Royalty rates may silence bars
TORONTO – Canadian restaurants, bars and clubs are warning they may have to turn down the music if a proposed royalty increase becomes a reality, but the non-profit organization seeking the raise for performers says it’s time they paid up.
The Neighbouring Rights Collective of Canada wants to increase its royalty fee for background music by more than triple the current rate, a move it says will properly compensate performers and engineers.
It also has a proposal before the Copyright Board of Canada that would change how venues pay to play music that customers dance to.
“It’s about ascribing the proper values to music,” said collective president Ian MacKay, who argues that songwriters and publishers have been getting paid better royalties for decades while performers and producers have been given short shrift.
“It’s to compensate the performers for the use of their music. Imagine a dance club without music being played, people want music to dance to and that certainly adds value to the business of running a night club.”
But the Canadian Restaurant and Foodservices Association says the proposals would force many business owners to reconsider whether playing music is worth the cost.
In particular, the association is highlighting the implications of higher fees for venues that feature dancing, which could result in annual fee increases between $6,000 and $30,000.
“It’s exorbitant in the extreme and it will force many operators to consider dropping music altogether, or at least have them rethink the use of dance music,” said association spokesman David Harris.
The proposed tariff is going before the Copyright Board of Canada and Harris said he will “vigorously argue that this proposal is unfair and that it is financially devastating.”
But MacKay claims those figures are at the high end of the range and would only apply to mega-clubs, while smaller establishments would have fees in the hundreds, not thousands.
Businesses pay similar fees to the Society of Composers Authors and Music Publishers of Canada, which collects about $1.4 million in royalties every year for background music from around 31,000 businesses, including restaurants, hotels, shopping malls, banks, retail stores, factories and professional offices.
In releasing its reasons for certifying SOCAN’s most recent set of tariff rules, the Copyright Board of Canada stated “background music touches practically every aspect of our daily lives, from the tunes we hear in the elevator, to the jazz we listen to over dinner at a restaurant.”
An expert who testified as the proposed tariff was being debated said research suggests background music “favourably impacts customers’ mood and perception of their environment.”
“As a result, they are likely to stay longer in a store, to buy more and to have a positively enhanced perception of merchandise and customer service,” said Prof. Richard Michon of the Ted Rogers School of Retail Management at Ryerson University in Toronto.
“The right background music can even foster a stronger sense of customer loyalty.”
MacKay said businesses should be budgeting for music just as they budget for other expenditures.
“A restaurant has many suppliers of food, flowers, decor – all these things that go into the dining establishment,” he said.
“Well one of the things that definitely goes into the value of a dining establishment is the music they’re playing in the background, which sets the mood as much as the decor.”
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