SOCAN and music download rates.

There were quite a few articles on Friday talking about how Canada's Copyright Board Sets Royalty Rate for what composers will get from music downloads. This is yet another issue where you need to understand the music industry as 3 separate components, that disagree with each other even more than they do with outsiders.

SOCAN is the Society of Composers, Authors and Music Publishers of Canada, and represents the first and longest existing part of the music industry. Up until a little over a hundred years ago, composers selling sheet music to performers was the entire music industry.

Performers weren't considered artists in their own right in that day, any more than remix DJs were in more recent times. We are slowly graduating to recognize that there are many creative persons in the process that need to be adequately recognized.

Then came the first wave of pirates in the music industry who were "recording" the offering of the music industry without permission. The composers thought that these "talking machines" and "player pianos" would destroy the music industry, so would never give them permission. Many governments had to step in and legalize and monetize the practice of recording, and thus the recording industry moved from being pirates to being considered a legitimate part of the music industry.

The battles between the components of the music industry have never really ended.

What the latest battle was about was the recording industry wanting to continue to get the largest cut of any revenue of a music download. A similar battle happened with ringtones, where the recording industry tried to suggest that composers weren't owed any money at all.

I have a strong bias in this debate. I believe that it should be the musicians, which are the composers and the performers, that should get the bulk of any revenue. Any other entity should only get paid in relation to the value they offer directly to either musicians or music fans. The recording industry had its day in the past when they were important, but technology has changed the industry whether they like it or not.

I believe that SOCAN winning was the right thing to happen. While I would have preferred a percentage formula rather than an absolute amount (given alternative buisiness models such as all-you-can-hear subscription services), I believe they are owed a larger share of this business than they have been offered thus far. I also would have preferred that the amount collected directly by SOCAN and the amounts collected for composers by Canadian Musical Reproduction Rights Agency Ltd. (CMRRA) and the Quebec-based Society for the Reproduction Rights of Authors, Composers and Publishers (SODRAC) would have been combined. I expect that as the dust settles on the transformative changes happening in the music industry that these amounts will become easier to deal with, and we'll see more "one stop shopping" possibilities.

What I believe the outcome should be is that labels are forced to reduce the rates they charge, but unfortunately we won't be seeing this in the short term. They will continue to charge outrageous rates for the diminishing value-add they contribute to the process, and will continue to blame any revenue problems on musicians and music fans.

What we badly need in the short term is for music fans to better understand the dynamic that is happening in the music industry. I read so many articles and comments that begrudged composers for receiving a larger cut of the revenue from music downloads. Some even suggested composers were double-dipping, which is not how I see this dynamic at all. These musicians should not be the target for any of our anger which should always be directed at the subset of the industry known as the recording industry. We are in a time of major transition from legacy methods of production, distribution and funding, and the organizations standing in the way of a healthy music industry are the major recording labels.

Hug a music composer and a performer today!

Note: For a different perspective, focused on the specifics of this ruling rather than the general concept of whether composers should be making more money and makers/labels less, see Howard Knopf's The "Single Malt Tariff" - aged 12 years.

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Somewhere, I saw a breakdown of who gets how much of a $0.99 download. IIRC, there was something like $0.09 profit, and $0.50 for the record company.

The record company's share is clearly completely unreasonable.

Unfortunately, I can't find the article now :-(

Globe and Mail includes price breakdown...

An article by Grant Robertson, media reporter for the Globe and Mail, includes a price breakdown. Headline of "New blow to online song sellers" seems disconnected given the article talks about the fact that it is the legacy (and increasingly redundant) record labels that are taking 60% of the costs. It is this amount that must decrease -- in my mind to something far below what composers and performers should be are making.

Free/Libre and Open Source Software (FLOSS) consultant.

That's the one

It seems I mis-remembered the record companies' cut as only 50% when it's actually 60%.

More than order of magnitude out.

Whether 50% or 60% isn't that important when it is clearly an order of magnitude out, when it is questionable when "labels" should be getting even 5%. The other problem I see is that what performers are earning isn't separated out from what labels are extracting.

Free/Libre and Open Source Software (FLOSS) consultant.

Comment to Ottawa Citizen.

I wrote the following as a comment to an Ottawa Citizen article on this topic.

This article seems to confuse composers (which SOCAN, CMRRA and SODRAC represent) and performers which sign with labels. All three of these independent components of the larger music industry have their own independant copyright, and the battles within the music industry are often greater than the battles outside.

While the labels take the largest cut of the music download industry, they offer diminishing value-add. There was a time when the capital costs of recording, editing and distributing music justified the bankers/lawyers that make up the record labels, but that day is long gone. Rather than begrudging songwriters making a tiny bit more on music, we should be shining light on the fact that the legacy major labels are holding back economic progress in the industry.

We need to all stop blaming the musicians as they are the victims -- they didn't set up the system, and without our help can't possibly fix it.

Russell McOrmond
Ottawa, Ontario, Canada
Host of

Free/Libre and Open Source Software (FLOSS) consultant.

Wired: Canadian Copyright Board's Rates Appear to Make Sense

Eliot Van Buskirk blogged for Wired magazine, suggesting that what the Canadian copyright board did "appears to make a lot more sense than what the U.S. Copyright Board came up with."

It seems I need to read the ruling closely as it is based on percentages with a minimum, rather than a fixed rate. Some of the media reports got this detail wrong. The last page of the PDF document details the rates.

This decision also doesn't clarify the questions I've had around P2P legal theories as the board seems to suggest that Internet distribution of music is both a "communication by telecommunications" and a simple "copying" at the same time.

Free/Libre and Open Source Software (FLOSS) consultant.