Musicians win bigger piece of radio ad revenue

COPYRIGHT

Musical artists win bigger piece of radio ad revenue

Grant Robertson
GlobeAndMail.com
February 23, 2008

The federal agency that governs copyrights in Canada has ruled that musicians, composers and songwriters are entitled to an increased share of the ad revenue generated by radio stations, stemming from a decision two years ago that bumped up those rates.

In a ruling issued yesterday, Copyright Board Canada upheld a decision from 2005 that requires radio broadcasters to pay out 3.2 per cent of advertising revenue on the first $125-million they bring in to the Society of Composers, Authors and Music Publishers of Canada (SOCAN).

Broadcasters must pay SOCAN 4.4 per cent on any ad revenue above that number.

The ruling also sets a $100 rate to be paid out by each broadcaster to another artists' group, the Neighbouring Rights Collective of Canada (NRCC), plus 2.1 per cent of any advertising revenue above $125-million.

The Canadian Association of Broadcasters, which represents some of the biggest radio companies in Canada, challenged the 2005 decision. But in a decision yesterday, the Board maintained the rates it set then, which increased the amounts from a previous ruling in the late 1980s.

"The Board believes, as it did in 2005, that the value of music to broadcasters has increased significantly since 1987," the Copyright Board said in a statement, referring to the growing advertising revenues radio stations have been making in Canada.

Commercial radio made $1.34-billion in 2005, the ruling said.

The rates are expected to generate $48.5-million for SOCAN and $15.9-million for the NRCC, based on data used when the original decision was made. That represents an increase of $8.8-million for SOCAN and $4.9-million for NRCC, compared to the last rate increase.

An official with SOCAN could not be reached for comment yesterday. Glenn O'Farrell, president of the broadcasters association said he was hoping to see the rates reduced, but noted that most broadcasters have been budgeting for payments based on the 2005 decision, so they won't be hit with an unexpected bill.

Opening up the debate again meant the rates could also have potentially been increased as well if new arguments were made by the artists' groups.

"Were we hoping for a reduction? Clearly," Mr. O'Farrell said. "The good news is they didn't increase it, so the copyright payments remain the same, so there's no material impact on the industry."

http://www.theglobeandmail.com/servlet/story/LAC.20080223.RCOPYRIGHT23/TPStory/Business