Canada Gazette, Part I, Volume 152, Number 20: COPYRIGHT BOARD

May 19, 2018

COPYRIGHT BOARD

Proposed Statement of Royalties to Be Collected for the Making Available to the Public, the Communication to the Public by Telecommunication and the Reproduction of Performances Fixed in a Sound Recording

In accordance with section 70.14 of the Copyright Act, the Copyright Board hereby publishes, as filed with the Board on April 3, 2018, the proposed statement of royalties to be collected by ARTISTI for the making available to the public, the communication to the public by telecommunication and the reproduction, in Canada, of performances fixed in a sound recording by online music services for the years 2019 to 2021.

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 statement of royalties 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 18, 2018.

Ottawa, May 19, 2018

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)

PROPOSED STATEMENT OF ROYALTIES TO BE COLLECTED BY ARTISTI FOR THE MAKING AVAILABLE TO THE PUBLIC, THE COMMUNICATION TO THE PUBLIC BY TELECOMMUNICATION AND THE REPRODUCTION, IN CANADA, OF PERFORMANCES FIXED IN A SOUND RECORDING BY ONLINE MUSIC SERVICES FOR THE YEARS 2019 TO 2021

Short Title

1. This tariff may be cited as the Online Music Services Tariff (ARTISTI 2019-2021).

Definitions

2. In this tariff,

"accompanying performer" means the role of a performer who accompanies, in the background, the principal performer; (« artiste accompagnateur »)

"audio track" means a sound recording of a musical work incorporating at least one performance or participation of a performer, and, for greater certainty, excludes a music video; (« piste sonore »)

"authorized distributor" means any person who has entered into an agreement with a licensee permitting that person to distribute the service; (« distributeur autorisé »)

"bundle" means two or more digital files offered as a single product; (« ensemble »)

"download" means the receipt by an end-user of a file from a download service and making a reproduction thereof onto a storage device whether this reproduction is permanent or becomes unusable where certain conditions are met; (« téléchargement »)

"download service" means a service that transmits to end-users a file that is intended to be copied onto a storage device and results in a durable copy of that file; (« service de téléchargement »)

"end-user" means a person who accesses an online music service, whether the person pays a fee or provides other consideration for the service or uses the service free of charge; (« utilisateur final »)

"file" except within the meaning of article 16, means a digital file of either an audio track or a music video; (« fichier »)

"free interactive webcast service" means a webcast service where the files are chosen by a unique visitor and received for free at a place and time individually chosen by that person; (« service de webdiffusion interactive gratuite »)

"gross revenue" means, in relation to an online music service, all revenues received by a licensee whether in cash, in kind, in barter or contra, including revenues received for use of the service, and revenues received for promotional activities, such as advertising, that are attributed to the operation of the service; (« revenus bruts »)

"hybrid webcast service" means a webcast service where the files transmitted to an end-user may also be copied onto a storage device for the purpose of listening to them later, and where the period for which such files are retained, or the number of files that may be so retained, or both, is limited, and established by the service; (« service de webdiffusion hybride »)

"identifier" means the unique identifier an online music service assigns to a file or bundle; (« identificateur »)

"interactive webcast service" means a webcast service where the files are chosen by the end-user and received at a place and time individually chosen by that person; (« service de webdiffusion interactive »)

"licensee" means a person that operates an online music service that is licensed under this tariff; (« titulaire de licence »)

"limited download" means a download for which the reproduction of the file received by the end-user onto a storage device becomes unusable where certain conditions are met; (« téléchargement limité »)

"limited download service" means a download service where the downloaded files, through technological means, become unusable upon the happening of a certain event or events, such as the end of the end-user's subscription; (« service de téléchargement limité »)

"mixed bundle" means a bundle that contains at least one file containing an audio track and at least one file containing a music video; (« ensemble mixte »)

"music video" means an audiovisual representation of one or more musical works, including a concert; (« vidéo de musique »)

"non-interactive webcast service" means a webcast service where the end-user exercises no control over the content nor the timing of the transmission of the files; (« service de webdiffusion non interactive »)

"online music service" means a non-interactive webcast service, a semi-interactive webcast service, an interactive webcast service whether or not it offers free interactive webcasts, a hybrid webcast service, a limited download service, or a permanent download service; (« service de musique en ligne »)

"performance" means 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 service" means a download service, but does not include a limited download service; (« service de téléchargement permanent »)

"play" means the single performance of a file by an end-user; (« écoute »)

"portable limited download" means a 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" means the role of the performer whose performance is in the foreground of the sound recording; (« artiste principal »)

"quarter" means from January to March, from April to June, from July to September and from October to December; (« trimestre »)

"repertoire" means any performance fixed in a sound recording in relation to which the management of the copyrights which are the subject of this tariff has been entrusted to ARTISTI; (« répertoire »)

"semi-interactive webcast service" means a webcast service where the end-user exercises some level of control over the content of the files, or timing of the transmission of the files, or both; (« service de webdiffusion semi-interactive »)

"service provider" means a professional service provider retained by ARTISTI to assist in the conduct of an audit or in the distribution of royalties to rights holders; (« prestataire de services »)

"sound recording" has the meaning given to it in the Copyright Act, R.S.C. 1985, c. C-42; (« enregistrement sonore »)

"subscriber" means a person who accesses an online music service, pursuant to a contract or otherwise, whether the person pays a fee or provides other consideration for the service or uses the service free of charge; (« abonné »)

"unique visitor" means a person, excluding a subscriber, who receives a free on-demand stream from an online music service in a given month; (« visiteur unique »)

"webcast service" means a service that transmits files to end-users, where the files are intended to be copied by the end-user onto a storage device only to the extent required to allow listening or viewing the contents of the file at substantially the same time as when the file is received. (« service de webdiffusion »)

Application

3. (1) This tariff entitles a licensee, and their authorized distributors, in connection with the operation of an online music service,

(2) Despite subsection (1), this tariff does not

(3) For greater certainty, this tariff

Period of Application

(4) This tariff applies to activities from January 1, 2019, to December 31, 2021.

Royalties Payable

4. (1) The royalties payable to ARTISTI by a licensee that operates

Mixed Bundles

(2) For the purposes of paragraph 4(1)(e), where an end-user pays for a mixed bundle, the amount paid by the end-user for the files containing audio tracks in the bundle shall be deemed to be

Adjustments

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

Previews

(4) Despite paragraphs 4(1)(a) to (c), a person who operates, in association with the operation of a permanent download service for audio tracks, a service identified in those paragraphs only for the purpose of providing a preview of not more than 90 seconds of an audio track by webcast is not required to pay any royalties with respect to the operation of that service.

Taxes

(5) 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: Service Identification

5. No later than the earlier of 20 days after the end of the first month during which a licensee, in connection with the operation of an online music service, communicates or reproduces a file requiring an ARTISTI licence under this tariff, or authorizes another person to do the same, and in any event before the service first makes that file available to the public, the licensee shall provide to ARTISTI the following information:

Music Use Report

Definition

6. (1) In this section, "required information" means, in respect of a file, where available,

(1.1) For certainty, information is "available" under subsection (1) if it is in the possession or control of the licensee operating the relevant online music service, regardless of the form or the way in which it was obtained.

Non-Interactive Music Webcast Service

(2) No later than 20 days after the end of each month, any licensee that operates an online music service in relation to which they are required to pay royalties pursuant to paragraph 4(1)(a) shall provide, in relation to that service, to ARTISTI, a report setting out, for that month,

Semi-Interactive Music Webcast Service

(3) No later than 20 days after the end of each month, any licensee that operates an online music service in relation to which they are required to pay royalties pursuant to paragraph 4(1)(b) shall provide, in relation to that service, to ARTISTI, a report setting out, for that month,

Interactive Music Webcast Service

(4) No later than 20 days after the end of each month, any licensee that operates an online music service in relation to which they are required to pay royalties pursuant to paragraph 4(1)(c) shall provide, in relation to that service, to ARTISTI, a report setting out, for that month,

Hybrid Music Webcast Service

(5) No later than 20 days after the end of each month, any licensee that operates an online music service in relation to which they are required to pay royalties pursuant to paragraph 4(1)(d) shall provide, in relation to that service, to ARTISTI, a report setting out, for that month,

Permanent Download Music Service

(6) No later than 20 days after the end of each month, any licensee that operates an online music service in relation to which they are required to pay royalties pursuant to paragraph 4(1)(e) shall provide, in relation to that service, to ARTISTI, a report setting out, for that month, in relation to each file that was downloaded by an end-user,

Limited Download Music Service

(7) No later than 20 days after the end of each month, any licensee that operates an online music service in relation to which they are required to pay royalties pursuant to paragraph 4(1)(f) shall provide, in relation to that service, to ARTISTI, a report setting out, for that month,

Free Interactive Webcast Service

(8) No later than 20 days after the end of each month, any licensee that operates an online music service in relation to which they are required to pay royalties pursuant to paragraph 4(1)(g) shall provide, in relation to that service, to ARTISTI a report setting out, for that month,

Reporting Obligations

(9) A licensee that is required to provide a report to ARTISTI pursuant to more than one of subsections 6(2) to 6(8), shall file a separate report pursuant to each applicable subsection.

Calculation and Payment of Royalties

7. No later than 180 days after receiving from a licensee a report pursuant to section 6 for the last month in a quarter, ARTISTI shall provide to the licensee a detailed calculation of the royalties payable for that quarter for each file and a report setting out, in relation to the received report,

8. Royalties payable to ARTISTI under this tariff shall be due no later than 20 days after an online music service receives the report pursuant to section 7.

Repertoire Disputes

9. (1) A licensee that disputes the indication that a file contains a performance shall provide to ARTISTI information that ARTISTI deems sufficient to establish that an ARTISTI licence is not required pursuant to this tariff.

(2) A licensee that disputes the indication more than 20 days after receiving a report pursuant to section 7 is not entitled to interest on the amounts owed to them.

Adjustments

10. Updates to any information provided pursuant to sections 5, 6, 7, and 9 shall be provided with the next report dealing with such information.

11. (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

12. (1) A licensee 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 subsection 4(2), and sections 5, 6, and 9 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 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 licensee 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 ARTISTI shall not be taken into account.

Breach and Termination

13. (1) An online music service that fails to provide any report required by section 6 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

14. (1) Subject to subsections (2) and (3), ARTISTI, and each licensee and authorized distributor, 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

(3) Where confidential information is shared with a service provider as per paragraph 2(b), the service provider shall sign a confidentiality agreement, which shall be shared prior to the release of the information with the party whose information is to be disclosed, and shall not use any confidential information for any purpose other than to assist in the conduct of an audit or in the distribution of royalties to rights holders.

(4) Subsection (1) does not apply to information that is publicly available, or to information obtained from someone other than the collectives, a licensee or their authorized distributors, and who is not under an apparent duty of confidentiality to the service.

Non-Transferable Licence

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

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) For the purposes of this section, a report provided by ARTISTI pursuant to section 7 following the late reception of a report required pursuant to subsections 6(2) to 6(8) is deemed to have been received within the time set out in section 7 provided that, after receiving the late report required pursuant to subsections 6(2) to 6(8), ARTISTI provides the corresponding report required pursuant to section 7 no later than the date on which the next report required pursuant to section 7 is due.

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

(4) 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.

Addresses for Notices, etc.

17. (1) Anything that a licensee sends to ARTISTI shall be sent to 5445 De Gaspé Avenue, Suite 1005, Montréal, Quebec H2T 3B2, email: licence@artisti.ca, or to any other address or email address of which the service has been notified in writing.

(2) Communications with an 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.

Delivery of Notices and Payments

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

(2) Information provided pursuant to sections 5 to 7 and to subsection 9(1) shall be delivered electronically, by way of a delimited text file or in any other format agreed upon by ARTISTI and the licensee.

(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.