Canada Gazette, Part I, Volume 149, Number 24: SUPPLEMENT

June 13, 2015

COPYRIGHT BOARD

FILE: Reproduction of Performers' Performances

Statement of Proposed Royalties to Be Collected for Making Available to the Public and for the Reproduction, in Canada, of Performances Fixed in a Sound Recording by Online Music Services

In accordance with section 70.14 of the Copyright Act, the Copyright Board hereby publishes the statement of proposed royalties filed by ARTISTI, on March 31, 2015, with respect to royalties it proposes to collect, effective January 1, 2016, for making available to the public and for the reproduction, in Canada, of performances fixed in a sound recording by online music services for the years 2016 to 2018.

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 statement may file written objections with the Board, at the address indicated below, within 60 days of the publication hereof, that is no later than August 12, 2015.

Ottawa, June 13, 2015

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 BY ARTISTI FOR MAKING AVAILABLE TO THE PUBLIC AND FOR THE REPRODUCTION, IN CANADA, OF PERFORMANCES FIXED IN A SOUND RECORDING BY ONLINE MUSIC SERVICES FOR THE YEARS 2016 TO 2018

Short title

1. This tariff may be cited ARTISTI's Online Music Services Tariff (2016-2018).

Definitions and interpretation

2. The following definitions apply in this tariff:

“accompanying performer”: the role of a performer who accompanies, in the background, the principal performer. (« artiste accompagnateur »)

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

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

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

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

“free subscription”: the provision of free access to at least one limited download or one on-demand stream to a subscriber. (« abonnement gratuit »)

“identifier”: unique identification number that the online music service assigns to a file or to a bundle. (« identificateur »)

“limited download”: download that uses a technology that causes the file to become unusable when a subscription ends. (« téléchargement limité »)

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

“online music service”: a service that delivers a stream or a download to a user, other than an online service that offers only streams in which the file is selected by the service and may only be listened to at a time determined by the service and for which no advance play list is published. (« service de musique en ligne »)

“performance”: the performance of a work by a performer who has entrusted ARTISTI with the management of the copyrights covered by this tariff. (« prestation »)

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

“phonogram”: an exclusively sound-based support, in the form of a tangible object, on which a sound recording is reproduced and from which a performance may be heard. (« phonogramme »)

“play”: the single performance of an on-demand stream. (« écoute »)

“portable limited download”: limited download that uses technology that allows the subscriber to reproduce the file on a device or medium other than the device or medium to which an online music service delivered the file. (« téléchargement limité portable »)

“principal performer”: the role of the performer whose performance is in the foreground of the sound recording. (« artiste principal »)

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

“repertoire”: any sound recording incorporating a fixed performance in relation to which the management of the copyrights which are the subject of this tariff has been entrusted to ARTISTI. (« répertoire »)

“sound recording”: a recording consisting of a performance of a single work, fixed in any material form, and used notably for reproduction in the form of a phonogram. (« enregistrement sonore »)

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

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

(2) In this tariff, the masculine includes the feminine and the singular includes the plural.

Application

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

• (a) to reproduce all or part of a performance fixed in a sound recording for the purpose of transmission in a file to an end user in Canada via the Internet or another similar computer network, including by wireless transmission;
• (b) to authorize a person to reproduce the performance fixed in a sound recording for the purpose of delivering to the online music service a file that can be reproduced and transmitted pursuant to paragraph (a); and
• (c) to authorize a user in Canada to further reproduce the performance fixed in a sound recording for his own private use;

in connection with the operation of the online music service.

(2) This tariff also authorizes the online music service that complies with it as well as its authorized distributors to make available to the public performances fixed in a sound recording and to communicate them to the public, by telecommunication, such that everyone may have access to them from the place and time they choose to do so individually.

(3) This tariff sets the royalties owing to ARTISTI in relation to the acts mentioned in paragraph 3(1)(a) and subsection 3(2), the terms of payment and the reporting obligations related thereto.

4. (1) This tariff does not apply to the communication to the public by telecommunication of published sound recordings, as provided for in sections 19 and 20 of the Copyright Act.

(2) This tariff does not authorize the reproduction of a performance fixed in a sound recording in a medley, for the purpose of creating a mashup or for use as a sample.

(3) This tariff does not authorize any modification of a performance or its use in association with a product, a service, a cause or an institution.

(4) This tariff does not authorize the owner of the copyright in a sound recording to authorize the reproduction of a performance fixed in the sound recording or authorize its being made available to the public and its communication to the public, by telecommunication, such that everyone may have access thereto from the place and time they choose to do so individually.

Royalties

On-demand streams

5. (1) Subject to paragraph 5(5)(a), the royalties payable in a month by any online music service that offers on-demand streams, but not limited downloads, shall be

A × B
C

where

• (A) is 22.37 per cent of the amounts paid by subscribers for the service during the month,
• (B) is the number of plays of on-demand streams requiring an ARTISTI licence during the month, and
• (C) is the number of plays of all on-demand streams during the month,

subject to a minimum of $1.4910 per subscriber.

Limited downloads

(2) Subject to paragraph 5(5)(a), the royalties payable in a month by any online music service that offers limited downloads, with or without on-demand streams, shall be

A × B
C

where

• (A) is 24.06 per cent of the amounts paid by subscribers for the service during the month,
• (B) is the number of limited downloads requiring an ARTISTI licence during the month, and
• (C) is the total number of limited downloads during the month,

subject to a minimum of $2.6915 per subscriber if portable limited downloads are allowed and $1.7833 per subscriber if they are not.

Free on-demand streams

(3) Subject to paragraph 5(5)(b), the royalties payable for a free on-demand stream received by a unique visitor requiring an ARTISTI licence pursuant to this tariff shall be 39¢.

Permanent downloads

(4) Subject to paragraph 5(5)(b), the royalties payable for a permanent download requiring an ARTISTI licence shall be 24.06 per cent of the amount paid by a user for the download, subject to a minimum of 9.5¢ per permanent download in a bundle that contains 13 or more files and 16.7¢ per permanent download in all other cases.

Adjustments

(5) When a sound recording incorporates both a performance and the participation of a performer

• (a) for the purposes of subsections 5(1) and (2), only the share held by ARTISTI shall be included in (B), the principal performers being entitled to 80 per cent of the royalties and the accompanying performers 20 per cent; and
• (b) for the purposes of subsections 5(3) and (4), the applicable rate is the relevant rate multiplied by the share that ARTISTI holds, the principal performers being entitled to 80 per cent of the royalties and accompanying performers to 20 per cent.

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

ADMINISTRATIVE PROVISIONS

Reporting requirements: Online Music Service Identification

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

• (a) the name of the person who operates the service, including
  • (i) its legal name,
  • (ii) in the case of a business corporation, its jurisdiction of incorporation,
  • (iii) the name of the proprietor of a sole proprietorship,
  • (iv) the names of all the partners or associates of an association or company having multiples owners, and
  • (v) the names of the principal officers of any other service,
• together with any other trade name under which the service operates a business or carries out its activities;
• (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, exchange of data, and invoicing and payment;
• (d) the name and address of any authorized distributor; and
• (e) the URL of each website at or through which the service is or will be offered.

Sales reports

Definition

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

• (a) its identifier;
• (b) the title of the work performed by the performer and the name of its author;
• (c) the name and surname (and the pseudonym, as the case may be) of the performer or the name of a group of performers associated with the sound recording;
• (d) the name of the person who released the sound recording;
• (e) the International Standard Recording Code (ISRC) assigned to the sound recording;
• (f) if the online musical service believes that an ARTISTI licence is not required, the information establishing why such a licence is not required;

and, if the information is available

• (g) if the sound recording was released on a phonogram, the name, identifier, catalogue number and Universal Product Code (UPC) assigned to the phonogram, as well as the related track number;
• (h) the Global Release Identifier (GRid) assigned to the file and, if applicable, the GRid assigned to the phonogram or to the bundle in which the file was released;
• (i) the running time of the file, in minutes and seconds;
• (j) any alternative title used to designate the work performed on the sound recording; and
• (k) any alternative identification for each performer or group of performers associated with the sound recording.

On-demand streams

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

• (a) the required information for each file that was delivered as an on-demand stream;
• (b) the number of plays of each file;
• (c) the total number of plays of all files;
• (d) the number of subscribers to the service and the total amounts paid by them; and
• (e) the number of subscribers provided with free subscriptions and the total number of plays of all files by such subscribers as on-demand streams.

Limited downloads

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

• (a) the required information for each file that was delivered as a limited download or an on-demand stream;
• (b) the number of limited downloads of each file;
• (c) the total number of limited downloads;
• (d) the number of plays of each file as an on-demand stream;
• (e) the total number of plays of all files as on-demand streams;
• (f) the total number of subscribers and the total amounts paid by them; and
• (g) 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 on-demand streams.

(4) An online music service subject to subsection 7(3) that offers both portable limited downloads and other limited downloads shall report separately for each type of limited download offered.

Free on-demand streams

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

• (a) the required information for each file that was delivered as a free on-demand stream;
• (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 twenty (20) days after the end of each month, any online music service that is required to pay royalties pursuant to subsection 5(4) shall provide ARTISTI with a report setting out, for that month

• (a) with regard to each file 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 this 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 additional downloads of the file, the amounts paid by end users for the file, and if the price of the file offered as a permanent download varies from time to time, the number of permanent downloads delivered at each price;
• (b) the total amount paid by end users for bundles;
• (c) the total amount paid by end users for permanent downloads; and
• (d) the total number of permanent downloads provided.

(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.

Calculation and payment of royalties

8. No later than 180 days after receiving a report pursuant to section 7 for the last month in a quarter, ARTISTI shall provide to the online music service a detailed calculation of the royalties payable for that quarter for each file along with a report setting out

• (a) which files are made up solely of one or several performances;
• (b) which files are made up solely of one or several participations by one or several performers; and
• (c) which files are made up of
  • (i) one or several performances, and
  • (ii) one or several participations by one or several performers,
• along with an indication of the royalty percentage allocated to such performance(s); and
• (d) with regard to all other files, an indication of the reason why ARTISTI is unable to provide an answer pursuant to paragraphs (a), (b) or (c).

9. The royalties shall be due no later than thirty (30) days after an online music service receives the report pursuant to section 8.

Repertoire disputes

10. (1) An online music service that alleges that a file

• (a) contains no performances or fewer than those indicated by ARTISTI; or
• (b) does not require an ARTISTI licence;

shall provide the information that ARTISTI deems sufficient to establish that an ARTISTI licence is not required pursuant to this tariff.

(2) An online music service that disputes an indication pursuant to subsection 10(1) of this tariff more than twenty (20) days after receiving a report pursuant to paragraph 8a) or c) is not entitled to interests 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 sum that an online music service establishes, to ARTISTI's satisfaction, as being an overpayment for the performance of a given performer, shall be kept by ARTISTI and applied to future royalties owing by the online music service with respect to that performer.

Records and audits

13. (1) An online music service shall keep and preserve, for a period of six (6) 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) ARTISTI may audit these records at any time during the period set out in subsection (1) on reasonable notice and during regular business hours.

(3) If an audit reveals that royalties due have been underestimated in any quarter by more than ten (10) per cent and not as a result of any error or omission by ARTISTI, the online music service shall bear the reasonable costs for the audit.

Breach and termination

14. (1) An online music service that fails to provide any report required by section 7 within five (5) business days of the date on which the report is required, or to pay royalties within five (5) 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 or 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 as of five (5) business days after ARTISTI has notified the service in writing of such failure and until the service remedies such failure.

(3) An online music service which 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 date of the relevant occurrence.

Confidentiality

15. (1) Subject to subsections 15(2) and 15(3), ARTISTI shall maintain the confidentiality of the information received pursuant to this tariff, unless the disclosing party consents in writing to the information being treated otherwise.

(2) ARTISTI may make the information covered by paragraph (1) public by communicating same

• (a) if the online music service is in default of its obligations under this tariff;
• (b) to the Copyright Board;
• (c) to any tribunal;
• (d) to any other copyright collective or to a person for the purpose of collecting royalties or enforcing a tariff;
• (e) to a person who knows or is presumed to know the information; and
• (f) if required by law.

(3) Subsection (1) does not apply to publicly available information or information obtained from a third party who is not subject to an obligation of confidentiality in relation thereto.

Non-transferable licence

16. Licences granted pursuant to this tariff are not transferable.

Interests and penalties relating to late payments and reports

17. (1) Any amount owed pursuant to this tariff that is not received by the due date shall bear interest from that date until the date payment is received by ARTISTI. The 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) If the online music service fails to provide the reports mentioned in section 7 of this tariff within the time frame mentioned therein, it shall pay ARTISTI late payment fees of $50.00 per day as of the deadline date up until the date the reports are received by ARTISTI.

(3) For the purposes of this section, a report provided pursuant to section 8 following the late reception of a report provided pursuant to section 7 is deemed to have been received within the time frame set out in section 8 as long as ARTISTI provides this report no later than 180 days after receiving the late report.

Addresses for all communication

18. (1) Communications intended for ARTISTI are sent to the following email address: licence@artisti.ca.

(2) Communications with the online music service are sent to the last address or electronic address known or to the last known fax number of which ARTISTI has been informed in writing.

Transmission of communications and payments

19. (1) A payment owed pursuant to this tariff is made through ARTISTI's Paypal account, which is accessible via its website at www.artisti.ca.

(2) Any communication mailed in Canada is deemed to have been received four working days after the date it is mailed.

(3) Any communication sent by fax or by email is deemed to have been received on the day of transmission.