The Copyright Board of Canada has issued a decision dealing with satellite radio. The decision establishes a new tariff (Tariff 25) for the communication of SOCAN’s music works on satellite radio in the years 2005-09. Ultimately, SOCAN will receive a 4.26-percent share of total revenues earned by satellite radio services operating in Canada. Currently there are two: Sirius Satellite Radio and Canadian Satellite Radio Inc. (XM Canada). Both provide a mix of commercial-free music and talk channels to their subscribers.

The Board’s decision also includes satellite radio tariff approvals for the Canadian collectives dealing with neighbouring rights (Neighbouring Rights Collective of Canada) and reproduction rights (CMRRA and SODRAC Inc., known jointly as CSI for the purpose of Copyright Board decisions). Combined, the tariffs payable to all four collectives will ultimately represent 6.2 percent of the satellite services’ revenues.

“While satellite broadcasters are still growing their business in Canada, creators of music can look forward to royalties growing as well from these important new uses,” says Paul Spurgeon, SOCAN’s vice-president Legal Services & general counsel.

The Copyright Board recognized the fact that, among other challenges, the satellite radio services incurred high front-end costs during the launch of their services, and the satellite services themselves expect to be profitable only by about the year 2010. Hence, rates certified by the Board include discounts of 25 percent for the years 2005 to 2007 and 10 percent for 2008 and 2009. As a result of these discounts, the applicable rates for 2009 will total about 5.6 percent rather than 6.2 percent.

The rates the Board has certified will generate about $1-million in royalties for all four collectives in 2006. However, at the time of the Copyright Board hearing on this matter, the satellite radio services were expecting rapid growth, such that in 2009 revenues could be multiplied by a factor of 10 compared to 2006, leading to a similar increase in royalties.

The complete SOCAN tariff, as well as the other collectives’ tariffs, are available at www.cb-cda.gc.ca/new-e.html.