Licenses For Public Performance Of Music At "Live Events" In Canada

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SOCAN (the Canadian public performance rights collective) recently announced that in 2012 they paid over $20 million in royalties from "concerts and live entertainment". That figure represented a 14% increase year-over-year. SOCAN is most often associated with the playing of songs on the radio or television, and the royalties which are generated for the composers and publishers as a result of such "public performance" - but it is worth noting that using music at a concert or other live event can trigger a variety of different payment obligations, both to SOCAN and to another collective, Re:Sound.

In most cases, the venue at which music is performed live (i.e., performed by actual live performers) or at which a pre-recorded track is played in connection with some kind of activity will be obligated to obtain a public performance license from either SOCAN, Re:Sound or both. In some circumstances, if there is no "venue", the individual or organization responsible for "putting on the show", so to speak, will be obliged to obtain the necessary licenses. SOCAN and Re:Sound administer different sets of rights which are relevant to these kinds of situations:  SOCAN administers the public performance right in musical compositions (for the benefit of composers and publishers), while Re:Sound administers the public performance right in sound recordings (for the benefit of performers and makers).

Here's how it all plays out:

SOCAN

SOCAN has a variety of tariffs applicable to the performance and use of music in "live" settings. For example, Tariff 3.A applies to the performance, by means of performers in person, of songs in "cabarets, cafes, clubs, cocktail bars, dining rooms, lounges, restaurants, roadhouses, taverns and similar establishments". The venue in question must pay to SOCAN a license fee, payable annually, of 3% of the "compensation for entertainment" paid in the year covered by the license (subject to a minimum fee of $83.65 in 2012). "Compensation for entertainment" means compensation received by the performers, but does not include expenditures on things like staging, lighting equipment, costumes, etc.

SOCAN Tariff 3.B, on the other hand, covers the use of recorded music as integral component of an otherwise live entertainment performance at one of the aforementioned venues (so, as an example, pre-recorded backing tracks of music used by a singer, or the recordings used by a DJ accompanied by dancers). Again, the annual license fee is calculated by reference to "compensation for entertainment" paid - in this case, 2% of compensation for entertainment, subject to a minimum of $62.74 in 2012.

Tariff 3.C covers the use of recorded music at what is delicately termed "adult entertainment clubs" - but the fee is calculated differently: $0.04 per day, multiplied by the capacity of the club (as authorized by its liquor license). (So next time you hear "Girls, Girls, Girls" blasting at the Marble Arch, rest assured that Nikki Sixx is getting his cut.)

So far, that's fairly straightforward, and we can see how the basic system is structured: identify a type of "use" and then calculate a license fee based on some relevant metric (fees paid, attendance, etc.). That being said, things start getting a little funky as the various categories of "use" aren't always intuitive. This chart attempts to make some sense of the situation:

SOCAN Tariff No. Description Corresponding Re:Sound Tariff
3A live music in cabarets, cafes, clubs, cocktail bars, dining rooms, lounges, restaurants, roadhouses, taverns and similar establishments N/A
3B recorded music as an integral part of a live performance in cabarets, cafes, clubs, cocktail bars, dining rooms, lounges, restaurants, roadhouses, taverns and similar establishments 5A
4

A. performances at "popular music concerts" taking place at "concert halls, theatres and other places of entertainment" (including "open-air events" and including lip-synching and showing an audio-visual recording of a concert) (this license is split into "per event" and "annual" license fee options)

B. performances at "classical music concerts" (this license is split into "per event" and "annual" license fee options)
5D
5 performance of music at exhibitions and fairs 5D
7 skating rinks 6B
8 receptions, conventions, assemblies and fashion shows (note that the license fee is different depending on whether the event is "without dancing" or "with dancing") 5B
9 sports events  5H
10

parks, parades, streets and other public areas

A. strolling musicians and buskers, recorded music

B. marching bands, floats with music

 5F, 5G
11

A. circuses, ice shows, fireworks displays, sound and light shows and similar events

B. comedy shows and magic shows

 5E, 5I
14 performance of an individual work at a single event when that work is the sole work performed  N/A
18 recorded music for dancing in "bars, cabarets, restaurants, taverns, clubs, dining rooms, discotheques, dance halls, ballrooms and similar premises" (note that this is different from 3.B, where the recorded music accompanies a live performance)  6A
19 fitness activities and dance instruction  6A, 6B
20 karaoke bars and similar establishments  5C

So, as an example, when Bruce Springsteen and the E Street Band perform a concert at, say, the Air Canada Centre in downtown Toronto, the venue is obliged to obtain a license from SOCAN pursuant to Tariff 4.A.

SOCAN provides a pretty handy page which sets out the various tariffs, license fee calculators and links to the various tariffs - users are encouraged to check it out.

Re:Sound

Although it may not be top of mind, the good folks at Re:Sound also have tariffs applicable to the use of music in connection with live performances - but whereas SOCAN's rights are engaged either when a composition is performed live or when a pre-existing sound recording (on which a composition has been recorded) is played, Re:Sound's rights are only relevant when the latter occurs. Re:Sound administers the public performance right in sound recordings, so only when a piece of recorded music is used (either in connection with a live performance of some kind or as the accompaniment to some kind of activity) will a Re:Sound license be required.

The Re:Sound tariffs don't numerically line up with the SOCAN tariffs, though they cover the same set of activities:

Re:Sound Tariff No. Description Corresponding SOCAN Tariff
5A recorded music accompanying live entertainment in cabarets, cafes, clubs, restaurants, roadhouses, taverns and similar establishments (pre-2013) / accompanying any type of live entertainment including theatrical, dance, acrobatic or other live performances (commencing in 2013) 3B, 4
5B receptions, conventions, assemblies and fashion shows 8
5C karaoke bars and similar establishments 20
5D festivals, exhibitions and fairs 4, 5
5E circuses, ice shows, fireworks displays, sound and light shows and similar events 11A
5F parades 10
5G parks, streets and other public areas 10
5H sports events (commencing 2013) 9
5I comedy and magic shows (commencing 2013) 11B
5J concerts - during entrance and exit of audiences and during breaks in the live performance (commencing 2013) 4
6A recorded music accompanying dance in any indoor or outdoor venue 3A, 3B
6B recorded music accompanying physical activities / [in fitness venues (commencing 2013)] 19
6C recorded music accompanying adult entertainment (commencing 2013) 3B

A caveat: because the world of tariffs is always in a state of relative uncertainty (due to the lag in tariffs being approved and the fact that the terms of proposed tariffs can be modified prior to certification), and because this stuff is just kind of complicated, there may be errors in the foregoing tables - corrections and suggested additions are welcome.

Continuing on with our earlier Bruce Springsteen example, if the Air Canada Centre hosts a Bruce Springsteen concert, they will be obliged to obtain a SOCAN license under SOCAN Tariff 4A (because there will be compositions which will be played by the band during the concert), and if there will be pre-recorded music which is being played before and after the actual concert, then a Re:Sound license will be needed under Re:Sound Tariff 5J. If there is pre-recorded music which is played during the concert, then a license under Re:Sound Tariff 5A will be required.

In short, venue owners and individuals or organizations putting on "live entertainment" in public need to answer two different questions: First, will there be pre-recorded music which is played to the public at the event in question? If so, then a Re:Sound license will likely be required, and a SOCAN license will likely also be required. Second, if no pre-recorded music is being used, will there be live performers playing music at the event? If so, then a SOCAN license will likely be required. (I use the qualifier "likely" in each case because there are some events at which the music being used will not be in the repertoire of SOCAN and/or Re:Sound, such as a live performance of public domain classical works.)

Topics:  Canada, Licenses, Public Performance Rights, Royalties, SOCAN, Tariffs

Published In: Art, Entertainment & Sports Updates, General Business Updates, Intellectual Property Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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