Vol. 148, No. 23 — June 7, 2014

COPYRIGHT BOARD

FILE: Reproduction of Musical Works

Statement of Proposed Royalties to Be Collected for the Reproduction of Musical Works in Cinematographic Works for Theatrical Exhibition or Private Use, Reproduction of Musical Works in Musical Audiovisual Works for their Transmission by a Service and for the Reproduction of Musical Works in Audiovisual Works for their Transmission by a Service

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 31, 2014, with respect to royalties it proposes to collect, effective on January 1, 2015, 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 2015 (Tariff No. 5), for the reproduction of musical works embedded in musical audiovisual works for their transmission by a service, in Canada, in 2015 (Tariff No. 6) and for the reproduction of musical works embedded in audiovisual works for their transmission by a service, in Canada, in 2015 (Tariff No. 7).

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 30, 2014.

Ottawa, May 31, 2014

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)

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 2015

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, 2015.

Definitions

2. In this tariff,

“audiovisual work” means a movie, television program or other cinematographic work irrespective of its initial intended use, but excludes musical audiovisual work; (« œuvre audiovisuelle »)

“musical audiovisual work” Audiovisual work consisting predominantly of musical audiovisual content, including a videoclip, a concert, a musical, a variety show, a program of physical exercises, including any extract of such audiovisual work, but excluding comedy or children audiovisual works consisting predominantly of music; (« œuvre audiovisuelle musicale »)

“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,

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) For greater certainty, this tariff does not apply to programs sold or transmitted online, directly or through an online music service, by the Canadian Broadcasting Corporation/Société Radio-Canada or to activities subject to SODRAC Tariff No. 6 or SODRAC Tariff No. 7.

Musical Audiovisual Work

5. For reproductions made pursuant to paragraph 3(a), in the case of musical audiovisual work, a distributor shall pay to SODRAC a royalty of 1.47¢ for each minute of music requiring a licence from SODRAC.

Paragraph 3(a): Alternative Tariff Arrangements and Elections

6. (1) For audiovisual work other than musical audiovisual work, a distributor shall pay royalties for reproductions made pursuant to paragraph 3(a) pursuant to section 7 or section 8.

(2) A distributor shall pay royalties pursuant to section 8 unless the distributor notifies SODRAC, before January 1 of a year that the distributor has elected to pay royalties pursuant to section 7 for that and subsequent years.

(3) A distributor who has elected to pay royalties pursuant to section 7 continues to do so until the distributor notifies SODRAC, before January 1 of a year, of the distributor’s election to pay royalties pursuant to section 8 for that and subsequent years.

7. (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:

Per minute rate, per copy of program or product Foreground music (including themes) Background music (including transitions)
First 15 minutes 1.47¢ 0.59¢
Next 15 minutes 0.89¢ 0.36¢
Each additional minute 0.53¢ 0.22¢

(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) Royalties owing for a product (box set) comprising several television programs are calculated on the basis of the product’s entire content.

8. For reproductions made pursuant to paragraph 3(a), a distributor shall pay to SODRAC, in respect of music requiring a licence from SODRAC, a royalty calculated pursuant to the following table:

Amount of music requiring a SODRAC licence Royalty per copy
No more than 5 minutes 2.45¢
More than 5 and no more than 10 minutes 6.51¢
More than 10 and no more than 20 minutes 12.13¢
More than 20 and no more than 30 minutes 17.38¢
More than 30 and no more than 45 minutes 21.94¢
More than 45 and no more than 60 minutes 26.36¢

9. Notwithstanding section 5, subsection 7(1) or section 8, 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.

Paragraph 3(b): Royalties

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

Taxes

11. 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

12. (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,

(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, 7 or 8.

(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,

(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

13. (1) As soon as possible after receiving the information set out in section 12, 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

(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.

14. (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 13 before the end of the semester and a copy of which was sold during the semester, the following information relating to that semester:

(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 10 are due no later than on January 31 of the relevant year.

Repertoire Disputes

15. (1) A distributor that disputes the indication in a report received pursuant to section 13 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 13 is not entitled to interest on the amounts owed to it.

Accounts and Records

16. (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 12 to 14 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

17. (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)

(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

18. 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

19. (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 12 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 13 was received before the end of a semester for the purposes of section 14.

(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

20. (1) Anything that a distributor sends to SODRAC pursuant to section 12 or 14 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, Attn. Director, Licensing and Legal Services, email: licences@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.

21. (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 12 or 14 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

22. (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

23. This tariff comes into force on January 1, 2015, and ends on December 31, 2015.

STATEMENT OF ROYALTIES TO BE COLLECTED BY SODRAC FOR THE REPRODUCTION OF MUSICAL WORKS EMBEDDED IN MUSICAL AUDIOVISUAL WORKS FOR THEIR TRANSMISSION BY A SERVICE, IN CANADA, IN 2015

Short Title

1. This tariff may be cited as SODRAC Tariff No. 6, Reproduction of musical works embedded in musical audiovisual works for transmission by a service, 2015.

Definitions

2. In this tariff,

“cue sheet” means a report containing the following information: the title of the musical audiovisual work, the title of each of the musical works embedded into the musical audiovisual work, the name of the author and composer of each of the musical works, the duration of each of the musical works, the duration of the musical audiovisual work; (« rapport de contenu musical »)

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

“file” means a digital file of a musical audiovisual work; (« fichier »)

“free on-demand stream” excludes an on-demand stream provided to a subscriber; (« transmission sur demande gratuite »)

“free subscription” means the provision of free access to limited downloads or on-demand streams to a subscriber; (« abonnement gratuit »)

“gross revenue” means the aggregate of (a) all revenues payable by or on behalf of end users for access to streams or downloads delivered by a service or its authorized distributors, including membership, subscription and other access fees; (b) all other revenues payable to a service or its authorized distributors in respect of the service, including amounts paid for advertising, product placement, promotion and sponsorship, and commissions on third-party transactions; and (c) amounts equal to the value of the consideration received by a service or its authorized distributors pursuant to any contra and barter agreements related to the operation of the service; (« revenus bruts »)

“identifier” means the unique identifier a service assigns to a file; (« identificateur »)

“limited download” means a download that uses technology that causes the file to become unusable upon the happening of a certain event; (« téléchargement limité »)

“musical audiovisual work” Audiovisual work consisting predominantly of musical audiovisual content, including a videoclip, a concert, a musical, a variety show, a program of physical exercises, including any extract of such audiovisual work, but excluding comedy or children’s audiovisual works consisting predominantly of music, fixed on any digital support whatsoever; (« œuvre audiovisuelle musicale »)

“non-subscriber” means an end user other than a subscriber, and includes an end user who receives limited downloads or on-demand streams from a service subject to the requirement that advertising be viewed or listened to; (« non-abonné »)

“on-demand stream” means a stream selected by its recipient; (« transmission sur demande »)

“play” means the single performance of a stream or a limited download; (« écoute »)

“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 »)

“service” means a service that delivers on-demand streams, limited downloads and permanent downloads of a musical audiovisual work to end users by any means whatsoever (e.g. cable, online, satellite); (« service »)

“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 »)

“subscriber” means an end user with whom a service or its authorized distributor has entered into a contract for service other than on a transactional per-download or per-stream basis, for a fee, for other consideration, including pursuant to a free subscription; (« abonné »)

“unique visitor” means each end user, excluding a subscriber, who receives a free on-demand stream from a service in a month. (« visiteur unique »)

Application

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

in connection with the operation of the service.

(2) For greater certainty, this tariff does not apply to musical audiovisual work sold or transmitted online, directly or through a service, by the Canadian Broadcasting Corporation/Société Radio-Canada, or to activities subject to SODRAC Tariff No. 5 and SODRAC Tariff No. 7.

4. (1) This tariff does not authorize the reproduction of a musical work of the repertoire embedded in a musical audiovisual 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 musical audiovisual work or the synchronization of a musical work in a musical audiovisual work. It authorizes only the transmission by any means whatsoever of existing musical audiovisual works in which the musical work is already embedded.

Royalties

Permanent Downloads

5. (1) Subject to paragraph (6)(b), the royalties payable in a month by a service that offers permanent downloads requiring a SODRAC licence shall be 5.64 per cent of the amount paid by an end user for the download subject to a minimum of 2.6¢ per musical work in a musical audiovisual work that contains 19 or more musical works, per permanent download, and 8.04¢ per permanent download in all other cases.

Limited Downloads

(2) The royalties payable in a month by a service that offers limited downloads requiring a SODRAC licence shall be,

A × B
C

where

subject to a minimum equal to the greater of

Where a service does not report to SODRAC the number of plays of files as limited downloads, (B) will be deemed to equal either (a) the number of plays of the same musical audiovisual work as an on-demand stream during the month, or (b) if the musical audiovisual work has not been played as an on-demand stream during the month, the average number of plays of all musical audiovisual work as on-demand streams during the month.

On-Demand Streams

(3) Subject to paragraph (6)(b), the royalties payable in a month by a service that offers on-demand streams but does not offer limited downloads shall be

A × B
C

where

subject to a minimum equal to the greater of

For clarity, if the service permits an end user to copy files onto a local storage medium or device for later access, the service shall pay royalties pursuant to subsection (2)(b), not pursuant to this subsection.

Free On-Demand Streams

(4) Subject to paragraph (6)(a), the royalties payable for free on-demand streams shall be the lesser of 16.37¢ per unique visitor per month and 0.054¢ per free on-demand stream requiring a SODRAC licence received by that unique visitor in that month.

(5) Subject to paragraph (6)(a), where a service that is required to pay royalties under any of subsections (2) to (4) also offers permanent downloads, the royalty payable by the service for each permanent download requiring a SODRAC licence shall be 5.64 per cent of the amount paid by an end user for the download, subject to a minimum of 2.6¢ musical work in a musical audiovisual work that contains 19 musical works or more, per permanent download, and 8.04¢ per permanent download in all other cases.

Adjustments

(6) Where SODRAC does not hold all the rights in a musical work,

(7) For the purpose of calculating the minimum payable pursuant to paragraph (2)(b) and subsection (3), the number of subscribers shall be determined as at the end of the month in respect of which the royalties are payable.

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

ADMINISTRATIVE PROVISIONS

Reporting Requirements

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

Sales Reports

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

Permanent and Transactional Limited Downloads

(2) No later than 20 days after the end of each quarter, a service that is required to pay royalties pursuant to subsection 5(1) or paragraph 5(2)(a) shall provide to SODRAC a report setting out, for that quarter, allocated by month,

Subscription-based Limited Downloads and On-Demand Streams

(3) No later than 20 days after the end of each quarter, a service that is required to pay royalties pursuant to paragraph 5(2)(b) and subsection 5(3) shall provide to SODRAC a report setting out, for that quarter, allocated by month,

Free On-Demand Streams

(4) No later than 20 days after the end of each quarter, a service that is required to pay royalties pursuant to subsection 5(4) shall provide to SODRAC a report setting out, for that quarter, allocated by month,

(5) A service that is required to pay royalties pursuant to more than one subsection of section 5 shall file a separate report pursuant to each subsection of this section.

(6) Whenever a service is required to report its gross revenue for a month, it shall include, separately — and in addition to any other information specifically required by the relevant subsection — the amount of revenue received from subscribers, the amount received from non-subscribers, the amount received from advertisers, the amount attributable to sponsorships, and the amounts received from each additional revenue source.

(7) Using the information received pursuant to subsections (1) to (4) 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.

(8) A service that does not supply a musical cue sheet pursuant to paragraph (1)(b) shall collaborate with SODRAC if SODRAC attempts to secure the cue sheet from anyone, including the producer of the musical audiovisual work. If SODRAC does not receive the cue sheet despite such collaboration, the service shall provide to SODRAC, if available,

(9) A service shall provide the information set out in subsection (1) or (8) with respect to each otherwise identical musical audiovisual work if the musical content in each such work is different.

(10) If the information supplied pursuant to subsection (1), (8) or (9) does not allow SODRAC to reasonably proceed to the distribution of royalties, SODRAC, after first conducting its own reasonable search, may further inquire with the service, which will make reasonable efforts to supply any further, relevant information to assist SODRAC in its royalty distribution, including

8. (1) As soon as possible after receiving the information set out in section 7, SODRAC shall notify the service of those musical audiovisual works for which a SODRAC licence is required. With respect to such works, SODRAC shall also provide to the service a report setting out

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

9. Royalties payable pursuant to section 5 are due no later than six months after the quarter. If SODRAC does not provide the report under section 8 prior to the date where the payment is due, the payment of royalties for that quarter is deferred to the next quarter.

Repertoire Disputes

10. (1) A service that disputes the indication in a report received pursuant to section 8 that a file contains a musical work requiring a SODRAC licence shall provide to SODRAC the information on which the service relies to conclude that the licence is not required, unless the information was provided earlier.

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

Records and Audits

11. (1) A service and SODRAC shall keep and preserve, for a period of four years after the end of the quarter to which they relate, records from which the information set out in sections 7 and 8 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 service a copy of the audit report.

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

Confidentiality

12. (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

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

Adjustments

13. 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.

Interest on Late Payments

14. (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 the report no more than 20 days after receiving the late report.

(4) Any amount owing by a service 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

15. (1) Anything that a service sends to SODRAC pursuant to sections 6 and 7 shall be sent by email to audiovisual@sodrac.ca. Anything else that a service sends to SODRAC shall be sent to 1470 Peel Street, Tower B, Suite 1010, Montréal, Quebec H3A 1T1, Attn. Director, Licensing and Legal Services, email: licences@sodrac.ca, fax number: 514-845-3401, or to any other address of which the service has been notified in writing.

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

16. (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 service provides pursuant to section 7 shall be delivered electronically, in Excel format or in any other format agreed upon by SODRAC and the service. 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

17. (1) SODRAC may, after providing a 30-day notice in writing, terminate the licence of a service that does not comply with this tariff.

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

Term

18. This tariff comes into force on January 1, 2015, and ends on December 31, 2015.

STATEMENT OF ROYALTIES TO BE COLLECTED BY SODRAC FOR THE REPRODUCTION OF MUSICAL WORKS EMBEDDED IN AN AUDIOVISUAL WORK FOR THEIR TRANSMISSION BY A SERVICE, IN CANADA, 2015

Short Title

1. This tariff may be cited as SODRAC Tariff No. 7, Reproduction of musical works embedded in audiovisual works for transmission by a service, 2015.

Definitions

2. In this tariff,

“audiovisual work” means a movie, television program or other cinematographic work irrespective of its initial intended use, but excludes musical audiovisual work as defined in SODRAC Tariff No. 6; (« œuvre audiovisuelle »)

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

“cue sheet” means a report containing the following information: the title of the audiovisual work, the title of each of the musical works embedded into the audiovisual work, the name of the author and composer of each of the musical works, the duration of each of the musical works, and the total duration of the audiovisual work; (« rapport de contenu musical »)

“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 an audiovisual work embedding one or more musical works; (« fichier »)

“free on-demand stream” excludes an on-demand stream provided to a subscriber; (« transmission sur demande gratuite »)

“free subscription” means the provision of free access to limited downloads or on-demand streams to a subscriber; (« abonnement gratuit »)

“gross revenue” means the aggregate of (a) all revenues payable by or on behalf of end users for access to streams or downloads delivered by a service or its authorized distributors, including membership, subscription and other access fees; (b) all other revenues payable to a service or its authorized distributors in respect of the service, including amounts paid for advertising, product placement, promotion and sponsorship, and commissions on third-party transactions; and (c) amounts equal to the value of the consideration received by a service or its authorized distributors pursuant to any contra and barter agreements related to the operation of the service; (« revenus bruts »)

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

“limited download” means a download that uses technology that causes the file to become unusable upon the happening of a certain event; (« téléchargement limité »)

“non-subscriber” means an end user other than a subscriber, and includes an end user who receives limited downloads or on-demand streams from a service subject to the requirement that advertising be viewed or listened to; (« non-abonné »)

“on-demand stream” means a stream selected by its recipient; (« transmission sur demande »)

“play” means the single performance of a stream or a limited download; (« écoute »)

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

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

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

“service” means a service that delivers on-demand streams, limited downloads and permanent downloads of an audiovisual work to end users, by any means whatsoever (e.g. online, cable, satellite); (« service »)

“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 »)

“subscriber” means an end user with whom a service or its authorized distributor has entered into a contract for service other than on a transactional per-download or per-stream basis, for a fee, for other consideration, including pursuant to a free subscription; (« abonné »)

“unique visitor” means each end user, excluding a subscriber, who receives a free on-demand stream from a service in a month. (« visiteur unique »)

Application

3. This tariff entitles a service that complies with this tariff, and its authorized distributors,

in connection with the operation of the service.

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) For greater certainty, this tariff does not apply to activities subject to SODRAC Tariff No. 5 and SODRAC Tariff No. 6.

(3) This tariff does not authorize the production of an audiovisual work or the synchronization of a musical work in an audiovisual work. It authorizes only the transmission by any means whatsoever of an existing audiovisual work in which a musical work is already embedded.

Royalties

Permanent Downloads

5. (1) Subject to paragraph (6)(a), the royalties payable in a month by a service that offers permanent downloads requiring a SODRAC licence shall be the greater of paragraphs (1)(a) and (b):

Amount of music requiring a SODRAC licence Royalty per downloaded file
No more than 5 minutes 2.45¢
More than 5 and no more than 10 minutes 6.51¢
More than 10 and no more than 20 minutes 12.13¢
More than 20 and no more than 30 minutes 17.38¢
More than 30 and no more than 45 minutes 21.94¢
More than 45 and no more than 60 minutes 26.36¢

Limited Downloads

(2) The royalties payable in a month by a service that offers limited downloads requiring a SODRAC licence shall be the greater of paragraphs (2)(a) and (b):

Where a service does not report to SODRAC the number of plays of files as limited downloads, (B) will be deemed to equal either (a) the number of plays of the same audiovisual work as an on-demand stream during the month, or (b) if the audiovisual work has not been played as an on-demand stream during the month, the average number of plays of all audiovisual work as on-demand streams during the month.

Amount of music requiring a SODRAC licence Royalty per play
No more than 5 minutes 1.84¢
More than 5 and no more than 10 minutes 4.90¢
More than 10 and no more than 20 minutes 9.19¢
More than 20 and no more than 30 minutes 13.07¢
More than 30 and no more than 45 minutes 16.50¢
More than 45 and no more than 60 minutes 19.82¢

On-Demand Streams

(3) The royalties payable in a month by a service that offers on-demand streams but does not offer limited downloads shall be the greater of paragraphs (3)(a) and (b):

Amount of music requiring a SODRAC licence Royalty per play
No more than 5 minutes 1.29¢
More than 5 and no more than 10 minutes 3.43¢
More than 10 and no more than 20 minutes 6.40¢
More than 20 and no more than 30 minutes 9.16¢
More than 30 and no more than 45 minutes 11.57¢
More than 45 and no more than 60 minutes 13.90¢

Free On-Demand Streams

(4) Subject to paragraph (6)(a), the royalties payable for free on-demand streams shall be the lesser of 7.95¢ per unique visitor per month and 0.054¢ per free on-demand stream requiring a SODRAC licence received by that unique visitor in that month.

(5) Subject to paragraph (6)(a), where a service that is required to pay royalties under any of subsections (2) to (4) also offers permanent downloads, the service is required to pay royalties under subsection (1).

Adjustments

(6) Where SODRAC does not hold all the rights in a musical work,

(7) For the purpose of calculating the minimum payable pursuant to subparagraph (2)(a)(ii) and paragraph (3)(a), the number of subscribers shall be determined as at the end of the month in respect of which the royalties are payable.

(8) All royalties payable under this tariff are exclusive of any bank fees and 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 a 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:

Sales Reports

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

Permanent and Transactional Limited Downloads

(2) No later than 20 days after the end of each semester, any service that is required to pay royalties pursuant to subsection 5(1), subparagraph 5(2)(a)(i) or paragraph 5(2)(b) shall provide to SODRAC a report setting out, for that semester, allocated by month,

Subscription-based Limited Downloads and On-Demand Streams

(3) No later than 20 days after the end of each semester, any service that is required to pay royalties pursuant to subparagraph 5(2)(a)(ii), paragraph 5(2)(b) and subsection 5(3) shall provide to SODRAC a report setting out, for that semester, allocated by month,

Free On-Demand Streams

(4) No later than 20 days after the end of each semester, a service that is required to pay royalties pursuant to subsection 5(4) shall provide to SODRAC a report setting out, for that month,

(5) A service that is required to pay royalties pursuant to more than one subsection of section 5 shall file a separate report pursuant to each subsection of this section.

(6) Whenever a service is required to report its gross revenue for a month, it shall include, separately — and in addition to any other information specifically required by the relevant subsection — the amount of revenue received from subscribers, the amount received from non-subscribers, the amount received from advertisers, the amount attributable to sponsorships, and the amounts received from each additional revenue source.

(7) Using the information received pursuant to subsections (1) to (4) 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.

(8) A service that does not supply a musical cue sheet pursuant to paragraph (1)(b) shall collaborate with SODRAC if SODRAC attempts to secure the cue sheet from anyone, including the producer of the audiovisual work. If SODRAC does not receive the cue sheet despite such collaboration, the service shall provide to SODRAC, if available,

(9) A service shall provide the information set out in subsection (1) or (8) with respect to each otherwise identical audiovisual work if the musical content in each such work is different.

(10) If the information supplied pursuant to subsections (1), (8) or (9) does not allow SODRAC to reasonably proceed to the distribution of royalties, SODRAC, after first conducting its own reasonable search, may further inquire with the service, which will make reasonable efforts to supply any further, relevant information to assist SODRAC in its royalty distribution, including

8. (1) As soon as possible after receiving the information set out in section 7, SODRAC shall notify the service of those audiovisual works for which a SODRAC licence is required. With respect to such works, SODRAC shall also provide to the service a report setting out

(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.

9. Royalties payable pursuant to section 5 are due no later than six months after the semester. If SODRAC does not provide the report under section 8 prior to the date where the payment is due, the payment of royalties for that semester is deferred to the next semester.

Repertoire Disputes

10. (1) A service that disputes the indication in a report received pursuant to section 8 that a file contains a musical work requiring a SODRAC licence shall provide to SODRAC the information on which the service relies to conclude that the licence is not required, unless the information was provided earlier.

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

Records and Audits

11. (1) A service 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 sections 7 and 8 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

12. (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

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

Adjustments

13. 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

14. (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 section 7 is deemed to have been received within the time set out in section 8 as long as SODRAC provides the report no more than 20 days after receiving the late report.

(4) Any amount owing by a service 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

15. (1) Anything that a service sends to SODRAC pursuant to sections 6 and 7 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, Attn. Director, Licensing and Legal Services, email: licences@sodrac.ca, fax number: 514-845-3401, or to any other address of which the service has been notified in writing.

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

16. (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 service provides pursuant to section 7 shall be delivered electronically, in Excel format or in any other format agreed upon by SODRAC and the service. 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

17. (1) SODRAC may, after providing a 30-day notice in writing, terminate the licence of a service that does not comply with this tariff.

(2) Upon termination of the licence, a service shall immediately withdraw from the market all files that contain a musical work of the repertoire.

Term

18. This tariff comes into force on January 1, 2015, and ends on December 31, 2015.