$67 in Average Domestic Digital Royalty Payments—That’s It?

March 30, 2020

Alan Willaert  -  AFM Vice President from Canada

Pour voir cet article en français, cliquez ici.

The Society of Composers, Authors, and Music Publishers of Canada (SOCAN), Canada’s performance rights organization (PRO) representing more than 135,000 Canadian songwriters, composers, and publishers, has released some numbers on its collection and distribution for 2019. Over $400 million (CAD) was collected, the highest in the 30-year history of the organization, and an increase of 8% over 2018.

Similarly, 2019’s digital collections grew by $23 million, to a total of $86.1 million—a 38% increase from the previous year. Unfortunately, the average domestic digital royalty payment per member (including songwriters, composers, producers, publishers, and other composition rights owners) was a paltry $67. If you want to make that sound even worse, note that this figure only includes rights owners that were actually paid—meaning the ones that earned zero were excluded.

Think $67 is lame? Last year the number was $54. That said, if international digital royalties are factored in, the number would be approximately double.

SOCAN also indicated a positive performance, internationally, of members’ works, distributing an all-time high of $88.5 million in global royalties.

SOCAN CEO Eric Baptiste explains, “Royalties from television, radio, international, and concerts remain strong, but most growth this year came from domestic digital sources and it is clear that more must be done to improve the writer and publisher share from streaming royalties. If Canada’s laws aren’t promptly altered per the specifications of SOCAN and other PROs, there could be dire economic and cultural consequences.”

Another positive was that the organization confirmed that 3,000 more of its members received royalty payments in 2019 than in the previous year.

SOCAN, which formed as a result of the 1990 merger between the Composers, Authors and Publishers Association of Canada (CAPAC) and the Performing Rights Organization of Canada (PROCAN), has invested significantly in digital content recognition companies and technology as part of a larger effort to better identify instances of owed royalties. For instance, in 2016 SOCAN acquired MediaNet, a Seattle-based white label digital music service, and then purchased Audiam, a mechanical-focused start-up founded by TuneCore creator Jeff Price also centering on aggregating real-time play data from digital sources and radio stations around the globe.

In order for royalties received by Canadian songwriters, composers, and publishers to continue to grow, play-detection technology must become increasingly advanced, and the Canadian Copyright Board must react in a timelier manner and set rates more realistic in a digital world. Of course, exactly the same situation exists for the performers’ collectives in Canada—the Musicians’ Rights Organization Canada (MROC), the Recording Artists Collective Society (ACTRA-RACS), and ARTISTI in Quebec (part of Union des artists), who, together with the makers’ representatives, form Re:sound.

For the performers in Canada, the Copyright Board has yet to revisit Tariff 8, which was set in May 2014 using an old formula that resulted in royalties to Canadian artists of approximately 10% of what would be paid for similar use in the United States and other jurisdictions around the world. As if that’s not bad enough, the tariff applies only to non-interactive and semi-interactive streaming services, and does not include interactive on-demand streaming, the most lucrative and widely used platform.

One would ask, since non-interactive streaming (by which the user merely listens to a curated playlist) is so much like commercial radio, why is it not paid similar to Tariff 1a? With the current tariffs so low, it’s nearly impossible for an artist to earn a living from their recorded repertoire, unless the system in Canada is radically restructured. Hopefully, all the changes we have lobbied for, and have since been acknowledged, will soon be brought before government for the much-needed revisions.

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