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August 1, 2014IM -
At the June International Federation of Musicians (FIM) executive committee meetings, a central topic for discussion was streaming and the possibilities of properly monetizing this delivery system for musicians’ benefit. As the major labels and independents make deals with providers for access to their catalogues, compensation to the artist is all over the map in terms of the per-stream share, and up until now, extremely low. While this involves negotiations with the labels to determine the royalty artist’s share, there will be statutory payment because of new tariffs coming online in Canada, as a result of changes to the Copyright Act.
In 2012, Canada enacted the “making available right” for performers. Canada’s Copyright Act provides that the performer’s copyright in the performer’s performance consists of the right “to make a sound recording of it available to the public by telecommunication in a way that allows a member of the public to have access to the sound recording from a place and at a time individually chosen by that member of the public and to communicate the sound recording to the public by telecommunication in that way …” and to authorize the foregoing acts. [Canadian Copyright Act (CCA), para. 15(1.1)(d)]
“Telecommunication” under the Canadian Copyright Act is defined broadly to mean “any transmission of signs, signals, writing, images or sounds, or intelligence of any nature by wire, radio, visual, optical, or other electromagnetic system.” [CCA, s. 2]
Canada affords national treatment of the “making available right” to all countries that are party to the WIPO Performances and Phonograms Treaty (WPPT). Specifically, the “making available right” is extended to foreign performers in any of the following events:
(1) where the performer’s performance takes place in a WPPT country;
(2) where the performer’s performance is fixed in a sound recording whose maker, at the time of its first fixation, was a citizen or permanent resident of a WPPT country, in the case of a natural person, or has its headquarters in a WPPT country, in the case of a corporation;
(3) where a sound recording whose first publication in a quantity sufficient to satisfy the reasonable demands of the public occurred in a WPPT country; or
(4) where the performer’s performance is transmitted at the time of its performance by a communication signal broadcast from a WPPT country, by a broadcaster that has its headquarters in that country. [CCA, s. 15 (2.2)].
Similarly, where a Canadian artist’s recordings are streamed in other WPPT countries, payments are generated as per the national treatment and compliance to the treaty in those jurisdictions.
One of the issues that promises to be front and centre, is that record labels are likely to argue that they have always had the right to make available, and that it’s included in the bundle of rights they acquire through the royalty artist agreement—when an artist/band signs with a label. If proven correct, they would be able to “make available” their back catalogues without further consultation or negotiation with the artist/band.
However, it is important to note that the “making available right” was introduced into Canadian law as a specific new right. Accordingly, Canadian producers would likely not be able to argue effectively that any provision of their recording contracts, predating Canada’s recognition of the “making available right,” can effectively transfer such right from performer to producer.
With the foregoing said, there is no provision in the Canadian Copyright Act that would prevent the routine contractual assignment by the performer of his or her “making available right” to a producer. Should industry practise prove this fact problematic for CFM members, CFM may lobby the Canadian Government to amend the Copyright Act with a view to having the “making available right” unassignable and inalienable under Canadian law. The next meaningful comprehensive opportunity for copyright reform in Canada will be in 2017, when the Canadian Government is statutorily committed to review the provisions of the Copyright Act as part of what is colloquially called a “Section 92 Review.”
As of yet, neither the scope nor the application of the “making available right” for performers has been judicially considered by either of the Copyright Board of Canada or a Canadian Court. It should also be noted that the right is not only applicable to streaming, but also downloads and interactive programming, as well as future uses as technology advances.
As streaming has become the preferred method of music delivery for the majority of users worldwide, understandably there is much interest in the application of the WPPT in various countries. To this end, sponsored by the musicians’ union in Hungary, there will be an international conference on streaming in Budapest. To date, the musicians’ unions in both Finland and Sweden have litigations underway involving streaming, contending that the labels’ interpretation that the old contract language includes the transfer of new rights is invalid.
In Canada, this new right has the potential of generating a vast amount of royalties for musicians. In fact, revenues from one provider alone (Rogers), would exceed $12 million per year, according to an industry insider. Both the CFM and the Collective Management Organizations involved have a huge interest in ensuring that the tariffs are appropriate. There is more to come on this issue in the near future.