Canada Approves New Music Tariffs; Weddings Cost Double If You Dance

Music Industry

from the footloose? dept

The Copyright Board of Canada, which reviews copyright tariffs for various collection societies (like ASCAP and BMI in America, which collect performance licensing fees from venues) has just approved a new set of fees to cover recorded music at a bunch of different live events. Karaoke bars, conventions, parades, weddings and several other classes of event—which already pay fees to SOCAN, which represents songwriters—will now begin paying additional tariffs to collection society Re:Sound, which represents recording artists and labels.

We’ve talked a lot about the problems with the whole idea of the collection society structure in the past, especially the fact that most societies are constantly pushing for higher fees and trying to extract money for ridiculous things, even though they have a poor track record of actually redistributing the money they collect to the artists they supposedly represent. But of course, the people behind the tariff talk it up as a boon for small musicians:

“We are trying to establish tariffs for the remuneration of everybody involved in the music — everybody that has some rights to receive some remuneration,” said Gilles McDougall of the Copyright Association of Canada, adding that the tarriff will likely result in a few million dollars a year for performers.

Re:Sound spokesman Matthew Fortier said the money collected will make a big difference to small operations.

“Sometimes you think of the larger artists or record labels, but most often it goes to small, struggling artists and record labels — we have thousands signed up with us,” he said.

But as Howard Knopf points out, small artists are the last ones to get anything out of a scheme like this. Megastars and their labels can make money—but even that pales in comparison to the real beneficiaries of the tariff:

Sadly, very little of this money through gets to the artists that need it the most. This is because the copyright collective system tracks and rewards commercial success. Celine Dion, U2, Lady Gaga and their record and publishing companies do very well by the this system but emerging creators see very little of this money. The ones who really and consistently benefit the most are those who run the collectives, those who are consultants to the collectives, and the lawyers who punctually pursue new and higher Copyright Board tariffs using money raised from the previous tariffs and paid for ultimately by the Canadian public. Many if not most Copyright Board hearings generate millions of dollars in legal fees in order to generate average annual payments to creators that are typically much less than a junior lawyer’s hourly rate.

As with many such licensing schemes, the specifics of the fees seem almost completely arbitrary. Karaoke bars pay a rate based on nights-per-week, parades pay a different rate per-float, and weddings pay a third rate that for some insane reason gets doubled if the wedding involves dancing.

Some people will look at the fees themselves, which in any singular instance only generally add up to a few hundred dollars at most, and ask what the big deal is. But that’s ignoring the big picture: Canada loves copyright tariffs, and each one serves to shift massive amounts of wealth around, often with little justification and no way of ensuring that the money is being properly distributed. And we just keep piling new tariffs on top of old ones, with no clear idea of how effective they are—except at funnelling money to the collection societies:

It’s true that most people do not tend to get married very often. And many weddings cost $25,000 or more. So, some may not be too concerned about the macro or even microeconomic aspects this particular tariff item. It won’t likely harm Canada’s economy overall or even the institution of marriage.

But these little tariffs add up. The little tariffs such as $0.29 for a blank CD or $5.16 per year for each K-12 student, or $253.45 for a wedding soon add up to about $500 million a year in Canada. One is tempted to say that “A half billion here, a half billion there, pretty soon, you’re talking real money.” Copyright Board tariffs siphon huge sums out of the educational system, the broadcasting and telecom industries, businesses of all kinds that use blank media for ordinary data storage and transfer purposes, etc.

Now we can add this one to the bloated list. And you can guarantee it won’t be long before Re:Sound is back before the Copyright Board, pushing to raise the fees and expand the tariff to new classes of events and venues. Copyright tariffs rarely decrease—even when they absolutely should.

Filed Under: canada, collection society, copyright board, licensing, tariffs
Companies: ascap, bmi, re:sound, socan