Why Canada Needs to Fix Music Licensing Rules NOW

The US Copyright Office has initiated a study into music licensing to try and streamline the process.  The current system is not only confusing, but broken.  We need to something similar in Canada.  In fact, you can make a convincing argument that our system is even more broken. Before we go any further, let’s set everything in the proper context. All radio stations in Canada pay for the privilege of using music as part of their broadcast day.  These are called “performing rights fees” and they come in three flavours and are administered and collected by three different organizations:

  1. SOCAN:  The Society of Composers, Authors and Music Publishers of Canada collects fees for any public performance and distributes them the composer(s) of the song.
  2. Re:Sound:   It also licenses recorded music for public performance, broadcast and new media.  These fees go to the performers and musicians who appear on audio recordings along with record companies which hold stakes in these recordings.
  3. Canadian Musical Reproductions Rights Agency:  The CMRRA represents publishers and copyright owners.

These radio station fees are linked to the pre-tax on-air revenue of the station; the more the station pulls in, the more they have to pay for the right to play songs.  Makes sense.  Totally fair. The history of these performing rights collectives date back decades, to the time when people realized there had to be a simple and easy way for songs to be played on the radio–and that no collective could refuse to license a client’s songs.  The copyright rules governing all this are enumerated under something called Tariff 22. With me so far? While these fee structures work very well with terrestrial radio, the same cannot be said for broadcasting music on the Internet.  (There’s one exception:  if you simulcast your on-air broadcast with a stream, you’re covered by the existing situation; no additional fees are required.) Where it gets VERY weird is when you want to broadcast music just on the Internet.  And I have a dog in this fight.  Let me illustrate. As you might know, I produce a weekly radio show called The Secret History of Rock.  There are also 691 episodes of my old show, The Ongoing History of New Music, sitting on hard drives somewhere.  People have asked me a zillion times if either show is (a) available for download; (b) available as a podcast; or (c) available anywhere online, period.  What they’re looking for is an on-demand stream of the shows so they can pick and choose and then listen at their leisure. Sounds simple, right?  Well, it’s not. The answer to all three of those questions is “no”–and it all has to do with music licensing.  Let me explain why. (a) Downloads:  If I (or anyone) were to make any of these shows available for download (free or otherwise), the law says I must obtain permission from the rights holders of all the music in the shows lest I be accused of unauthorized distribution of copyrighted work. (Don’t use the “But almost all music is DRM-free now!” argument.  It won’t work.)  This is impractical.

  • First , I’d have to track down the rights holders for every single song.
  • Second, I’d have to wait for each one to render a “yes” or “no” to my request.
  • Third–assuming that every single rights holder was on board–I’d have to pay for the privilege.  How much?  Well, terms for each song would have to be negotiated separately.
  • And fourth, chances are they’d ask for a big deposit–five figures for sure–to cover future streaming fees for the songs.

(b) Podcasts:  Same as downloads.  Maybe even trickier given the industry’s distrust of music podcasts. (c) On-demand streaming:  Aha! This should be easy, right?  Er, no.  Not at all.  And this is what needs to be fixed first.  And fast. After many meetings with people in the rights holding business, I’ve discovered that the rules and regulations regarding music streaming are so complicated that these rights holding organizations aren’t clear on what the regulations are regarding each other.  Here’s what I’ve managed to figure out so far. Under Canadian copyright law, the ability to stream any audio programming on demand is classified as either “semi-interactive” or “interactive.”  The ability to stream a program on-demand (with no further powers such as the ability to skip songs or to keep digital tracks resident on your digital device) is considered “semi-interactive.” “Semi-interactive” streams that contain music but be set up in such a way so that it can be determined how many people listened to each individual song so that fractions of pennies can be paid out on a per-song per-listener basis.  That’s easy to track and report if you’re just running song after song after song. However, when the song is embedded in the midst of spoken word (i.e. produced within a show like Secret History or Ongoing History), tracking and reporting is impossible.  The only way to legally make such a stream available is to UNproduce the show (i.e. separate the music from the spoken word and post them as separate files). That’s dumb.

  • First, it ruins produced flow of a such a program where talking and songs blend in and out.  The audio integrity of the show is totally destroyed and you’re left with something that sounds horribly choppy.
  • Second, doing it this way takes FOREVER.  It’s just not worth it.
  • Third, we’d still have to pay for the rights to use the songs.
  • And fourth, did I mention that the costs for broadcasting songs online are TWENTY TIMES HIGHER than what terrestrial radio stations have to pay?

Well, what about just posting the shows on YouTube?  Possibly, but YouTube’s algorithms would end up flagging the files as containing copyrighted material and take them down. Bottom line is that these rules prevent rebroadcasting of music-intensive over-the-air radio shows as an on-demand stream through a website or app. They’re also a hindrance for anyone who wants to produce music-intensive shows just for the broadcast on, say, a radio station’s website. Legally, anyway.  Sure, you can find my radio shows in certain places online (there are plenty of torrents) but I’m not getting paid for my work and neither are the rights holders of the music.  Most of all, though, I’m frustrated that all this work–more than twenty years’ worth–is going unheard. And this situation is going to get weirder. Music consumers are now conditioned to get what they want, when they want it, wherever they are on whatever device they happen to have.  And they can–EXCEPT when it comes to previously-aired music-related content produced by Canadian radio stations.  It’s not illegal to provide this content, but the rules make it impossible.  Innovation in this space is being choked–except for the organizations willing to pay these huge fees.  Some–Songza, Deezer, Rdio, Slacker and a few others–are.  Others–most notably Spotify and Pandora–refuse. Somebody’s gotta do something, otherwise the future of traditional radio is in big trouble.  Without the flexibility to adapt to new methods of distribution, how is it going to survive? This is the premise behind a panel I’ll moderate at Canadian Music Week as part of the Radio Interactive portion of the conference.  I’ve invited participants from all the stakeholders in this situation so we can talk about these challenges.  Let’s see what happens. (Further reading on the US situation can be found here.)

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