Canada Gazette, Part I, Volume 148, Number 21: SUPPLEMENT

May 24, 2014

COPYRIGHT BOARD

FILE: Reproduction of Musical Works

Statement of Proposed Royalties to Be Collected for the Reproduction of Musical Works in Canada

In accordance with section 70.14 of the Copyright Act, the Copyright Board hereby publishes the statement of proposed royalties filed by CMRRA-SODRAC Inc. (CSI), on March 31, 2014, on behalf of the Society of Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) and the Canadian Musical Reproduction Rights Agency (CMRRA), with respect to royalties it proposes to collect, effective January 1, 2015, for the reproduction of musical works in Canada, by commercial radio stations in 2015, non-commercial radio stations in 2015 and online music services in 2015.

In accordance with the provisions of the same section, the Board hereby gives notice that prospective users or their representatives who wish to object to the proposed tariffs may file written objections with the Board, at the address indicated below, within 60 days of the publication hereof, that is no later than July 23, 2014.

Ottawa, May 24, 2014

GILLES MCDOUGALL
Secretary General
56 Sparks Street, Suite 800
Ottawa, Ontario
K1A 0C9
613-952-8624 (telephone)
613-952-8630 (fax)
gilles.mcdougall@cb-cda.gc.ca (email)

STATEMENT OF ROYALTIES TO BE COLLECTED FROM COMMERCIAL RADIO STATIONS BY CMRRA-SODRAC INC. (CSI) FOR THE REPRODUCTION, IN CANADA, OF MUSICAL WORKS FOR THE YEAR 2015

Short Title

1. This tariff may be cited as the CSI Commercial Radio Tariff 2015.

Definitions

2. In this tariff,

“Act” means the Copyright Act; (« Loi »)

“gross income” means the gross amounts paid by any person for the use of one or more broadcasting services or facilities provided by a station's operator, including the value of any goods or services provided by any person in exchange for the use of such services or facilities, the fair market value of non-monetary consideration (e.g. barter or “contra”), and any income from simulcast, but excluding the following:

• (a) income accruing from investments, rents or any other business unrelated to the station's broadcasting activities. However, income accruing to or from any allied or subsidiary business, income accruing to or from any business that is a necessary adjunct to the station's broadcasting services or facilities, or income accruing to or from any other business that results in the use of such services or facilities, including the gross amounts received by a station pursuant to turn-key contracts with advertisers, shall be included in the station's “gross income”;
• (b) amounts received for the production of a program that is commissioned by someone other than the station and that becomes the property of that person;
• (c) the recovery of any amount paid to obtain the exclusive national or provincial broadcast rights to a sporting event, if the station can establish that it was also paid normal fees for station time and facilities; and
• (d) amounts received by an originating station acting on behalf of a group of stations, which do not constitute a permanent network and which broadcast a single event, simultaneously or on a delayed basis, that the originating station subsequently pays out to the other stations participating in the broadcast. These amounts paid to each participating station are part of that station's “gross income”; (« revenus bruts »)

“low-use station (works)” means a station that

• (a) broadcasts works in the repertoire of SOCAN for less than 20 per cent of its total broadcast time (excluding production music) during the reference month; and
• (b) keeps and makes available to CSI complete recordings of its last 90 broadcast days; (« station utilisant peu d'œuvres »)

“production music” means music used in interstitial programming such as commercials, public service announcements and jingles; (« musique de production »)

“reference month” means the second month before the month for which royalties are being paid; (« mois de référence »)

“simulcast” means the simultaneous, unaltered, real-time streaming of the over-the-air broadcast signal of the station, or of another station that is part of the same network as the station, via the Internet or other similar computer network; (« diffusion simultanée »)

“year” means a calendar year. (« année »)

Application

3. (1) This tariff sets the royalties to be paid each month by commercial radio stations

• (a) in connection with the over-the-air broadcasting operations of a station, to reproduce in Canada musical works in the repertoire of CMRRA or SODRAC; and
• (b) in connection with a simulcast, to reproduce in Canada musical works in the repertoire of CMRRA or SODRAC.

(2) This tariff does not authorize

• (a) the use of any reproduction made pursuant to subsection (1) in association with a product, service, cause or institution; or
• (b) any use covered by other tariffs.

Royalties

4. A low-use station (works) shall pay, on its gross income for the reference month, 0.135 per cent of the station's first $625,000 gross income in a year, 0.259 per cent of the station's next $625,000 gross income in a year and 0.434 per cent on the rest.

5. Except as provided in section 4, a station shall pay, on its gross income for the reference month, 0.304 per cent of the station's first $625,000 gross income in a year, 0.597 per cent of the station's next $625,000 gross income in a year and 1.238 per cent on the rest.

6. For the purposes of determining royalties payable under sections 4 and 5, where two or more stations are owned by the same company, the station shall pay royalties based on the total combined gross income for the year of all of the stations owned by the company.

7. All royalties are exclusive of any federal, provincial or other governmental taxes or levies of any kind.

Administrative Provisions

8. No later than the first day of each month, a station shall

• (a) pay the royalties for that month;
• (b) report the station's gross income for the reference month; and
• (c) provide to CSI, for the reference month, the gross income from any simulcast, as well as the number of listeners and listening hours or, if not available, any other available indication of the extent of the listeners' use of simulcast.

9. At any time during the period set out in subsection 10(2), CSI may require the production of any contract granting rights referred to in paragraph (c) of the definition of “gross income,” together with the billing or correspondence relating to the use of these rights by other parties.

Information on Repertoire Use

10. (1) No later than the 14th day of each month, a station shall provide to CSI a sequential list of all musical works it broadcast during the previous month. Each entry shall include the following information:

• (a) the date of the broadcast;
• (b) the time of the broadcast;
• (c) the title of the work;
• (d) the title of the album;
• (e) the catalogue number of the album;
• (f) the track number on the album;
• (g) the record label;
• (h) the name of the author and composer of the work;
• (i) the name of all performers or the performing group;
• (j) the duration of the sound recording in which the musical work is embodied, in minutes and seconds;
• (k) the duration of that sound recording as listed on the album, in minutes and seconds;
• (l) the Universal Product Code (UPC) of the album;
• (m) the International Standard Recording Code (ISRC) of the sound recording;
• (n) the type of usage (feature, theme, background, etc.); and
• (o) the cue sheets for all syndicated programming, inserted into the Excel report.

(2) The information set out in subsection (1) shall be provided electronically, in Excel format or in any other format agreed upon by CSI and the station, with a separate field for each item of information required in paragraphs 1(a) through (o).

Records and Audits

11. (1) A station shall keep and preserve, for a period of six months after the end of the month to which they relate, records from which the information set out in subsection 10(1) can be readily ascertained.

(2) A station shall keep and preserve, for a period of six years after the end of the year to which they relate, records from which the information set out in paragraphs 8(b) and (c) can be readily ascertained.

(3) CSI may audit these records at any time during the period set out in subsection (1) or (2), on reasonable notice and during normal business hours.

(4) CSI shall, upon receipt, supply a copy of the report of the audit to the station that was the object of the audit.

(5) If an audit discloses that royalties due have been understated in any month by more than 10 per cent, the station shall pay the reasonable costs of the audit within 30 days of the demand for such payment.

Confidentiality

12. (1) Subject to subsections (2) and (3), CSI, CMRRA and SODRAC shall treat in confidence information received pursuant to this tariff, unless the station consents in writing to the information being treated otherwise.

(2) Information referred to in subsection (1) may be shared

• (a) amongst CSI, SODRAC and CMRRA;
• (b) with any other collective in Canada that has secured a certified tariff applicable to commercial radio stations;
• (c) with the Copyright Board;
• (d) in connection with proceedings before the Board, if the station had the opportunity to request a confidentiality order;
• (e) to the extent required to effect the distribution of royalties, with royalty claimants; or
• (f) if ordered by law.

(3) Subsection (1) does not apply to information that is publicly available, or to information obtained from someone other than the station and who is not under an apparent duty of confidentiality to the station.

Adjustments

13. Adjustments in the amount of royalties owed (including excess payments), as a result of the discovery of an error or otherwise, shall be made on the date the next royalty payment is due.

Interest on Late Payments and Reporting

14. (1) In the event that a station does not pay the amount owed under paragraph 8(a) or provide the reports required by paragraphs 8(b) or (c) by the due date, the station shall pay to CSI interest calculated on the amount owed from the due date until the date both the amount and the report are received by CSI. Interest shall be calculated daily, at a rate equal to one per cent above the Bank Rate effective on the last day of the previous month (as published by the Bank of Canada). Interest shall not compound.

(2) In the event that a station does not provide the information required by subsection 10(1) by the due date, the station shall pay to CSI a late fee of $50.00 per day from the due date until the date the required information is received by CSI.

Addresses for Notices, etc.

15. (1) Anything addressed to CSI shall be sent to Tower B, Suite 1010, 1470 Peel Street, Montréal, Quebec H3A 1T1, email: csi@cmrrasodrac.ca, fax number: 514-845-3401, or to any other address, email address or fax number of which a station has been notified in writing.

(2) Anything addressed to a station shall be sent to the last address, email address or fax number of which CSI has been notified in writing.

Delivery of Notices and Payments

16. (1) A notice may be delivered by hand, by postage-paid mail, by email or by fax. A payment must be delivered by hand or by postage-paid mail.

(2) Information set out in paragraphs 8(b) and (c) and subsection 10(1) shall be sent by email.

(3) Anything mailed in Canada shall be presumed to have been received four business days after the day it was mailed.

(4) Anything sent by fax or by email shall be presumed to have been received the day it was transmitted.

STATEMENT OF ROYALTIES TO BE COLLECTED BY CMRRA-SODRAC INC. ON BEHALF OF THE SOCIETY FOR THE REPRODUCTION RIGHTS OF AUTHORS, COMPOSERS AND PUBLISHERS IN CANADA (SODRAC) AND SODRAC 2003 INC. (HEREINAFTER JOINTLY “SODRAC”) AND THE CANADIAN MUSICAL REPRODUCTION RIGHTS AGENCY (CMRRA), FOR THE REPRODUCTION OF MUSICAL WORKS IN THE REPERTOIRE OF SODRAC OR CMRRA BY NON-COMMERCIAL RADIO STATIONS FOR 2015

Short Title

1. This tariff may be cited as the CMRRA-SODRAC Inc. Non-Commercial Radio Tariff, 2015.

Definitions

2. In this tariff,

“copy” means any format or material form on or in which a musical work in the repertoire is fixed by a non-commercial radio station by any known or to be discovered process; (« copie »)

“gross operating costs” means all direct expenditures of any kind and nature (whether in money or other form) incurred by the non-commercial radio station or on its behalf in connection with the products and services that are subject to the licence covered by this tariff; (« dépenses brutes d'opération »)

“network” means a network within the meaning of the Regulations Prescribing Networks (Copyright Act), SOR/99-348, Canada Gazette, Part II, Vol. 133, No. 19, p. 2166; (« réseau »)

“non-commercial radio station” means any AM or FM radio station other than a Canadian Broadcasting Corporation radio station, licensed under the Broadcasting Act, S.C. 1991, c. 11, by the Canadian Radio-television and Telecommunications Commission as a station owned or operated by a not-for-profit corporation or organization, whether or not any part of its gross operating costs is funded by advertising revenues, including any station that is owned or operated on a not-for-profit basis, or any AM or FM radio station owned or operated by a similar corporation or organization, whether or not this corporation or organization holds a licence from the Canadian Radio-television and Telecommunications Commission; (« station de radio non commerciale »)

“repertoire” means the musical works in SODRAC's or CMRRA's repertoire; (« répertoire »)

“reproduction” means the fixation of a musical work by any known or to be discovered process, in any format or material form, including the fixation on the random access memory (RAM) or hard disk of a computer; (« reproduction »)

“simulcasting” means the simultaneous, unaltered, real-time streaming of the over-the-air broadcast signal of the station, or of another station that is part of the same network as the station, via the Internet or other similar computer network; (« diffusion simultanée »)

“year” means a calendar year. (« année »)

Application

3. (1) In consideration of the payment of the royalties set out in section 4 of this tariff, and in consideration of the other terms and conditions set out therein, CMRRA-SODRAC Inc. grants to a non-commercial radio station, a non-exclusive, non-transferable licence for the duration of this tariff, authorizing the reproduction, as often as desired during the term of the licence, of the musical works in the repertoire by a conventional, over-the-air non-commercial radio station and the use of copies resulting from such reproduction for its radio broadcasting purposes, including simulcasting.

(2) The licence does not authorize the use of any copy made pursuant to subsection (1) in association with a product, service, cause or institution.

(3) This tariff does not apply to

• (a) any non-commercial audio service that is not a conventional, over-the-air radio broadcasting service; or
• (b) transmissions, other than simulcasts, of a musical work in the repertoire on a digital communication network, such as via the Internet.

Royalties

4. (1) In consideration of the licence granted in accordance with section 3 above by CMRRA-SODRAC Inc., the annual royalties payable to CMRRA-SODRAC Inc. by a non-commercial radio station shall be as follows:

• (a) 0.20 per cent of the station's first $625,000 of gross operating costs in the year for which the royalties are being paid, 0.39 per cent of the station's next $625,000 of such costs and 0,59 per cent on the rest of such costs.

(2) All royalties payable under this tariff are exclusive of any federal, provincial or other governmental taxes or levies of any kind.

Payments, Accounts and Records

5. (1) Royalties payable by a non-commercial radio station to CMRRA-SODRAC Inc. for each calendar year shall be due on the 31st day of January of the year following the calendar year for which the royalties are being paid.

(2) With each payment, a non-commercial radio station shall forward to CMRRA-SODRAC Inc. a written, certified declaration of the actual gross operating costs of the non-commercial radio station for the year for which the payment is made.

(3) Upon receipt of a written request from CMRRA-SODRAC Inc., a non-commercial radio station shall provide to CMRRA-SODRAC Inc. with respect to all musical works broadcast by the station during the days selected by CMRRA-SODRAC Inc. the title of the musical work, the name of the author and composer of the work, the name of the performers or of the performing group, the title of the record album, the record label, the date and time of broadcast and, where available, the Universal Product Code (UPC) and the International Standard Recording Code (ISRC) of the record from which the musical work is taken. CMRRA-SODRAC Inc. must give 30 days' notice for such a request and may formulate such a request no more than once a year, each time for a period of 12 days, which may not necessarily be consecutive. The noncommercial radio station shall then forward the information requested to CMRRA-SODRAC Inc., in electronic format where possible or in writing, within 15 days of the last day of the period indicated in CMRRA-SODRAC Inc.'s request.

(4) A non-commercial radio station that pays less than $2,000 per year in royalties will be required to submit the information described in subsection (3) for a period of only four days, which may not necessarily be consecutive.

(5) A non-commercial radio station shall keep and preserve, for a period of six months after the end of the period to which they relate, records from which the information set out in subsection (3) can be readily ascertained.

(6) A non-commercial radio station shall keep and preserve, for a period of six years after the end of the year to which they relate, records from which the information set out in subsection (2) can be readily ascertained.

(7) CMRRA-SODRAC Inc. may audit these records at any time during the period set out in subsections (5) and (6), on reasonable notice and during normal business hours.

(8) CMRRA-SODRAC Inc. shall, upon receipt of a report of an audit, supply a copy of the report to the non-commercial radio station that was the object of the audit.

(9) If an audit discloses that royalties due to CMRRA-SODRAC Inc. have been understated in any year by more than 10 per cent, the non-commercial radio station that was the object of the audit shall pay the reasonable costs of the audit within 30 days of the demand for such payment.

(10) Any amount not received by the due date shall bear interest from that date until the date the amount is received. Interest shall be calculated daily, at a rate equal to one per cent above the Bank Rate effective on the last day of the previous month (as published by the Bank of Canada). Interest shall not compound.

(11) Adjustments in the amount of royalties owed (including excess payments), as a result of the discovery of an error or otherwise, shall be made within 30 days following the conclusion of an agreement to this effect with CMRRA-SODRAC Inc.

Confidentiality

6. (1) Subject to subsections (2) and (3), CMRRA-SODRAC Inc., SODRAC and CMRRA shall treat in confidence information received from a non-commercial radio station pursuant to this tariff, unless the non-commercial radio station consents in writing to the information being treated otherwise.

(2) CMRRA-SODRAC Inc., SODRAC and CMRRA may share information referred to in subsection (1)

• (a) amongst themselves;
• (b) with the Copyright Board;
• (c) in connection with proceedings before the Board;
• (d) to the extent required to effect the distribution of royalties, with its royalty claimants; or
• (e) if ordered by law or by a court of law.

(3) Subsection (1) does not apply to information that is publicly available, or to information obtained from someone other than the non-commercial radio station and who is not under an apparent duty of confidentiality to that non-commercial radio station.

Delivery of Notices and Payments

7. (1) All notices and payments to CMRRA-SODRAC Inc. shall be sent to 1470 Peel Street, Tower B, Suite 1010, Montréal, Quebec H3A 1T1, email: csi@cmrrasodrac.ca, fax number: 514-845-3401, or to any other address or fax number of which the non-commercial radio station has been notified in writing.

(2) All communications from CMRRA-SODRAC Inc. to a non-commercial radio station shall be sent to the last address or fax number provided in writing by that non-commercial radio station to CMRRA-SODRAC Inc.

(3) A communication or a notice may be delivered by hand, by postage-paid mail or by fax. A payment must be delivered by hand or by postage-paid mail.

(4) All communications, notices or payments mailed in Canada shall be presumed to have been received four business days after the day they were mailed. All communications or notices sent by fax shall be presumed to have been received the day they were transmitted.

STATEMENT OF ROYALTIES TO BE COLLECTED BY CMRRA-SODRAC INC. FOR THE REPRODUCTION OF MUSICAL WORKS, IN CANADA, BY ONLINE MUSIC SERVICES IN 2015

Short Title

1. This tariff may be cited as the CSI Online Music Services Tariff, 2015.

Definitions

2. The following definitions apply in this tariff.

“bundle” means two or more digital files offered as a single product, if at least one file is a permanent download. (« ensemble »)

“CSI” means CMRRA-SODRAC Inc. (« CSI »)

“download” means a file intended to be copied onto an end user's local storage medium or device. (« téléchargement »)

“file,” except in the definition of “bundle,” means a digital file of a sound recording of a musical work. (« fichier »)

“free on-demand stream” excludes an on-demand stream provided to a subscriber. (« transmission sur demande gratuite »)

“free subscription” means the provision of free access to limited downloads or on-demand streams to a subscriber. (« abonnement gratuit »)

“gross revenue” means the aggregate of (a) all revenues payable by or on behalf of end users for access to streams or downloads delivered by an online music service or its authorized distributors, including membership, subscription and other access fees; (b) all other revenues payable to an online music service or its authorized distributors in respect of the online music service, including amounts paid for advertising, product placement, promotion and sponsorship, and commissions on third-party transactions; and (c) amounts equal to the value of the consideration received by an online music service or its authorized distributors pursuant to any contra and barter agreements related to the operation of the online music service. (« revenus bruts »)

“identifier” means the unique identifier an online music service assigns to a file or bundle. (« identificateur »)

“interactive webcast” means a webcast in which individual end users are able to influence the selection of the musical works delivered specifically to them. (« webdiffusion interactive »)

“limited download” means a download that uses technology that causes the file to become unusable upon the happening of a certain event. (« téléchargement limité »)

“music cloud service” means an online music service that (a) permits or requires an end user to copy files onto a remote server for later access by that end user only as a download and/or a stream; and/or (b) identifies files in an end user's local digital music collection and makes copies of those files available on a remote server for access by that end user as downloads and/or streams. (« service de musique nuagique »)

“non-interactive webcast” means a webcast in which individual end users are not able to influence the selection of the musical works delivered to them. (« webdiffusion non interactive »)

“non-subscriber” means an end user other than a subscriber, and includes an end user who receives limited downloads or on-demand streams from an online music service subject to the requirement that advertising be viewed or listened to. (« non-abonné »)

“on-demand stream” means a stream selected by its recipient. (« transmission sur demande »)

“online music service” means a service that delivers on-demand streams, limited downloads, permanent downloads and/or webcasts to end users, including a music cloud service. (« service de musique en ligne »)

“permanent download” means a download other than a limited download. (« téléchargement permanent »)

“play” means the single performance of a stream or a limited download. (« écoute »)

“quarter” means from January to March, from April to June, from July to September and from October to December. (« trimestre »)

“repertoire” means the musical works for which CSI is entitled to grant a licence pursuant to section 3. (« répertoire »)

“stream” means a file that is intended to be copied onto a local storage medium or device only to the extent required to allow listening to the file at substantially the same time as when the file is transmitted. (« transmission »)

“subscriber” means an end user with whom an online music service or its authorized distributor has entered into a contract for service other than on a transactional per-download or per-stream basis, for a fee, for other consideration or free of charge, including pursuant to a free subscription. (« abonné »)

“unique visitor” means each end user, excluding a subscriber, who receives a free on-demand stream from an online music service in a month. (« visiteur unique »)

“webcast” means the continuous delivery of streams of audio programming, excluding on-demand streams, consisting in whole or in part of sound recordings of musical works, which programming may be themed by genre or otherwise, and for which the end user does not have advance knowledge of, or control over, the sequence or the timing of delivery of the musical works included in the program. (« webdiffusion »)

Application

3. (1) This tariff entitles an online music service that complies with this tariff, and its authorized distributors,

• (a) to reproduce all or part of a musical work in the repertoire for the purpose of transmitting it in a file to end users in Canada via the Internet or another similar computer network, including by wireless transmission;
• (b) to authorize a person to reproduce the musical work for the purpose of delivering to the service a file that can then be reproduced and transmitted pursuant to paragraph (a); and
• (c) to authorize end users in Canada to further reproduce the musical work for their own private use,

in connection with the operation of the service.

(2) This tariff does not apply to activities subject to the Satellite Radio Services Tariff or the Commercial Radio Tariff.

4. (1) This tariff does not authorize the reproduction of a work in a medley, for the purpose of creating a mashup, for use as a sample or, subject to subsection 3(2), in association with a product, service, cause or institution.

(2) This tariff does not entitle the owner of the copyright in a sound recording of a musical work to authorize the reproduction of that work.

ROYALTIES

Webcasts

5. (1) Subject to subsection (3), the royalties payable in a month by any online music service that offers non-interactive webcasts, but does not offer interactive webcasts, on-demand streams, or limited downloads, shall be 3.24 per cent of the gross revenue from the service for the month, excluding amounts paid by end users for permanent downloads, subject to a minimum of 0.018¢ for each play of a file.

(2) Subject to subsection (4), the royalties payable in a month by any online music service that offers interactive webcasts, but does not offer on-demand streams or limited downloads, shall be 6.22 per cent of the gross revenue from the service for the month, excluding amounts paid by end users for permanent downloads, subject to a minimum of 0.035¢ for each play of a file.

(3) The royalties payable in a month by any online music service that offers non-interactive webcasts, but does not offer on-demand streams or limited downloads, and permits an end user to copy all or part of a webcast onto a local storage medium or device for later access, shall be,

• (a) if SOCAN is entitled to collect royalties for limited downloads, 6.68 per cent of the gross revenue from the service for the month, excluding amounts paid by end users for permanent downloads, subject to a minimum of 0.037¢ for each play of a file; and
• (b) otherwise, 8.42 per cent of the gross revenue from the service for the month, excluding amounts paid by end users for permanent downloads, subject to a minimum of 0.047¢ for each play of a file.
  

(4) The royalties payable in a month by any online music service that offers interactive webcasts, but does not offer on-demand streams or limited downloads, and permits an end user to copy all or part of a webcast onto a local storage medium or device for later access, shall be,

• (a) if SOCAN is entitled to collect royalties for limited downloads, 12.83 per cent of the gross revenue from the service for the month, excluding amounts paid by end users for permanent downloads, subject to a minimum of 0.072¢ for each play of a file; and
• (b) otherwise, 16.17 per cent of the gross revenue from the service for the month, excluding amounts paid by end users for permanent downloads, subject to a minimum of 0.090¢ for each play of a file.
  

On-Demand Streams

(5) Subject to paragraph (11)(b), the royalties payable in a month by any online music service that offers on-demand streams — with or without webcasts — but does not offer limited downloads shall be

A × B
C

where

• (A) is 5.39 per cent of the gross revenue from the service for the month, excluding amounts paid by end users for permanent downloads;
• (B) is the number of plays of files requiring a CSI licence during the month; and
• (C) is the number of plays of all files during the month,

subject to a minimum equal to the greater of

• (a) 35.93¢ per subscriber; and
• (b) 0.094¢ for each play of a file requiring a CSI licence.

For clarity, if the online music service permits an end user to copy files onto a local storage medium or device for later access, the service shall pay royalties pursuant to subsection (6), not pursuant to this subsection.

Limited Downloads

(6) Subject to paragraph (11)(b), the royalties payable in a month by any online music service that offers limited downloads — with or without on-demand streams or webcasts — shall be

A × B
C

where

• (A) is 9.9 per cent of the gross revenue from the service for the month, excluding amounts paid by end users for permanent downloads;
• (B) is the number of plays of files requiring a CSI licence during the month; and
• (C) is the total number of plays of files during the month,

subject to a minimum equal to the greater of

• (a) 99¢ per subscriber; and
• (b) 0.17¢ for each play of a file requiring a CSI licence.

Where a service does not report to CSI the number of plays of files as limited downloads, (B) will be deemed to equal either (a) the number of plays of the same sound recording as an on-demand stream during the month, or (b) if the sound recording has not been played as an on-demand stream during the month, the average number of plays of all sound recordings as on-demand streams during the month.

Free On-Demand Streams

(7) Subject to paragraph (11)(a), the royalties payable for free on-demand streams shall be the lesser of 35.93¢ per unique visitor per month and 0.094¢ per free on-demand stream requiring a CSI licence received by that unique visitor in that month.

Permanent Downloads

(8) Subject to paragraph (11)(b), the royalties payable in a month by any online music service that offers only permanent downloads shall be

A × B
C

where

• (A) is 9.9 per cent of the gross revenue from the service for the month;
• (B) is the number of permanent downloads requiring a CSI licence during the month; and
• (C) is the total number of permanent downloads during the month,

subject to a minimum of 3.92¢ per permanent download in a bundle that contains 13 or more files and 7.6¢ per permanent download in all other cases.

(9) Subject to paragraph (11)(b), where an online music service that is required to pay royalties under any of subsections (1) to (7) or subsection (10) also offers permanent downloads, the royalty payable by the online music service for each permanent download requiring a CSI licence shall be 9.9 per cent of the amount paid by an end user for the download, subject to a minimum of 3.92¢ per permanent download in a bundle that contains 13 or more files and 7.6¢ per permanent download in all other cases.

Music Cloud Services

(10) The royalties payable in a month by any online music service that offers a music cloud service shall be 9.9 per cent of the gross revenue from the service for the month, subject to a minimum equal to the greater of

• (a) 99¢ per subscriber; and
• (b) 0.17¢ for each play of a file.

Adjustments

(11) Where CSI does not hold all the rights in a musical work,

• (a) for the purposes of subsections (7) and (9), the applicable royalty shall be the relevant rate multiplied by CSI's share in the musical work; and
• (b) for the purposes of subsections (5), (6), and (8), only the share that CSI holds shall be included in (B).
  

(12) All royalties payable under this tariff are exclusive of any bank fees and any federal, provincial or other governmental taxes or levies of any kind.

(13) For the purpose of calculating the minimum payable pursuant to subsections (5), (6), and (10), the number of subscribers shall be determined as at the end of the month in respect of which the royalties are payable.

ADMINISTRATIVE PROVISIONS

Reporting Requirements: Service Identification

6. No later than the earlier of 20 days after the end of the first month during which an online music service reproduces a file requiring a CSI licence and the day before the service first makes such a file available to the public, the service shall provide to CSI the following information:

• (a) the name of the person who operates the service, including
  • (i) the name of a corporation and a mention of its jurisdiction of incorporation,
  • (ii) the name of the proprietor of an individual proprietorship,
  • (iii) the name of each partner of a partnership, and
  • (iv) the names of the principal officers of any other service,
• together with any other trade name under which the service carries on business;
• (b) the address of its principal place of business;
• (c) the name, address and email of the persons to be contacted for the purposes of notice and, if different from that name, address and email, for the payment of royalties, the provision of information pursuant to subsection 18(2) and any inquiries related thereto;
• (d) the name and address of any authorized distributor;
• (e) the Uniform Resource Locator (URL) of each website at or through which the service is or will be offered; and
• (f) if the service offers webcasts, an indication of whether the webcasts offered are interactive, non-interactive or both.
  

Sales Reports

Definition

7. (1) In this section, “required information” means, in respect of a file,

• (a) its identifier;
• (b) the title of the musical work;
• (c) the name of each performer or group to whom the sound recording is credited;
• (d) the name of the person who released the sound recording;
• (e) if the online music service believes that a CSI licence is not required, information that establishes why the licence is not required;
• (f) the name of each author of the musical work;
• (g) the International Standard Recording Code (ISRC) assigned to the sound recording;
• (h) if the sound recording was released in physical format as part of an album, the name, identifier, product catalogue number and Universal Product Code (UPC) assigned to the album, together with the associated disc and track numbers;

and, if available,

• (i) the name of the music publisher associated with the musical work;
• (j) the International Standard Musical Work Code (ISWC) assigned to the musical work;
• (k) the Global Release Identifier (GRid) assigned to the file and, if applicable, the GRid of the album or bundle in which the file was released;
• (l) the running time of the file, in minutes and seconds; and
• (m) any alternative title used to designate the musical work or sound recording.

Webcasts

(2) No later than 20 days after the end of each month, any online music service that is required to pay royalties pursuant to subsection 5(1), (2), (3) or (4) shall provide to CSI a report setting out, for that month,

• (a) in relation to each file that was delivered to an end user, the required information;
• (b) the total number of plays of each file;
• (c) the total number of plays of all files;
• (d) the extent of use of the service during the month, including the number of end users who used the service and the total hours of listening; and
• (e) the gross revenue from the service for the month.

On-Demand Streams

(3) No later than 20 days after the end of each month, any online music service that is required to pay royalties pursuant to subsection 5(5) shall provide to CSI a report setting out, for that month,

• (a) in relation to each file that was delivered to an end user, the required information;
• (b) the total number of plays of each file as an on-demand stream and, separately, in webcasts (if applicable);
• (c) the total number of plays of all files as on-demand streams and, separately, in webcasts (if applicable);
• (d) the number of subscribers to the service during the month and the total amounts paid by them during that month;
• (e) the number of plays by non-subscribers and the total amounts paid by them during that month;
• (f) the gross revenue from the service for the month;
• (g) if the service has engaged in any promotional programs during the month pursuant to which files have been delivered to end users free of charge, details of those programs; and
• (h) the number of subscribers provided with free subscriptions and the total number of plays of all files by such subscribers as on-demand streams and, separately, in webcasts (if applicable).

Limited Downloads

(4) No later than 20 days after the end of each month, any online music service that is required to pay royalties pursuant to subsection 5(6) shall provide to CSI a report setting out, for that month,

• (a) in relation to each file that was delivered to an end user, the required information;
• (b) the number of limited downloads of each file;
• (c) the number of limited downloads of all files;
• (d) the total number of plays of each file as limited downloads and, separately, as on-demand streams and in webcasts (each as applicable);
• (e) the total number of plays of all files as limited downloads and, separately, as on-demand streams and in webcasts (each as applicable);
• (f) the number of subscribers to the service during the month and the total amounts paid by them during that month;
• (g) the number of plays by non-subscribers and the total amounts paid by them during that month;
• (h) the gross revenue from the service for the month;
• (i) if the service or any authorized distributor has engaged in any promotional programs during the month pursuant to which limited downloads have been provided to end users free of charge, details of those programs; and
• (j) the number of subscribers provided with free subscriptions, the total number of limited downloads provided to such subscribers, and the total number of plays of all files by such subscribers as limited downloads and, separately, as on-demand streams and in webcasts (each as applicable).

Free On-Demand Streams

(5) No later than 20 days after the end of each month, any online music service that is required to pay royalties pursuant to subsection 5(7) shall provide to CSI a report setting out, for that month,

• (a) in relation to each file that was delivered as a free on-demand stream, the required information;
• (b) the number of plays of each file as a free on-demand stream;
• (c) the total number of plays of all files as free on-demand streams;
• (d) the number of unique visitors;
• (e) a description of the manner in which each unique visitor is identified; and
• (f) the number of free on-demand streams provided to each unique visitor.

Permanent Downloads

(6) No later than 20 days after the end of each month, any online music service that is required to pay royalties pursuant to subsection 5(8) or (9) shall provide to CSI a report setting out, for that month,

• (a) in relation to each file that was delivered as a permanent download:
  • (i) the required information,
  • (ii) the number of times the file was downloaded as part of a bundle, the identifier of each such bundle, the number of files included in each such bundle, the amount paid by end users for each such bundle, the share of that amount assigned by the service to the file, and a description of the manner in which that share was assigned, and
  • (iii) the number of other permanent downloads of the file and the amounts paid by end users for the file, including, if the file is offered as a permanent download at different prices from time to time, the number of permanent downloads delivered at each different price;
• (b) the total amount paid by end users for bundles;
• (c) the total amount paid by end users for permanent downloads;
• (d) the total number of permanent downloads supplied; and
• (e) if the service or any authorized distributor has engaged in any promotional programs during the month, pursuant to which permanent downloads have been delivered to end users free of charge, details of those programs.

(7) An online music service that is required to pay royalties pursuant to more than one subsection of section 5 shall file a separate report pursuant to each subsection of this section.

(8) Whenever a service is required to report its gross revenue for a month, it shall include, separately — and in addition to any other information specifically required by the relevant subsection — the amount of revenue received from subscribers, the amount received from non-subscribers, the amount received from advertisers, the amount attributable to sponsorships, and the amounts received from each additional revenue source.

Music Cloud Service

(9) No later than 20 days after the end of each month, any online music service that is required to pay royalties pursuant to subsection 5(10) shall provide to CSI a report setting out, for that month,

• (a) in relation to each file that was accessed as a download or a stream from the music cloud service, the required information;
• (b) the total number of downloads of each file accessed from the music cloud service;
• (c) the total number of downloads of all files accessed from the music cloud service;
• (d) the total number of plays of each stream accessed from the music cloud service;
• (e) the total number of plays of all streams accessed from the music cloud service;
• (f) the number of subscribers to the music cloud service during the month and the total amounts paid by them during that month;
• (g) the gross revenue from the music cloud service for the month;
• (h) if the service has engaged in any promotional programs during the month pursuant to which access to the cloud service has been provided to end users free of charge, details of those programs; and
• (i) the number of subscribers provided with free subscriptions, the total number of downloads accessed by such subscribers, and the total number of plays of files by such subscribers as streams.

Calculation and Payment of Royalties

8. No later than 20 days after receiving a report pursuant to subsections 7(3), (4), (5), or (6) for the last month in a quarter, CSI shall provide to the online music service a detailed calculation of the royalties payable for that quarter for each file and a report setting out

• (a) which files contain a work that it then knows to be in the repertoire;
• (b) which files contain a work that it then knows not to be in the repertoire;
• (c) which files contain a work that it then knows to be in the repertoire only as to a fraction of the rights, with an indication of that fraction; and
• (d) with respect to all other files, an indication of the reason for which CSI is unable to provide an answer pursuant to paragraphs (a), (b) or (c).

9. (1) Royalties payable pursuant to subsections 5(1) to (4) or 5(10) shall be due no later than 20 days after the end of each quarter.

(2) Royalties payable pursuant to subsections 5(5) to (9) shall be due no later than 30 days after an online music service receives a report pursuant to section 8.

Repertoire Disputes

10. (1) An online music service that disputes the indication that a file contains a work in the repertoire or requires a CSI licence shall provide to CSI information that establishes why the licence is not required, unless the information was provided earlier.

(2) An online music service that disputes the indication more than 20 days after receiving a report pursuant to paragraph 8(a) or (c) is not entitled to interest on the amounts owed to it.

Adjustments

11. Adjustments to any information provided pursuant to sections 6 to 8 or 10 shall be provided with the next report dealing with such information.

12. (1) Subject to subsection (2), adjustments in the amount of royalties owed, including excess payments, as a result of the discovery of an error or otherwise, shall be made on the date the next royalty payment is due.

(2) Any excess payment resulting from an online music service providing incorrect or incomplete information about a file shall be deducted from future amounts owed for the use of works owned by the same person as the work in that file.

Records and Audits

13. (1) An online music service shall keep and preserve, for a period of six years after the end of the month to which they relate, records from which the information set out in sections 6, 7, 10 and 11 can be readily ascertained.

(2) CSI may audit these records at any time during the period set out in subsection (1) on reasonable notice and during normal business hours.

(3) Subject to subsection (4), if an audit discloses that royalties due have been understated in any quarter by more than 10 per cent, the online music service shall pay the reasonable costs of the audit within 30 days of the demand for such payment.

(4) For the purposes of subsection (3), any amount owing as a result of an error or omission on the part of CSI shall not be taken into account.

Breach and Termination

14. (1) An online music service that fails to provide any report required by section 7 within five business days of the date on which the report is required, or to pay royalties within five business days of the date on which the royalties are due, is not entitled to do any of the acts described in section 3 as of the first day of the month in respect of which the report should have been provided or the quarter in respect of which the royalties should have been paid, as the case may be, and until the report is provided and the royalties and any accrued interest are paid.

(2) An online music service that fails to comply with any other provision of this tariff is not entitled to do any of the acts described in section 3 five business days after CSI has notified the service in writing of that failure and until the service remedies that failure.

(3) An online music service that becomes insolvent, commits an act of bankruptcy, makes an assignment for the benefit of its creditors, files for protection under the Companies Creditors Arrangement Act or other comparable legislation in another jurisdiction, winds up its affairs, ceases to carry on business, or has a receiver/manager appointed for it or for a substantial part of its property, is not entitled to do any of the acts described in section 3 as of the day immediately preceding the day of the relevant occurrence.

Confidentiality

15. (1) Subject to subsections (2) and (3), CSI, SODRAC and CMRRA shall treat in confidence information received pursuant to this tariff, unless the disclosing party consents in writing to the information being treated otherwise.

(2) Information referred to in subsection (1) may be shared

• (a) amongst CSI, SODRAC or CMRRA;
• (b) in connection with the collection of royalties or the enforcement of a tariff, with SOCAN;
• (c) with the Copyright Board;
• (d) in connection with proceedings before the Board, once the online music service has had a reasonable opportunity to request a confidentiality order;
• (e) with any person who knows or is presumed to know the information;
• (f) to the extent required to effect the distribution of royalties, with royalty claimants; and
• (g) if ordered by law.

(3) Subsection (1) does not apply to information that is publicly available, or to information obtained from someone other than an online music service or its authorized distributors and who is not under an apparent duty of confidentiality to the service.

Interest on Late Payments

16. (1) Subject to subsections (3) and (4), any amount not received by the due date shall bear interest from that date until the date the amount is received.

(2) Any overpayment resulting from an error or omission on the part of CSI shall bear interest from the date of the overpayment until the overpayment is refunded.

(3) For the purposes of this section, a report provided pursuant to section 8 following the late reception of a report required pursuant to section 7 is deemed to have been received within the time set out in section 8 provided that, after receiving the late report required pursuant to section 7, CSI provides the corresponding report required pursuant to section 8 no later than the date on which the next report required pursuant to section 8 is due.

(4) Any amount owing as a result of an error or omission on the part of CSI shall not bear interest until 30 days after CSI has corrected the error or omission.

(5) Interest shall be calculated daily, at a rate equal to one per cent above the Bank Rate effective on the last day of the previous month (as published by the Bank of Canada). Interest shall not compound.

(6) In the event that an online music service does not provide the information required by section 7 by the due date, the online music service shall pay to CSI a late fee of $50.00 per day from the due date until the date the required information is received by CSI.

Addresses for Notices, etc.

17. (1) Anything that an online music service sends to CSI shall be sent to 1470 Peel Street, Tower B, Suite 1010, Montréal, Quebec H3A 1T1, email: csi@cmrrasodrac.ca, fax: 514-845-3401, or to any other address, email address or fax number of which the service has been notified in writing.

(2) Anything that CSI sends to an online music service shall be sent to the last address, email address or fax number of which CSI has been notified in writing.

Delivery of Notices and Payments

18. (1) Subject to subsection (2), a notice may be delivered by hand, by postage-paid mail, by fax, by email or by File Transfer Protocol (FTP). A payment must be delivered by hand, by postage-paid mail, or as otherwise agreed upon by CSI and the online music service.

(2) Information provided pursuant to sections 6 to 8 and to subsection 10(1) shall be delivered electronically, by way of a delimited text file or in any other format agreed upon by CSI and the online music service.

(3) A notice or payment mailed in Canada shall be presumed to have been received four business days after the day it was mailed.

(4) A notice sent by fax, by email or by FTP shall be presumed to have been received the day it is transmitted.

(5) All amounts required to be reported or paid under this tariff shall be reported or paid in Canadian dollars.