President’s Message: It’s all about fairness

Story by Stan Meissner | Friday March 27th, 2015

It’s really all about fairness.

You’d have to be living under a rock not to be hearing the raging debate about royalty rates and the value of music in the rapidly evolving digital and online music world. The bottom line is, “What is fair?” Obviously, there are many important links in the musical value chain, and in a respectful ecosystem all parties need to fairly share in whatever revenue is being generated. Without songs and performers, record labels and music services that distribute and facilitate access to music, our world would be a silent and desolate place.

The importance of music in our evolution and civilization traces back to the dawn of mankind. Simply, there was music long before there was a music business, and there will still be music long after the current methods of its dissemination will be seen as archaic and primitive.

Just as music and the music industry have survived these changes, so shall we, by innovation and reinvention.

The business as we know it has evolved generally in the last hundred years or so, although performing rights and music publishing started as far back as the late 1700s. Throughout the 20th Century, business models took shape and the division of roles between creators, performers, publishers, radio and record companies evolved into the landscape we came to know, for better or worse.  But the horizon looks hazy and unrecognizable, just as it did with every technological shift in our industry, from piano rolls to recordings, from radio days to the internet age.

Just as music and the music industry have survived these changes, so shall we, by innovation and reinvention, building on the strength of systems that seemed to work in the past, and finding new ways that can hopefully treat all rights holders fairly, transparently and respectfully.

Many of these new digital music services, while they have yet to realize significant profits (or any profits at all), still seem to generate millions in shareholder and equity value, as well as for their senior executives, while feeding very little back into the music value chain for creators. Likewise, large internet service providers, through whom music and other intellectual property appears to flow freely – and to the great benefit of their bottom line – also contribute nothing back.

Clearly, the current situation needs to change. At a recent CIAM (The International Council of Creators of Music) Congress in Nashville, a report was released entitled Fair Compensation for Music Creators in the Digital Age, commissioned by Music Creators North America (MCNA) and other international creator alliances with the support of SOCAN. The report, part of the Fair Trade Music initiative, was immediately endorsed by CISAC (International Confederation of Societies of Authors and Composers).  Primary findings state that up to 80 percent of revenues generated by streaming services should be transparently paid to the rights holders, and the report also recommends a 50-50 split between compositions and recordings. The study points to a strong and clear standard, a “True North,” in trying to define fairness.

As the debate continues, perhaps all parties need to grab their compasses.

Speaking Out: Turning the page from print to online

Story by Eric Baptiste | Friday March 27th, 2015

From now on, Words + Music will be an online-only magazine.

We’re turning the page completely from print to our more flexible, timely and fulfilling digital edition, bringing with it even more benefits for our members, licensed businesses and anyone interested in accessing interesting, high-quality content about the increasingly exciting and successful Canadian music scene.

The online-only edition will be more open and available than ever before, with opportunities for readers to comment on each story. They’ll also benefit from instant, worldwide distribution: the online edition is available and easily accessible to anybody in the world with an internet connection, on any platform (smartphone, tablet, laptop, home computer, etc.), anytime, anywhere.

You’ll be able to read much more timely stories, posted when ready.

The ratio of those SOCAN members desiring coverage in Words + Music to available editorial space in the print magazine was about 20-to-one, so sometimes even SOCAN members who were clearly worthy of coverage were unable to receive it. The advent of the online-only edition, with no space limitations, will allow us to not only cover more of these laudable SOCAN members, but also expand our coverage to include music users Licensed to Play by SOCAN. We’ll simply be able to bring you more information.

With the quarterly print edition, you had to wait three months before reading about your fellow SOCAN members, which could render some of the magazine content a little dated. In the online edition, you’ll be able to read much more timely stories, posted when ready, so that we’re even more current and relevant to the passing scene.

Our costs for the printed magazine, both the English and French edition (Paroles & Musique) – which include design, printing, postage, and other expenses – were very high (several hundred thousand dollars), and increasing every year. Except for contributor and photographer fees – which, while among the best in the Canadian music industry, comprise a very small portion of those costs – that money can now be put into our members’ hands instead.

The cost to the environment was far greater with the print edition as well. In 2013 alone, we printed about 1.6-million pages, sacrificing a significant number of trees. Online, we don’t have to destroy any of them, and we avoid the environmental impact of running a printing press to create more than 50,000 copies and ship them across our vast country.

For the past two decades, SOCAN has always embraced the digital world to better reach our members, in new ways, wherever they are. Our social media numbers more than 30,000 followers; our website (at socan.ca), digital magazine, (at socanmusic.ca), SOCAN blog (at socanblog.ca), and online annual report (at socanannualreport.ca) bring more news and information to more readers and viewers than  ever; and we’ve also introduced mobile versions of our website and online magazine. Moving the magazine completely to online is just the latest step in our necessary adaptation to technological change. We expect that Words + Music online, which will be redesigned in 2015, will provide an excellent end-user experience.

There are those who, understandably, feel sentimental about holding a paper magazine in their hands. But paper is slow in reporting, expensive to produce, limited in editorial space, restricted in distribution, and environmentally wasteful. It only makes good sense to move exclusively into the online world, so that we can commit more time and resources into making the digital version great.

We’re closing the book on print, but the story continues, even better, at socanmagazine.ca. Thanks for being a part of it, as we turn the page to the next chapter.

Photo by Stuart Miles

President’s Message : Recent Copyright Board, DOJ activities

Story by Stan Meissner | Wednesday October 22nd, 2014

While the summer was hopefully a time to relax and take some time off, certainly the Canadian Copyright Board and the U.S. Department of Justice (DOJ) have been busy working on activities that affect us as songwriters and publishers in the performing rights organization world.

In Canada, the Copyright Board issued two rulings on Tariff 22.D regarding audio-visual works on the Internet, both of which have very positive impacts for SOCAN.  In the first ruling for 22.D.1, regarding AV webcasts, tariffs were confirmed at 1.7% for 2007-2010 and 1.9% for 2011 to 2013. These percentages are based on both per program and subscription fees, as well as advertising revenues, and are subject to minimum fees.

The Board also agreed with SOCAN’s position that in the case of Netflix free trial subscriptions, royalties are payable. Another big positive in the ruling for SOCAN is that given rates have been confirmed going back to 2007, early estimates suggest that the retroactive royalties these tariffs may generate are as much as $10 million. The Tariff Licensing and Distributions committee of the SOCAN board will be discussing the mechanisms to facilitate these royalty payments in the very near future.

With regard to the second ruling, Tariff 22.D.2 for user-generated content on AV sites, the Copyright Board approved the agreement between SOCAN and YouTube at similar rates as those referred to above, applying to the amounts generated by visits from Canadian IP addresses to YouTube pages with advertising revenues. In all cases, these terms will remain in force on an interim basis, until tariff rates and terms are approved for 2014 and subsequent years. These rulings continue to chart a way forward for SOCAN in the evolving digital world.

In other rulings for Tariff 4.A (Pop Concerts) for the years 2009-2014, the approved tariff allows for greater certainty in the terms and conditions between SOCAN and the users as to the royalties and administration requirements.  As well, Tariff 4.B confirmed the agreement between SOCAN and Orchestras Canada, and includes increases in rates for the years 2013 and 2014.

In the U.S., things are a bit different as ASCAP and BMI have to work within the decades-old consent decrees, set by the DOJ, which are in place to attempt to protect the market from potential anti-trust concerns.

These consent decrees and recent court decisions have been creating problems for publishers and the PROs, with regard to publishers’ abilities to withdraw certain rights and negotiate direct deals, and the rate courts insisting on “all or nothing” relationships between the publishers and the PROs.  The DOJ is looking into amending the consent decrees and both PROs have submitted formal comments, seeking greater flexibility.

These developments will likely have progressed further by the time you read this, but suffice to say that we are witnessing the evolution of the PRO landscape and it likely will be unrecognizable within the next few years. The times, they are a-changing!  Stay tuned.