Courtesy of SOCAN
The MDA has received a few inquiries from dealers regarding invoices they have received from SOCAN. The following are some of their frequently asked questions:
Q: What is SOCAN?
A: SOCAN provides licences that give you the freedom to play any music you want in your business, legally, ethically, and easily. Without SOCAN, Canadian businesses would have to get permission from every composer, songwriter, lyricist, and publisher of every musical work they intend to use. This permission is not granted when you buy music (CDs, MP3s, music services, etc.) – this only allows you to play the music in a private (i.e. non-business related) setting. Similarly, when you hire musicians to play music, the fees you pay go to the performers, not the creators of the songs they perform. Even if the performers are the creators of a song, they need to be compensated for these separate efforts – music creation and music performance.
Q: How does a licence work?
A: A SOCAN licence grants the recipient permission to use music in a specific way. Businesses may need more than one licence, depending on how they use music (i.e. one for background music, one for music on hold, etc.).
Q: Where does my licence fee go? Who gets it?
A: SOCAN is a member-based, not-for-profit organization. 86 cents of each dollar collected by SOCAN in 2010 through the issuance of licences was distributed as royalties to its members and the members of SOCAN’s affiliated international societies. The remainder covered SOCAN’s operating costs, as approved by SOCAN’s board of directors, which is comprised of members. (songwriters, composers, lyricists and publishers.)
Q: What is a public performance?
A: A public performance is one that occurs either in a public place or any place where people gather (other than a small circle of a family or its social acquaintances.) A public performance is also one that is transmitted to the public; for example, radio or television broadcasts, music-on-hold, cable television, and by the internet. Generally, those who publicly perform music obtain permission from the owner of the music or his representative.
Q: Why do I have to pay for background music?
A: Using background music (including MP3 and other digital files used via a computer, iPod, internet radio, radio "local" via Internet, TV, CD, cassette, jukebox, vinyl, etc..) in the waiting area of the service department and the showroom requires a SOCAN license. There is one exception to this: no fees are payable for the use of any radio receiver.
Q: Why do I have to pay for music on hold?
A: When you place a caller on hold and transmit music via your telephone lines, that is a public performance of the music. It is your responsibility to obtain permission to perform SOCAN songs from SOCAN or directly from the copyright owner. SOCAN represents tens of thousands of copyright owners and millions of songs and an SOCAN license will give you the right to perform them all.
Q: Isn’t this covered by my music provider?
A: When a dealer has a commercial contract with a music provider, it must provide proof to SOCAN (copy of contract for example) to cross-reference the information submitted to us by the supplier who owns the T16 license – Music Supplier. No fees will be payable under Tariff 15A or 15B if the dealer is on the list submitted by the licensed music supplier.
As an exception to the above, if your music provider doesn’t hold a current T.16 license with SOCAN, the dealer has the obligation to obtain the appropriate based on usage (Tariff 15A and / or Tariff 15B).
Q: I already bought the CD so why do I need a SOCAN licence?
A: When you buy a CD at a record store, you have not paid the owners for the right to use their music in public. Only a SOCAN licence allows you to perform that CD in public. Of course, if you purchase a CD for private use (e.g., playing it in your car) a licence is not required.
Q: Why should I care about getting a performing right licence?
A: Fair compensation for the use of a creator's work is protected under the Copyright Act. Protection of intellectual property, such as copyright-protected music, declares that Canada is a society that values creativity and encourages artists to compose works, as their works will be protected.
Q: What happens if I don't pay?
A: Our business is to make sure that music creators and publishers are fairly compensated for the use of their works. A SOCAN licence allows you access to virtually the world's entire repertoire of copyright-protected musical works. If you authorize the public performance of copyright protected-musical works without obtaining a performing right licence, you are liable for copyright infringement and we may protect these rights by pursuing the matter through legal channels.