March 16, 2007 18:09 ET

CSI CMRRA/SODRAC Inc.: Songwriters and Music Publishers Welcome Decision on Online Music Royalties

TORONTO, ONTARIO--(CCNMatthews - March 16, 2007) - The Copyright Board of Canada today announced its decision on the royalties that online music services such as iTunes, Archambaultzik and Puretracks will pay to songwriters and music publishers to reproduce and to authorize reproductions of songs.

The Board determined that online music services should pay 8.8% of the amount paid by a consumer to download a song onto his or her computer. Subscription services that provide "limited" downloads that become unusable by subscribers when their subscription ends will pay 5.9% of the monthly subscription fee revenue. Subscription services that provide only "on-demand" streams of music will pay 4.6% of the total subscription fees collected each month. These percentage rate royalties are each subject to a minimum payment per download, or per subscriber per month, specified in the Board's decision. The royalties will be discounted by 10% until December 31, 2007.

The tariff was filed by CMRRA/SODRAC Inc. (CSI), a joint venture of two copyright collectives that represent the reproduction rights of songwriters and music publishers. The Canadian Musical Reproduction Rights Agency (CMRRA), based in Toronto, and the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc., based in Montreal, together represent almost all musical works from around the world.

David Basskin, President of CSI and of CMRRA, said, "This is a landmark ruling for songwriters and music publishers, bringing certainty and stability to the online music marketplace. The Board's decision recognizes the value of songs, confirming that they are the cornerstone of the music industry."

Online music sales in Canada have grown rapidly over the past few years, approximately doubling every year. Online sales accounted for 3.6% of total sales of recorded music in 2005, and 7.2% in 2006; so far in 2007, they are double last year's level. Meanwhile, the last few years have seen sales of prerecorded CDs fall steadily, with a corresponding decline in payments to songwriters and music publishers.

CSI Vice President Alain Lauzon, who is also General Manager of SODRAC, stated that "The online market represents the future for everyone in the music industry. While the Board's decision gives us lower royalties than we asked for, and less than what we consider to be the full value of songs, we believe we received a fair hearing. The rate-setting process before the Copyright Board is one that gives the Board essential factual information about the businesses involved, with the opportunity to hear evidence and argument from all parties. We fully recognize the value of the process, and so we accept the outcome."

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