration costs -- produced $1 million in accelerated funds, which started getting distributed this week to labels ranging from majors to artist-owned imprints and independents, and another $1.2 million in efficiencies that produce ongoing annual cost savings. Another $1 million is also available to performers signed up through Re:Sound's member orgs ACTRA, MROC and ARTISTI.

According to the press release, "This is the result of a June 16, 2016, announcement that rights holders represented by CONNECT would start receiving their neighbouring rights and private copying royalties directly from Re:Sound, the not-for-profit organisation mandated under the Copyright Act to collect these royalty streams."

"The increased royalties are particularly notable as they result from our drive to improve royalty collection in line with international best practices, as opposed to adding revenues from a new music service or higher tariff award from the Copyright Board," said Henderson. "Organizations like CONNECT and Re:Sound exist only to serve rights holders, and today we have delivered on that promise."

Billboard was told by CONNECT that the additional money was collected by these key changes:

1. Data improvements that have significantly reduced the number of tracks that had insufficient information to distribute on. Because of all that clean up, we're able to immediately pay out an extra $1 million to labels and $1 million to performers, that otherwise would have had to be held pending receipt of better data.

2. The collapsing of a two-tier distribution system (money going from Re:Sound to Connect and then to the labels) and the integration of Connect and Re:Sound data in one single database will mean $1.2 million in annual savings to Connect's labels, coming from the elimination of duplication in processes, and the streamlining of data processes.

3. Distribution timelines have been accelerated by 1-6 months, depending on the tariff. Having all the data in one system allows Re:Sound to process distributions faster.