SOCAN sues Maple Leaf Sport & Entertainment Ltd.

[hamilton]

This ties in nicely with several other threads that I've seen here lately.

From www.thestar.com :

Pay up, musicians tell ACC

Nov. 29, 2006. 01:00 AM

RICK WESTHEAD

BUSINESS REPORTER

A trade group wants concerts barred at the Air Canada Centre until the arena's owners start paying music industry dues.

The Society of Composers, Authors and Music Publishers of Canada (SOCAN) is suing Maple Leaf Sports and Entertainment Ltd. in federal court over the company's refusal to pay tariffs related to concerts staged by artists such as Placido Domingo, Kim Mitchell and rapper Lil Bow Wow.

According to Canada's Copyright Act, concert promoters are obligated to pay a tariff to SOCAN based on money generated from ticket sales.

Tariffs can be as much as 3 per cent of gross ticket sales, and much of the money paid to SOCAN by promoters is then distributed to its 80,000 members, who include composers, lyricists, songwriters and music publishers who own the copyright to the music in Canada.

SOCAN is requesting an injunction barring Maple Leaf Sports and Entertainment from holding concerts at the ACC but it's unclear when a judge might rule on that.

The trade group's allegations have not been proven in court.

In an interview, MLSE general counsel Robin Brudner argued the company isn't a concert promoter at all, merely a venue. "All we have received has been rent," Brudner said yesterday. In the instances where the company has paid SOCAN a tariff, it's been because it was directed to do so by concert promoters. "That came out of their share," she said.

Created in 1990 and sanctioned by the federal copyright regulator, SOCAN has gone to interesting lengths to collect tariffs. It has coaxed some school boards across the province to pay blanket fees to cover music that's been used at school dances and sports events. It collects fees from doctors' offices, strip clubs and restaurants and even charges companies for the right to play music over the telephone when callers are put on hold.

The dispute with MLSE, simmering since SOCAN's statement of claim was filed in December, 2004, has been quietly working its way through the discovery stage of Federal Court. SOCAN lawyer Kelly Gill expects it will be a least a year before the case will go to trial.

In its statement of claim, SOCAN listed 29 concerts dating back to 1999 on which the sports company allegedly owes tariffs. "MLSE's conduct has been deliberate and high-handed and is deserving of the court's condemnation ...," it said.

In its statement of defence, MLSE said that two concerts mentioned by SOCAN, a March 1999 date featuring V.I.P. and a February 2002 appearance by Fab U Lous with De La Soul, weren't held at the Air Canada Centre.

Moreover, MLSE wrote that operational details relating to the concerts listed by SOCAN, "were the sole responsibility of the concert promoter and/or the performer or performers."

Tony Tobias, a Toronto-based music industry consultant who has produced music videos for artists including Gordon Lightfoot and Honeymoon Suite, said most stakeholders support SOCAN's efforts, "in the same way a bank would want their collection agency to chase down someone who was in default.

"Anything else is a cost of doing business but with music, people just want us all to take a bath," said Tobias, president of Pangaea Media & Music Inc. "Stop music for a week at events and see what happens. Everybody would be at one another's throats.

"Music is society's Prozac. It's SOCAN's job to pull every penny out of every nook and cranny that it can on its behalf."

The legal dispute could represent "significant" financial exposure for a sports company that, according to its website, sold more than 325,000 tickets to 38 concerts in 2002, generating $24 million that year alone.

It's unclear how much money a judge could award SOCAN because Gill said MLSE hasn't revealed its concert revenues from the past seven years.

But under Canada's Copyright Act, if a judge were to rule in favour of SOCAN, he or she would have the option of awarding 10 times any actual monetary damages, Gill said.

That could result in an award of $50 million or more, based on the 2002 figures.

[Dr. J]

Interesting read. Thanks, Hamilton.

SOCAN may not be making many friends these days, but i agree that the channels of revenue for our musicians need to be more clearly defined. They won't win every case. That's OK. They shouldn't, but it's their job to clarify.

The question here is not whether the fee should be paid for these shows, but who should pay it. Ultimately, it comes down to who put on the concerts in question (and hence is responsible for the tariff).

Did the promoter simply rent the ACC (for a fee) and ultimately hold responsibility for the show and its profits?

Or did MLSE hire the promoter (for a fee) to stage a show for which they (MLSE) ultimately held responsibility for and collected the profits on?

MLSE is claiming it's the first. Time will tell.

[phishtaper]

friends got married at a ski lodge a couple of months ago, and I saw the rental agreement online.

Additional Charges

SOCAN (Society of Composers, Authors and Music Publishers of Canada)

Up to 100 guests - with dancing $41.13, without dancing $20.56

Over 100 guests - with dancing $59.17, without dancing $29.56

Fees apply to all events where music is enjoyed.

I thought this was pretty odd. I can understand the charges if some Canadian music is played, but how would they know? In the case of the ACC, that just seems even odder because a) they are going after the rental venue, not the promoter, etc., and can they lay claim when its an international artist, etc, and no Canadian music is played?

[Patchoulia]

Additional Charges

SOCAN (Society of Composers, Authors and Music Publishers of Canada)

Up to 100 guests - with dancing $41.13, without dancing $20.56

Over 100 guests - with dancing $59.17, without dancing $29.56

Fees apply to all events where music is enjoyed.

I'm more interested in how they know if people are dancing or not...do they have SGPs (SOCAN Groove Police) conducting spot checks on "all events where music is enjoyed" to determine whether or not people are, in fact, gettin' down?

What if I'm tapping my toe whilst awaiting a cocktail? Does that qualify as "dancing" or simply music enjoyment?

[phishtaper]

very true, Stoned. its hardly a well crafted, or defensible, document. what is "dancing"? "where music is enjoyed"? says who? overall, its a small amount, so people just pay it, i guess.

that all said, SOCAN does seem to have actually convinced the lodge to charge people, so ...

[Dr. J]

In the case of the ACC, that just seems even odder because a) they are going after the rental venue, not the promoter, etc.

What they want to know is who is responsible for the shows at the ACC - the promoter or Maple Leaf Sport & Entertainment Ltd.

can they lay claim when its an international artist, etc, and no Canadian music is played?

Good question.

[The Chameleon]

I think this is a great thing. The ACC neds to pay up.

As to the question of how they can claim if there is no Canadian music played and it's an international artist?....

The answer is two fold....

1. Socan charges a blanket fee no matter what to venues, bars, restaurants and anywhere that uses music. Then they average the intake amoungst thier members who are the producers of the lexicon of music in general. This way the do not have to ahev "SOCAN Police". This si how artist get paiod for performance royalties, that are not covered by radio...

2. They have to pay as perhaps some of the music that is being played by these "international artists" is Canadian written, canadian produced or the performance rights may have been sold to a Canadian holder.

There are many intricacies in the publishing/performance royalties dichotmy that the public never sees and hence does no understand when it comes to these issues.

Bottom line is the artists have to get paid and SOCAN represents them in a perfomance capacity...

[timouse]

Additional Charges

SOCAN (Society of Composers, Authors and Music Publishers of Canada)

Up to 100 guests - with dancing $41.13, without dancing $20.56

Over 100 guests - with dancing $59.17, without dancing $29.56

Fees apply to all events where music is enjoyed.

maybe that's why nobody in toronto dances at shows, it's all a concerted effort to save the promoters a few bucks

[Patchoulia]

Additional Charges

SOCAN (Society of Composers' date=' Authors and Music Publishers of Canada)

Up to 100 guests - with dancing $41.13, without dancing $20.56

Over 100 guests - with dancing $59.17, without dancing $29.56

Fees apply to all events where music is enjoyed.[/i']

maybe that's why nobody in toronto dances at shows, it's all a concerted effort to save the promoters a few bucks

hahahahahha..."concerted" effort...I love stuff that works on 2 levels...

[Dr. J]

Bottom line is the artists have to get paid and SOCAN represents them in a perfomance capacity...

I agree and yes with a son in the industry I have a vested interest in such a discussion, but the fact remains the same: with its limited population and vast geography, Canada has never been conducive to making a living with music. I'm sure there are lots of folks on here who know tales of those who have given it up or reduced it to a sideline simply because it wasn't financially viable.

As things evolve, SOCAN may find it will have to revise some of it's own regulations etc. So be it.

In the end, the bottom line remains the same and Chameleon has stated it very well.

[phishtaper]

They have to pay as perhaps some of the music that is being played by these "international artists" is Canadian written, canadian produced or the performance rights may have been sold to a Canadian holder.

sure, but the ambiguity of cancon aside ... perhaps? shouldn't they only have to pay when it is ? (and admittedly, yes, this would then indeed require socan police)

Bottom line is the artists have to get paid and SOCAN represents them in a perfomance capacity...

i dont think anyone is gonna argue with the intent here, but it seems that they are trying to justify charging everyone for everything that could even potentially be what they would legitimately be entitled to. what possible justification would socan have to try to collect from a performance that is clearly 100% non-cancon? say the Kiev Dance Ensemble came to perform in a local church basement (and bought their own tapes). can socan charge for that? is the assumption that there will be some canadian music played at every musical event and therefore apply a blanket charge? my ski lodge example would seem to suggest that this is the case.

so, it just becomes a performance tax.

[The Chameleon]

The Socan model is to charge for any public palce, place of business or rental where music is/will be used.

As Socan cannot be evrywhere nor is permitted into private rental spaces a blanket fee is applied.

This is the case with the Ski Lodge situation.

The hypothetical "Kiev Dance Company" situiaton you propose would not be subject as they are not renting the space for the purpose of business or entertainment. Rather they are using it for rehersal.

[Velvet]

SOCAN needs to step back a little and shake their fucking heads.

Like many areas, they'll get so effective nobody will make a cent.

I remember when the music store I work at could afford to play (read: promote) the music they sell in the store, but now that SOCAN is so efficient at gathering cash for their clients, no music gets played and cd sales have plummeted. Way to go SOCAN.

[M.O.B.E]

Im going to go hide in the darkest corner of my attic with my walkman and a carton of smokes. They will never find me.

[The Chameleon]

SOCAN needs to step back a little and shake their fucking heads.

Like many areas, they'll get so effective nobody will make a cent.

I remember when the music store I work at could afford to play (read: promote) the music they sell in the store, but now that SOCAN is so efficient at gathering cash for their clients, no music gets played and cd sales have plummeted. Way to go SOCAN.

What you should know is that every country has mirror angencies like SOCAN and they all operate in the same way.

This collections practice is universal and not of SOCANs lone design. Hell even Russia has the same set up.

Without Socan artists copywirtes will ne3ve rbe honoured or paid.

They are a nessesary service....

Edited November 29, 2006 by Guest

[Velvet]

Yes, every country has it, no they don't all work the same*. I agree that SOCAN provides a necessary service and they do a damn good job at it, but I'm just saying they should be careful they don't protect the musicians to death.

*ie In the US royalties are distributed only to the 100 top played artists annually, whereas SOCAN actually gives money where it's due.

[phishtaper]

Without Socan artists copywirtes will ne3ve rbe honoured or paid. They are a nessesary service....

well, that raises a fundamental question then. why should artists, etc. be paid every time their music is played? what part of the game changed such that artists, etc. got paid over and above actual sales of the music? yes, radio pays royalties per spin, but Roller World? the circus? a dentist's office? socan is part of a larger international system that has managed to secure revenue for past product, unlike almost every other industry. and the methods they use would appear to be heavy-handed and inequitable. what justification can be offered for charging every single dentist in the country $94.51/year to play CDs THAT THEY ALREADY BOUGHT? sounds like having the cake and eating it too, if ya ask me. besides, socan will not open its books, so who knows what's going on.

[StaggerLee]

I remember when the music store I work at could afford to play (read: promote) the music they sell in the store, but now that SOCAN is so efficient at gathering cash for their clients, no music gets played and cd sales have plummeted. Way to go SOCAN.

Sounds like your music store gained some financial benefit from playing music in the store and refused to acknowledge that. Why not kick the artists who recorded that music down a few dimes? Maybe SOCAN needs to look at updating their rates for different events and venues, but everyone else needs to recognize the musicians who make the music.

[show---whore]

I remember when the music store I work at could afford to play (read: promote) the music they sell in the store' date=' but now that SOCAN is so efficient at gathering cash for their clients, no music gets played and cd sales have plummeted. Way to go SOCAN.[/quote']

Sounds like your music store gained some financial benefit from playing music in the store and refused to acknowledge that.

sound like the band gained some financial benefit from the music store playing there cd.

thats how i read it.

Edited November 29, 2006 by Guest

[Velvet]

Store plays CD. customer hears CD, customer buys CD, store and artist make money.

Store doesn't play CD....

Plus, if the store decided to pay the artist their money for plays, they'll have to charge more for CD's, maybe just enough to stop people from making that impulse purchase.

On another point, this all started when radio switched from live musicians to records. The union was started, stations had to pay to play. Things can, however, get out of hand.

[Jakis]

Velvet's right. The other day I walked into soundscapes. Rock Plaza Central cd was playing and really enjoyed it. Asked them who it was and was told a Canadian band, rock plaza central. Picked up the cd and bought it. I would have never heard of them if the store had not played the cd.

[AD]

Rob Gordon: I will now sell four copies of "The Three EPs" by The Beta Band.

Dick: Go for it.

[Rob plays the record]

Beta Band Customer: Who is this?

Rob Gordon: The Beta Band.

Beta Band Customer: It's good.

Rob Gordon: I know.

[StaggerLee]

sound like the band gained some financial benefit from the music store playing there cd.

thats how i read it.

Sure the band benefits. But a band benefits when a radio station plays one of their tunes too. Should radio therefore have access to artists' music for free as well?

Store plays CD. customer hears CD, customer buys CD, store and artist make money.

Store doesn't play CD....

I'm certainly not suggesting that record stores stop playing music. I'm just saying that the music has economic value and the artists should be compensated for it's use. If playing music in the store is part of their marketing strategy then it should be part of the cost of doing business, regardless of what that line of business that may be.

Plus, if the store decided to pay the artist their money for plays, they'll have to charge more for CD's, maybe just enough to stop people from making that impulse purchase.

If SOCAN plans to continue pursuing revenues from sources that have long gotten a free ride then I think they have to re-examine their rates and the way they do business for sure. There has to be some negotiation with record stores, web radio, etc. I agree that SOCAN's tactics have gotten out of hand, but I do think they are entitled to pursue those revenues, they just have to be smarter about it.

Rock Plaza Central cd was playing and really enjoyed it. Asked them who it was and was told a Canadian band, rock plaza central. Picked up the cd and bought it.

Was the album "Are We Not Horses"? I've been looking for that one and haven't found it yet. I've got "The World Was Hell To Us" and really enjoy it. Good band.

[Jakis]

Yeah, it was "Are We Not Horses". Its a great cd. Maybe the best new cd I have bought this year. I bought the cd about 2 weeks ago and was lucky enough to catch them live last friday and they didnt dissapoint. I am going to have to pick up there first cd, "The World Was Hell To Us".

cheers,

Jake

[Velvet]

"Sure the band benefits. But a band benefits when a radio station plays one of their tunes too. Should radio therefore have access to artists' music for free as well?"

Well, that's what radio stations thought. The musicians went on strike and stopped recording. The radio stations buckled, companies like SOCAN were formed, and the stations payed. They still do.

"I'm certainly not suggesting that record stores stop playing music. I'm just saying that the music has economic value and the artists should be compensated for it's use. If playing music in the store is part of their marketing strategy then it should be part of the cost of doing business, regardless of what that line of business that may be."

For the record I don't work in a cd store, though the store does sell CD's as part of it's business.

Let's take a dentist's office for example. Playing music in the waiting room can't be construed as a marketing strategy, it's just being polite really. Bizarre to think that ABBA deserve their royalty for that. Frankly, if they do then I think you might want to reconsider playing music when you invite friends over.

"If SOCAN plans to continue pursuing revenues from sources that have long gotten a free ride then I think they have to re-examine their rates and the way they do business for sure. There has to be some negotiation with record stores, web radio, etc. I agree that SOCAN's tactics have gotten out of hand, but I do think they are entitled to pursue those revenues, they just have to be smarter about it."

Remember, the businesses won't be paying these royalties, their customers will. But we do agree that SOCAN is getting out of hand. One way they could be smarter is enforcing the payment rules they have for live music venues. It's very rare that Canadian venues are paying what they are supposed to.