ARCHIVED — Vol. 147, No. 18 — May 4, 2013

COPYRIGHT BOARD

FILE: Reproduction of Musical Works

Proposed Statement of Royalties to Be Collected for the Reproduction of Musical Works in Cinematographic Works for Theatrical Exhibition or Private Use and for the Reproduction of Musical Works in a Music Video, in Canada, by Online Music Services

In accordance with section 70.14 of the Copyright Act, the Copyright Board hereby publishes the statement of proposed royalties filed by the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) on March 28, 2013, with respect to royalties it proposes to collect, effective on January 1, 2014, for the reproduction of musical works embedded into cinematographic works for the purpose of distribution of copies of the cinematographic works for private use or theatrical exhibition for the year 2014 (Tariff No. 5) and for the reproduction of musical works embedded in a music video, in Canada, by online music services in 2014 (Tariff No. 6).

In accordance with the provisions of the same section, the Board hereby gives notice that prospective users or their representatives who wish to object to the statement may file written objections with the Board, at the address indicated below, within 60 days of the publication hereof, that is no later than July 3, 2013.

Ottawa, May 4, 2013

GILLES MCDOUGALL
Secretary General
56 Sparks Street, Suite 800
Ottawa, Ontario
K1A 0C9
613-952-8624 (telephone)
613-952-8630 (fax)
gilles.mcdougall@cb-cda.gc.ca (email)

PROPOSED STATEMENT OF ROYALTIES TO BE COLLECTED BY SODRAC FOR THE REPRODUCTION OF MUSICAL WORKS EMBEDDED INTO CINEMATOGRAPHIC WORKS FOR THE PURPOSE OF DISTRIBUTION OF COPIES OF THE CINEMATOGRAPHIC WORKS FOR PRIVATE USE OR THEATRICAL EXHIBITION FOR THE YEAR 2014

Short Title

1. This tariff may be cited as SODRAC Tariff No. 5, Reproduction of Musical Works in Cinematographic Works for Theatrical Exhibition or Private Use, 2014.

Definitions

2. In this tariff,

“audiovisual work” means a movie, television program or other cinematographic work irrespective of its initial intended use, but excludes a work where the main content is music such as a concert, variety show, video-clip or workout show; (« oeuvre audiovisuelle »)

“repertoire” means the musical works for which SODRAC is entitled to grant a licence pursuant to section 3; (« répertoire »)

“semester” means from January 1 to June 30 and from July 1 to December 31; (« semestre »)

“SODRAC” means the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc. and SODRAC 2003 Inc., acting jointly and severally. (« SODRAC »)

Application

3. A distributor that complies with this tariff shall be entitled to reproduce onto a copy of an audiovisual work a musical work of the repertoire already embedded into that audiovisual work, or to authorize such reproduction,

  • (a) for the purpose of selling or renting DVDs or other physical copies of the audiovisual work, with or without additional content, to consumers for private use; and

  • (b) in connection with the public exhibition of the audiovisual work or of a trailer of the audiovisual work.

Restrictions

4. (1) This tariff only authorizes the reproduction of a musical work in association with the same images with which the musical work was embedded in the audiovisual work.

(2) This tariff does not apply to downloading, streaming or video on demand.

Royalties

5. (1) For reproductions made pursuant to paragraph 3(a), a distributor shall pay to SODRAC, for each minute of music requiring a licence from SODRAC, a royalty calculated pursuant to the following table:

Rate per minute, per copy of audiovisual work sold

For the first 15 minutes

$0.0065 per minute

For the next 15 minutes

$0.0125 per minute

Thereafter

$0.0200 per minute

(2) Where SODRAC administers only part of the rights in a musical work, the applicable rate is the relevant rate multiplied by SODRAC’s share in the musical work.

(3) Notwithstanding subsection (1), a distributor is entitled to provide, royalty-free, one promotional copy for each 9 copies of an audiovisual work sold, up to a total of 300.

6. For reproductions made pursuant to paragraph 3(b), a distributor shall pay to SODRAC $100 per year.

7. All royalties payable under this tariff are exclusive of any federal, provincial or other governmental taxes or levies of any kind.

Reporting and Payment Requirements

8. (1) No later than 30 days after the end of the semester during which a distributor first delivers an audiovisual work directly or indirectly for sale or rental to consumers for private use, the distributor shall provide to SODRAC, with respect to that audiovisual work,

  • (a) the name, address, telephone number, fax number and email address of the distributor;

  • (b) a physical or digital copy of the work and of its cover;

  • (c) the reference number or numbers assigned to the audiovisual work by the distributor; and

  • (d) if available, the musical cue sheet for the audiovisual work.

(2) Using the information received pursuant to subsection (1) and any other information at its disposal, SODRAC shall make reasonable efforts to determine the information required to calculate and distribute the royalties payable pursuant to section 5.

(3) A distributor that does not supply a musical cue sheet pursuant to paragraph (1)(d) shall collaborate with SODRAC if SODRAC attempts to secure the cue sheet from anyone, including the producer of the audiovisual work, other than another collective society. If SODRAC does not receive the cue sheet despite such collaboration, the distributor shall provide to SODRAC, if available,

  • (a) the title or titles under which the audiovisual work is offered by the distributor;

  • (b) the original title;

  • (c) if the audiovisual work is part of a series, the number or title of the episode;

  • (d) the ISAN code;

  • (e) the name of the producer or, if not known, the name of the person from whom the distributor secured the distribution rights;

  • (f) the title of each musical work embedded into the audiovisual work;

  • (g) the name of the author and composer of each musical work;

  • (h) the duration of each musical work; and

  • (i) the type of use of each musical work (background, feature, theme).

(4) A distributor shall provide the information set out in subsection (1) or (3) with respect to each otherwise identical audiovisual work if the musical content in each such work is different.

(5) If the information supplied pursuant to subsections (1), (3) or (4) does not allow SODRAC to reasonably proceed to the distribution of royalties, SODRAC, after first conducting its own reasonable search, may further inquire from the distributor who will make reasonable efforts to supply any further, relevant information to assist SODRAC in its royalty distribution, including

  • (a) any alternate title, whether in the original language or not;

  • (b) the country, year and type of production;

  • (c) the theatrical or other release date; and

  • (d) the name of the director.

9. (1) As soon as possible after receiving the information set out in section 8, SODRAC shall notify the distributor of those audiovisual works for which a SODRAC licence is required. With respect to such works, SODRAC shall also provide to the distributor a report setting out

  • (a) each musical work embedded in the audiovisual work;

  • (b) the duration of each musical work;

  • (c) for each musical work requiring a SODRAC licence, an indication to that effect;

  • (d) if SODRAC administers only part of the rights in a musical work, the fraction of rights SODRAC administers; and

  • (e) the amount of royalties payable to SODRAC for each copy of the audiovisual work sold.

(2) At least once each semester, SODRAC shall provide a new report with respect to audiovisual works for which the information set out in paragraphs (1)(c) or (d) has changed.

10. (1) No later than 60 days after the end of a semester, a distributor shall provide to SODRAC, with respect to each audiovisual work that is mentioned in a report received pursuant to section 9 before the end of the semester and a copy of which was sold during the semester, the following information relating to that semester:

  • (a) the reference number or numbers assigned to it by the distributor;

  • (b) the title or titles under which it is offered by the distributor;

  • (c) if already supplied, the ISAN code;

  • (d) the number of copies sold;

  • (e) the number of promotional copies delivered; and

  • (f) if the audiovisual work was withdrawn from the catalogue during the semester, a mention to this effect.

(2) A distributor shall forward to SODRAC the royalties payable in respect of a copy at the same time as it sends the information set out in subsection (1) in respect of that copy.

(3) Royalties payable pursuant to section 6 are due no later than on January 31 of the relevant year.

Repertoire Disputes

11. (1) A distributor that disputes the indication in a report received pursuant to section 9 that a musical work requires a SODRAC licence shall provide to SODRAC the information on which the distributor relies to conclude that the licence is not required, unless the information was provided earlier.

(2) A distributor that disputes the indication more than 20 days after receiving a report pursuant to section 9 is not entitled to interest on the amounts owed to it.

Accounts and Records

12. (1) A distributor and SODRAC shall keep and preserve, for a period of four years after the end of the semester to which they relate, records from which the information set out in section 8 to 10 can be ascertained.

(2) SODRAC may audit these records at any time during the period set out in subsection (1) on notice of 10 business days and during normal business hours.

(3) SODRAC shall, upon receipt, supply to the distributor a copy of the audit report.

(4) If an audit discloses that royalties have been understated in any semester by more than 10 per cent, the distributor shall pay the reasonable costs of the audit within 30 days of the demand for such payment.

Confidentiality

13. (1) Subject to subsections (2) and (3), SODRAC shall treat in confidence information received from a distributor pursuant to this tariff, unless the distributor who supplied the information consents in writing to the information being treated otherwise.

(2) SODRAC may share information referred to in subsection (1)

  • (a) with the Copyright Board;

  • (b) in connection with proceedings before the Copyright Board, if SODRAC has first provided a reasonable opportunity for the distributor providing the information to request a confidentiality order;

  • (c) to the extent required to effect the distribution of royalties, with a collective society or with a royalty claimant; or

  • (d) if ordered by law.

(3) Subsection (1) does not apply to information that is publicly available, or to information obtained from someone other than a distributor and who is not under an apparent duty of confidentiality to that distributor.

Adjustments

14. Adjustments in the amount of royalties owed (including excess payments), as a result of the discovery of an error or otherwise, shall be made on the date the next royalty payment is due.

Interests on Late Payments

15. (1) Subject to subsection (4), any amount not received by the due date shall bear interest from that date until the date the amount is received.

(2) Any overpayment resulting from an error or omission on the part of SODRAC shall bear interest from the date of the overpayment until the overpayment is refunded.

(3) For the purposes of this section, if a report provided pursuant to section 8 is filed late, no account is taken of the time between the date the report should have been filed and the date it is filed for the purposes of determining whether the corresponding report provided pursuant to section 9 was received before the end of a semester for the purposes of section 10.

(4) Any amount owing by a distributor as a result of an error or omission on the part of SODRAC shall not bear interest until 30 days after SODRAC has corrected the error or omission.

(5) Interest shall be calculated daily, at a rate equal to one per cent above the Bank Rate effective on the last day of the previous month (as published by the Bank of Canada). Interest shall not compound.

Delivery of Notices and Payments

16. (1) Anything that a distributor sends to SODRAC pursuant to section 8 or 10 shall be sent by email to audiovisual@sodrac.ca. Anything else that a distributor sends to SODRAC shall be sent to 1470 Peel Street, Tower B, Suite 1010, Montréal, Quebec H3A 1T1, c/o Director, Licensing and Legal Services, email: mlavallee@sodrac.ca, fax number 514-845-3401, or to any other address of which the distributor has been notified in writing.

(2) Anything that SODRAC sends to a distributor shall be sent to the last address, fax number or email address of which SODRAC has been notified in writing.

17. (1) Subject to subsection (2), a notice may be delivered by hand, by postage-paid mail, by fax, by email or by File Transfer Protocol (FTP).

(2) To the extent possible, information that a distributor provides pursuant to section 8 or 10 shall be delivered electronically, in Excel format or in any other format agreed upon by SODRAC and the distributor. Each type of information shall be provided in a separate field.

(3) A notice or payment mailed in Canada shall be presumed to have been received four business days after the day it was mailed.

(4) A notice sent by fax, by email or by FTP shall be presumed to have been received the day it is transmitted.

Termination

18. (1) SODRAC may, upon a 30-day notice in writing, terminate the licence of a distributor who does not comply with this tariff.

(2) Upon termination of the licence, a distributor shall immediately withdraw from the market all copies it owns that contain a work of the repertoire.

Term

19. This Tariff comes into force on January 1, 2014, and ends on December 31, 2014.

STATEMENT OF PROPOSED ROYALTIES TO BE COLLECTED BY SODRAC FOR THE REPRODUCTION OF MUSICAL WORKS EMBEDDED IN A MUSIC VIDEO, IN CANADA, BY ONLINE MUSIC SERVICES IN 2014

Short Title

1. This tariff may be cited as SODRAC Tariff No. 6, Online Music Services, Music Videos, 2014.

Definitions

2. In this tariff,

“bundle” means two or more digital files offered as a single product, where at least one file is a permanent download; (« ensemble »)

“download” means a file intended to be copied onto an end-user’s local storage medium or device; (« téléchargement »)

“file” except in the definition of “bundle,” means a digital file of a music video; (« fichier »)

“identifier” means the unique identifier an online music service assigns to a file or bundle; (« identificateur »)

“limited download” means a download that uses technology that causes the file to become unusable when a subscription ends; (« téléchargement limité »)

“music video” means an audiovisual representation of a musical work; (« vidéo de musique »)

“online music service” means a service that offers and delivers permanent downloads to end-users; (« service de musique en ligne »)

“permanent download” means a download other than a limited download; (« téléchargement permanent »)

“quarter” means from January to March, from April to June, from July to September and from October to December; (« trimestre »)

“repertoire” means the musical works for which SODRAC is entitled to grant a licence pursuant to section 3; (« répertoire »)

“SODRAC” means SODRAC 2003 Inc. and Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc.; (« SODRAC »)

“stream” means a file that is intended to be copied onto a local storage medium or device only to the extent required to allow listening to the file at substantially the same time as when the file is transmitted. (« transmission »)

Application

3. (1) This tariff entitles an online music service that complies with this tariff, and its authorized distributors,

  • (a) to reproduce all or part of a musical work in the repertoire already embedded in a music video for the purposes of transmitting it in a file as a permanent download to end-users in Canada via the Internet or another similar computer network, including by wireless transmission;

  • (b) to authorize a person to reproduce the musical work already embedded in a music video for the purpose of delivering to the service a file that can then be reproduced and transmitted pursuant to paragraph (a); and

  • (c) to authorize end-users in Canada to further reproduce the musical work already embedded in the music video for their own private use,

in connection with the operation of the service.

(2) For greater certainty, this tariff does not apply to programs sold online, directly or through an online music service, by the Canadian Broadcasting Corporation/Société Radio-Canada.

4. (1) This tariff does not authorize the reproduction of a work in a medley, for the purpose of creating a mashup, for use as a sample or in association with a product, service, cause or institution.

(2) This tariff does not entitle the owner of the copyright in a sound recording of a musical work to authorize the reproduction of that work.

(3) This tariff does not authorize the production of a music video or the synchronization of a musical work in a music video. It authorizes only the online distribution of an existing music video in which the musical work is already embedded.

Royalties

5. (1) The royalties payable for each permanent download requiring a SODRAC licence shall be 6.5 per cent of the amount paid by an end-user for the download subject to a minimum of 2.7¢ per musical work in a bundle that contains 20 or more files and 9.9¢ per musical work in all other cases.

(2) Where SODRAC does not hold all the rights in a musical work, the applicable rate shall be the relevant rate multiplied by SODRAC’s share in the musical work.

(3) Where SODRAC does not hold rights in all of the musical works embedded in the music video, the applicable rate shall be the relevant rate multiplied by the number of works in which SODRAC holds rights divided by the total number of musical works embedded in the music video, subject to the minimums provided in paragraph (1).

(4) All royalties payable under this tariff are exclusive of any federal, provincial or other governmental taxes or levies of any kind.

ADMINISTRATIVE PROVISIONS

Reporting Requirements

6. No later than the earlier of 20 days after the end of the first month during which an online music service reproduces a file requiring a SODRAC licence and the day before the service first makes such a file available to the public, the service shall provide to SODRAC the following information:

  • (a) the name of the person who operates the service, including

    • (i) the name of a corporation and a mention of its jurisdiction of incorporation,

    • (ii) the name of the proprietor of an individual proprietorship, or

    • (iii) the names of the principal officers of any other service, together with any other trade name under which the service carries on business;

  • (b) the address of its principal place of business;

  • (c) the name, address and email of the persons to be contacted for the purposes of notice, for the exchange of data and for the purposes of invoicing and payment;

  • (d) the name and address of any authorized distributor; and

  • (e) the Uniform Resource Locator (URL) of each website at or through which the service is or will be offered.

Sales Reports

7. (1) In this section, “required information” means, in respect of a file,

  • (a) its identifier;

  • (b) the title of the music video and of each musical work embedded in the music video;

  • (c) the name of each performer or group to whom the sound recording embedded in the music video is credited;

  • (d) the name of the person who released the sound recording or, if different, the name of the person who released the music video;

  • (e) if the service believes that a SODRAC licence is not required, information that establishes why the licence is not required;

    and, if available,

  • (f) the name of each author of each musical work embedded in the music video;

  • (g) the International Standard Recording Code (ISRC) assigned to the sound recording;

  • (h) the name of the music publisher associated with the musical work;

  • (i) the International Standard Musical Work Code (ISWC) assigned to the musical work;

  • (j) if the sound recording is or has been released in physical format as part of an album, the name, identifier, product catalogue number and Universal Product Code (UPC) assigned to the album, together with the associated disc and track numbers;

  • (k) the Global Release Identifier (GRid) assigned to the file and, if applicable, the GRid of the album or bundle in which the file was released;

  • (l) the running time of the file and of each musical work in minutes and seconds; and

  • (m) any alternative title used to designate the music video, musical work or sound recording.

(2) No later than 20 days after the end of each month, any online music service that is required to pay royalties pursuant to section 5 shall provide to SODRAC a report setting out, for that month,

  • (a) in relation to each file that was delivered as a permanent download:

    • (i) the required information,

    • (ii) the number of times the file was downloaded as part of a bundle, the identifier of each such bundle, the number of files included in each such bundle, the amount paid by end-users for each such bundle, the share of that amount assigned by the service to the file, and a description of the manner in which that share was assigned, and

    • (iii) the number of other permanent downloads of the file and the amounts paid by end-users for the file, including, if the file is offered as a permanent download at different prices from time to time, the number of permanent downloads delivered at each different price;

  • (b) the total amount paid by end-users for bundles;

  • (c) the total amount paid by end-users for permanent downloads; and

  • (d) the total number of permanent downloads supplied.

Calculation and Payment of Royalties

8. No later than 20 days after receiving a report pursuant to section 7 for the last month in a quarter, SODRAC shall provide to the online music service a detailed calculation of the royalties payable for that quarter for each file, along with a report setting out

  • (a) which files contain a work that it then knows to be in the repertoire;

  • (b) which files contain a work that it then knows not to be in the repertoire;

  • (c) which files contain a work that it then knows to be in the repertoire only as to a fraction of the rights, with an indication of that fraction; and

  • (d) with respect to all other files, an indication of the reason for which SODRAC is unable to provide an answer pursuant to paragraphs (a), (b) or (c).

9. Royalties shall be due no later than 30 days after an online music service receives a report pursuant to section 8.

Repertoire Disputes

10. (1) An online music service that disputes the indication that a file contains a work in the repertoire or requires a SODRAC licence shall provide to SODRAC the information that establishes why the licence is not required, unless the information was provided earlier.

(2) An online music service that disputes the indication more than 20 days after receiving a report pursuant to section 8(a) or (c) is not entitled to interest on the amounts owed to it.

Adjustments

11. Adjustments to any information provided pursuant to sections 6 to 8 or 10 shall be provided with the next report dealing with such information.

12. (1) Subject to subsection (2), adjustments in the amount of royalties owed, including excess payments, as a result of the discovery of an error or otherwise, shall be made on the date the next royalty payment is due.

(2) Any excess payment resulting from an online music service providing incorrect or incomplete information about a file shall be deducted from future amounts owed for the use of works owned by the same person as the work in that file.

Records and Audits

13. (1) An online music service shall keep and preserve, for a period of six years after the end of the month to which they relate, records from which the information set out in sections 6, 7, 10 and 11 can be readily ascertained.

(2) SODRAC may audit these records at any time during the period set out in subsection (1) on reasonable notice and during normal business hours.

(3) Subject to subsection (4), if an audit discloses that royalties due have been understated in any quarter by more than 10 per cent, the online music service shall pay the reasonable costs of the audit within 30 days of the demand for such payment.

(4) For the purposes of subsection (3), any amount owing as a result of an error or omission on the part of SODRAC shall not be taken into account.

Breach and Termination

14. (1) An online music service that fails to provide any report required by section 7 within five business days of the date on which the report is required or to pay royalties within five business days of the date on which the royalties are due is not entitled to do any of the acts described in section 3 as of the first day of the month in respect of which the report should have been provided or the quarter in respect of which the royalties should have been paid, as the case may be, and until the report is provided and the royalties and any accrued interest are paid.

(2) An online music service that fails to comply with any other provision of this tariff is not entitled to do any of the acts described in section 3 five business days after SODRAC has notified the service in writing of that failure and until the service remedies that failure.

(3) An online music service that becomes insolvent, commits an act of bankruptcy, makes an assignment for the benefit of its creditors, files for protection under the Companies Creditors Arrangement Act or other comparable legislation in another jurisdiction, winds up its affairs, ceases to carry on business, or has a receiver/manager appointed for it or for a substantial part of its property, is not entitled to do any of the acts described in section 3 as of the day immediately preceding the day of the relevant occurrence.

Confidentiality

15. (1) Subject to subsections (2) and (3), SODRAC, shall treat in confidence information received pursuant to this tariff, unless the disclosing party consents in writing to the information being treated otherwise.

(2) Information referred to in subsection (1) may be shared

  • (a) in connection with the collection of royalties or the enforcement of a tariff, with SOCAN;

  • (b) with the Copyright Board;

  • (c) in connection with proceedings before the Board, once the online music service has had a reasonable opportunity to request a confidentiality order;

  • (d) with any person who knows or is presumed to know the information;

  • (e) to the extent required to effect the distribution of royalties, with royalty claimants; and

  • (f) if ordered by law.

(3) Subsection (1) does not apply to information that is publicly available, or to information obtained from someone other than the online music service or its authorized distributors and who is not under an apparent duty of confidentiality to the service.

Interest on Late Payments

16. (1) Subject to subsection (4), any amount not received by the due date shall bear interest from that date until the date the amount is received.

(2) Any overpayment resulting from an error or omission on the part of SODRAC shall bear interest from the date of the overpayment until the overpayment is refunded.

(3) For the purposes of this section, a report provided pursuant to section 8 following the late reception of a report provided pursuant to section 7 is deemed to have been received within the time set out in section 8 as long as SODRAC provides that report not more than 20 days after receiving the late report.

(4) Any amount owing as a result of an error or omission on the part of SODRAC shall not bear interest until 30 days after SODRAC has corrected the error or omission.

(5) Interest shall be calculated daily, at a rate equal to one per cent above the Bank Rate effective on the last day of the previous month (as published by the Bank of Canada). Interest shall not compound.

Addresses for Notices, etc.

17. (1) Anything that an online music service sends to SODRAC shall be sent to 1470 Peel Street, Tower B, Suite 1010, Montréal (Quebec) H3A 1T1, email: sodrac@sodrac.ca, fax: 514-845-3401, or to any other address, email address or fax number of which the service has been notified in writing.

(2) Anything that SODRAC sends to an online music service shall be sent to the last address, email address or fax number of which SODRAC has been notified in writing.

Delivery of Notices and Payments

18. (1) Subject to subsection (2), a notice may be delivered by hand, by postage-paid mail, by fax, by email or by File Transfer Protocol (FTP).

(2) Information provided pursuant to sections 6 to 8 and to subsection 10(1) shall be delivered electronically, by way of delimited text file or in any other format agreed upon by SODRAC and the online music service.

(3) A notice or payment mailed in Canada shall be presumed to have been received four business days after the day it was mailed.

(4) A notice sent by fax, by email or by File Transfer Protocol (FTP) shall be presumed to have been received the day it is transmitted.

(5) All amounts required to be reported or paid under this tariff shall be reported or paid in Canadian dollars.