The Canadian Copyright Board issued a royalty decision dealing with satellite radio today, concluding these services should pay 6.2% of revenues for the use of music.

"This is lower than the total equivalent rates of 7.1% set by the board, that conventional commercial radio stations pay to obtain similar licences", said Claude Majeau, secretary general of the Copyright Board in Ottawa.

He added that U.S. satellite radio stations pay 6.5% of revenue to broadcast sound recordings, a rate that will increase by 1.5% in three years. There are currently two Canadian satellite radio providers under license – Sirius Satellite Radio and Canadian Satellite Radio, which operates under XM Canada.

Three copyright collective societies had filed proposed tariffs for the use of their repertoire by the satellite radio services, including the Society of Composers, Authors and Music Publishers of Canada (SOCAN), the Neighbouring Rights Collective of Canada (NRCC) and CMRRA/SODRAC Inc. (CSI). The decision deals with all three applications.

The tariff rates are set at 4.26% of total revenues in respect of the communication of musical works collected by SOCAN, and at 1.18% for the communication of sound recordings, collected by the NRCC. CSI collects 0.09% for reproduction rights in the course of programming, 1.18% for reproductions "when a receiver has extended buffer and replay capabilities," and 2.81% when the receiver has MP3-like capabilities. However, the board noted there are few receivers with advanced capabilities.

The board also offered the satellite radio companies a break in royalty rates given the difficulty they've had in establishing themselves, as well as "the high front end costs they had to incur." That led to a discount of 25% for the years 2005 to 2007 and 10% for 2008 and 2009. The applicable rate for 2009 is 5.6%. The board expects $1 million in royalties to be generated by the tariff for the 2006 year, adding that this year could see "revenues multiplied by a factor of 10 compared to 2006."