The Neighbouring Rights Collective of Canada (“NRCC”) has proposed two new tariffs under the Copyright Act of Canada that will significantly impact Canadian businesses:

• TARIFF No. 5 – music to accompany live events (5% of admission)
• TARIFF No. 6 – music to accompany dancing ($5 multiplied by venue capacity)
• NRCC Represents performers and record companies as distinct from SOCAN which represents songwriters and therefore NRCC tariffs are in addition to SOCAN tariffs.
• The proposed tariffs are to cover the years 2008-2012 retroactively
• The Proposed tariffs have not yet been approved by the Copyright Board of Canada.
• NRCC Tariff No. 3 for use of background music is currently in effect retroactive to January 2003.

BACKGROUNDER

The Neighbouring Rights Collective of Canada (“NRCC”) has filed with the Copyright Board of Canada two new tariffs it proposes to collect retroactively effective January 1, 2008 for the use of published musical sound recordings. While SOCAN represents composers, authors and publishers of music, NRCC represents the performers and makers of sound recordings. These two proposed tariffs are in addition to NRCC’s Tariff No.3 for the Use and Supply of Background Music which is already in effect.

Tariff No. 5 would be 5% of “gross receipts” being the total amount received for admission to the event and would include ticket sales, admission fees, and cover charges (payable monthly).

“Live events” include: concerts, live entertainment, sporting events, festivals, fashion shows, conventions, receptions, plays, circuses, parades, ice shows, fireworks displays, comedy shows, magic shows, weddings, and video game events.

Tariff No. 6 “Use of Music to Accompany Dance and Fitness” (NRCC Dance and Fitness Tariff, 2008, 2012)

Tariff No. 6 would be be $5 multiplied by the venue’s capacity per month.

“Dance Venues” are any venue where music is used in public intended for the purpose of dancing or any similar activity and includes without limitation: nightclubs, dance clubs, bars, restaurants, hotels, halls, clubs, schools, campuses and adult entertainment clubs.

Tariff No. 3 – Background Music Supply and Background Music Use (NRCC Background Music Tariff, 2003-2009)

This tariff applies when background music is played from discs or from a supplier in any workplace to which the public has access, including bars, retail stores, and restaurants. Tariff No. 3 comes out to be substantially less than half of what is paid to SOCAN and is calculated either by capacity or by square footage accessible to the public and employees.

You may download the full text of the proposed tariffs at this link to the Supplement to the Canada Gazette (pdf) (see pages 66-74) and more information on the Background Music Tarriff is available at the NRCC website – including the reporting forms: www.nrdv.ca

WHAT CAN BE DONE?

The NRCC overcame significant opposition from industry groups before Tariff No. 3 was certified by the Copyright Board in October of 2006. It is important that every business potentially impacted by the proposed tariffs is informed and afforded an opportunity to ensure that their interests are being adequately represented before the Copyright Board.

The time for objecting to the proposed tariffs has technically passed and only the Hotel Association of Canada formally objected. The Copyright Board has indicated that it will still consider requests for “intervener” status for a short while longer so as to allow interested parties to provide their perspective on how the proposed tariffs will affect them.

Intervener requests are being made by some industry associations on behalf of their members. For those of you whom are so inclined, you may wish to make your own individual request to the Copyright Board,

Contact my office if you would like to learn more about the existing or proposed NRCC Tariffs or would like your legal interests represented before these tariffs are certified by the Copyright Board.

law@arenaltman.com | 604.351.9124

Business in Vancouver Article (Apr/08)

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