Canadian composers get download royalty


TORONTO -- Canadian music composers have secured a slice of the pie from legal song downloads on domestic online music stores including Apple's iTunes and local rival Puretracks.

The Copyright Board of Canada on Thursday granted the Society of Composers, Authors and Music Publishers of Canada the right to collect 3.4% of the proceeds from legal digital music sales.

A phased-in discount to enable fledgling online music stores to absorb the first-time payout to music rights holders brings the rate down to a 3.1% royalty on the legal downloads of songs.

The initial royalties for music composers will be modest, or about 3 cents on a typical MP3 song sold for CAN$0.99 ($0.97).

Nielsen Soundscan Canada estimates that about 225,000 songs are legally downloaded each year as the Canadian music industry continues to suffer from a far higher traffic in unauthorized music downloading online.

SOCAN applauded the Copyright Board of Canada decision on digital download royalties as it enables domestic music composers to finally begin earning money from digital music sales.

Canadian music labels opposed the move to a tariff on the online music store business, arguing that the cost to establish and maintain digital music sales remains high.

"We are keenly aware of the objectors' submissions. Indeed, temporary measures to ensure that the tariff is phased in gradually will be applied," the Copyright Board of Canada said in its 64-page decision. "However, in our opinion, minimum fees should be established here ... to ensure that rights holders do not subsidize business models."