SOCAN is pleased with the Copyright Board of Canada’s (the Board) recent decision to maintain the increase to licence fees commercial radio stations will pay for the use of music from 2003 to 2007, as set out by the Board in their October 14, 2005 decision.

In 2006, the Federal Court of Appeal set aside the Board’s decision on the basis that it had inadequately explained the logic behind increasing the rates, namely that the use of music on the radio had been undervalued historically and that the radio broadcasting industry had achieved greater efficiencies through the use of music. In short, the Board was simply asked by the Court to more adequately explain the reasons on two of the conclusions it came to in its original decision.

The Board, after reviewing new evidence from all the parties at the original hearing, reaffirmed its original finding that the value of music to broadcasters has increased significantly since 1987. As in 2005, the Board finds the increase of value attributable to the following factors: broadcasters use more music; the music is worth more to the broadcasters than originally thought; and commercial radio stations now use music more efficiently

Under these rates, music stations will continue to pay SOCAN 3.2 per cent of their first $1.25 million in annual revenues. Annual revenues over that amount will be calculated at 4.4 per cent. Music stations that play less music will see an increase in their rate from 1.4 to 1.5 per cent of the station’s annual revenues. The Board expects that the rates will generate royalties in 2005 of $48.5-million for SOCAN. Total revenues of commercial radio stations alone were $1.34-billion in the same year.

“Music is the primary programming component of most commercial radio stations. SOCAN is proud of the Board’s decision to maintain rates set in October 2005 and encouraged by what it means to our members and the future of the Canadian music industry,” says Paul Spurgeon, VP Legal Services & General Counsel of SOCAN. “We have worked to have the rates increased for several years now and the Board’s decision and acknowledgment that the previous rates did not reflect the value of music’s contribution to the radio industry accords with common sense and should be very reassuring to music creators.”

For the full SOCAN 1.A decision, go to the Copyright Board website.