Monthly Archives: January 2014

Offline listening

Published 01/27/2014

By Jean-Robert Bisaillon

The Web is full of information on new music streaming services, also known as music webcasting or web streaming services. Numerous artists are standing up against these low-paying services (see, but little attention is being paid to the downstream result of these services: offline listening. What are the impacts of these types of services on the music industry value chain?

Variously called tethered download, limited download, stand-alone portable use or offline mode (and referred to by Francophone users as “écoute hors-connexion,” “forfaits mobiles” or, in the case of CSI Inc., “téléchargements limités”), what these services are offering users is the hugely attractive ability to buffer music onto their portable devices, and listen to their selections offline later on while riding the subway, driving their car or jogging.

In my opinion, this new way of using music is in line with the major transformations of physical supports. Streaming music listening has often been likened to broadcasting, with the notable difference that users can select the station’s content piece by piece, an ability that has the potential of disrupting broadcasting models. This being said, once we acquire the ability to cut ourselves off from the network and take off with our favourite music, what has really changed is our relationship with the physical support of music. Whereas a music CD used to cost $20 and a permanent album download was available for $9.99, subscriptions to these new models, for a monthly fee of $10 or $15, enable users to browse the supplier’s catalogue before leaving home and access virtually any album without being connected to the Internet. The permanent download model has lost its once special appeal.

Available offline listening services include Slacker Premium Radio, MOG Primo, Spotify Premium, Google Play Music Locker, Deezer Premium Plus, Rdio Unlimited/Illimité and Zik Mobile.

TABLE 1 – Source: Jean-Robert Bisaillon
Streaming-Royalties Chart-EN

Caption: Table 1 shows a partial account statement sent by a world renowned aggregator to a client record company. The iTunes royalty for a permanent download, as we know, is approximately half a euro (0.50) or 50% of the consumer service price. The royalty paid by Deezer Premium Plus is approximately one-hundredth of a euro (0,009), which is 50 times less, and the royalty paid by Spotify Mobile is half that amount (0.005), which is 100 times less.

Table 1 shows that the royalties paid on behalf of offline listening are only marginally higher than those for online streaming, and are sometimes up to 100 times lower that what can be obtained from the iTunes model.

The question is, how many songs do consumer actually buffer and save each month on their mobile phones in return for the 10 euro subscription they are paying? Under current rates, consumers may store up to 2,000 tracks (the equivalent of some 150 albums) before the dollar value of a single iTunes permanent album download is matched. This is a sizable value for consumers, of course, but we may wonder whether consumers fully take advantage of that possibility. If such ceilings are not actually reached, then we can question the discount rates offered by offline streaming services. Moreover, the value is clearly moving towards the storage capacities of mobile devices.

At a time when software programs make it easy to determine the exact number of tracks being listened to and the actual amount of time each file remains buffered, why can’t users be billed for uses in excess of a given threshold – say 30 offline albums per month – and why are the royalties paid being reduced by virtually 100% for uses that amount roughly to a permanent iTunes album download? Mind you, these services are incurring such high operating costs looking after their all-you-can-consume buffets! Competition is brutal in the digitized music market – a non-rival commodity existing in an infinite number of copies. But the real issue is that the profitability of these services and of the makers of mobile devices is being squarely achieved on the backs of creators.

In the real world, no consumer needs an infinite amount of music – there are not enough hours in the day to stretch the music listening experience that far. People also need some time to digest. The future will make it necessary for us to revise the broken social contract between artists and their audience. In the meantime, new rules must be put in place to cancel the devastating effects that such prevalent toxic rates are having on the music ecosystem.

Two ways to do the right thing…

Published 01/17/2014

By Jennifer Brown

If you’re a businessperson, there’s a good chance you already know that background music is valuable to your business.

Music brings people into your store, restaurant, bar, club, or similar establishment. Music can be targeted towards your customers to immediately make them feel welcome. Music can influence them to linger longer, and purchase more of your goods or services. Music can lead them to find greater enjoyment in the consumer experience of your business. If you’d like to see how music has actually improved sales and staff morale for businesses like yours, visit the MusicWorks website.

If you’re using music in your business, there are a couple of easy ways for you to get your SOCAN licence for background music.

If you love making playlists, or want to bring your specific taste in music into your business space, you can play your CDs, iPod, radio, internet radio station or television. If you choose this approach, you simply provide a modest amount, once a year, based on the size of your establishment. It’s easy to do, and you can report and pay online  (scroll down to Tariff 15A, “Background Music”).

SOCAN then ensures that those who wrote, published, or otherwise own the performing rights to the music are compensated fairly for their work. Just like the businesses that play their music, songwriters are working to make a fair living from their talent.

Or if you prefer, you can put the music selection and licensing in the hands of a background music provider. These services will customize playlists for you based on who your customers are and the “feel” you want in your business space.

Many background music providers can even determine different playlists for different times of the day, or for different physical areas of your business, to maximize customer satisfaction throughout. They can provide you with different subscription options based on your needs. Through your subscription, your SOCAN license is included, and we work with them to make things easy and smooth. For more information, click here and scroll down to Tariff 16: Background Music Suppliers.

In Canada, SOCAN represents the rights of songwriters, composers and music publishers, whereas an organization called Re:Sound represents the rights of music performers (the musicians who play on the song) and record companies (the businesses that make and distribute the recordings). A Re:Sound license is also included in your subscription to these background music services, further extending their value as a “one-stop shop.”

Whether using a subscription-based service or your own playlists and equipment, you’ll be providing fair, legal and ethical compensation – and a living – to the songwriters, composers and music publishers who create the music that enhances and adds value to your business.

If you’re using music, it’s just the right thing to do.

How working songwriters earn a living from SOCAN

Published 01/14/2014

By Kit Wheeler

One of the most popular misconceptions about SOCAN is that the performance royalties that we collect go mostly to established, high-profile “superstar” SOCAN members like Avril Lavigne, Leonard Cohen, Michael Bublé, Céline Dion, Chad Kroeger and Sarah McLachlan, among others.

But in reality, only about 20 percent of SOCAN members are “high earners” like this; the other roughly 80 percent are, more often than not, everyday songwriters who work hard to earn a living at their craft. Sometimes, these songwriters are not recording artists or live performers, so the royalties they receive from SOCAN aren’t just one part of their income, but the only way that they earn a living. And there’s no guarantee that their music will be recorded or performed live to actually earn those royalties.

So how do these often unheralded songwriters make a living from SOCAN?

Well, when you hear a song on the radio, a piece of music in a TV program or a score for a movie, the person (or people) that wrote the music and the lyrics (if any) earns royalties. SOCAN pays these royalties to the creators and publishers of the music that’s used in television and cable TV programs, played on the radio and satellite radio, included in movies in theatres, in movies on hotel TV, performed in concerts, and streamed on the internet.

More specifically:

  • There’s music used in virtually every television show and cable program. SOCAN captures all of the programs that are aired in Canada, and all of the music used within each and every program, and tracks all of the people involved in creating each and every piece of music to ensure that the royalties are paid to those individuals.
  • For songs heard on the radio – whether it’s on a commercial station, satellite radio or on a campus station – SOCAN will pay royalties to the songwriters and music publishers for those performances.
  • For live performances of music in a large concert hall, at a summer weekend festival, or in a small local bar, SOCAN pays royalties to the creators of the songs that are performed.
  • For music used in movies shown in a theatre, via movie rentals, through music services in hotels and motels, and on music TV channels on cable stations, SOCAN similarly collects performance royalties, from which songwriters and music publishers earn their living.
  • The most recent and rapidly growing source of income for creators is the internet.  Songs that are streamed on online music services, and music videos streamed on You Tube, are all tracked and processed by SOCAN to pay royalties.
  • Music is heard and performed almost everywhere you go: at restaurants, bars, clubs, dentists’ offices, hair salons, elevators, hotel lobbies, when you’re on hold on the telephone, and so on. SOCAN licenses all of these music uses to ensure that the often unsung people who work hard to create all of this music are properly compensated for their effort.

After all, songwriters aren’t paid on an hourly rate for the days, weeks, months and years that they spend on their craft. It’s only when their music is finally used and performed in public that they begin to reap the benefits of their hard work. SOCAN is there to make sure that these sometimes “behind-the-scenes” songwriters they get paid for their music being played – so that not just the superstars, but they, too, can earn a living from their songs.