Canadian IP Voices: Using someone’s music in business

Canadian IP Voices is a podcast covering all things intellectual property, through discussions with industry professionals and stakeholders across Canada. In episode 11, How to play someone’s music online, we sat down with James Leacock, director of Royalty Collections at the Society of Composers, Authors and Music Publishers of Canada (SOCAN), to discuss the IP rights, procedures and licences needed to play someone else’s music in a commercial situation.

Most people know that music is copyrighted—that’s why we have to pay for music streaming services, MP3s, CDs and records. But what if you want to play music in your department store for shoppers to listen to or in your café while customers sip on a latté? Is it as simple as connecting your phone to the speaker system and hitting play on your latest mix?

James explains that purchasing music or subscribing to a streaming service does not automatically grant you the right to play music in a commercial setting. Whether you intend to play it online or live in a physical location, this music adds value to your business. And the rights holders need to be compensated for providing that value. Legal music licences take into consideration the value of music to a business and ensure the owners of the music are compensated through licence fees. In fact, James says that, without a SOCAN music licence, you’d have to get permission and negotiate a licence with every rights holder whose music you intend to play. That’s why, when you’re using music in your business, it’s important to work with SOCAN or Entandem, an organization created to help simplify the licensing process.

SOCAN administers and protects the performing and reproduction rights of more than 175,000 songwriters, music publishers, composers and visual artists. If you want to play music at your business, whether online, on the TV or on the radio, get in touch with SOCAN.

Entandem is a joint venture between SOCAN and RE:SOUND, which is a music licensing non-profit that seeks fair compensation for performance rights of artists and record companies. Not only does Entandem simplify the licensing process for Canadian businesses that use recorded or live music but also, through extensive outreach activities, lets fitness facilities, nightclubs, live music venues, bars, restaurants, retail establishments and hotels, among others, know about their legal obligation common to both RE:SOUND and SOCAN to obtain music licences.

But what’s the difference between a performer’s licence, a reproduction licence and a synchronization licence? And how are the royalties from these licences that are paid by venues, broadcasters, businesses, etc., distributed back to composers, songwriters, publishers and producers?

To illustrate how these licences work in real life, consider the following fictitious scenario.

The musician’s view

Kieran is an independent music creator and DJ. He first discovered his passion for composing electronic dance music during a course in university on how to use a digital audio workstation. At first, Kieran made music just for the fun of it, posting his songs to a music sharing site for him and a handful of followers to enjoy. But as he improved and his following grew, he began to consider commercializing his music and knew he needed a way to protect it. The only problem was he didn’t know where to begin.

While in the studio one day, Kieran began talking about it with his friend Emily, someone he met through their mutual interest in music. Emily advised Kieran to become a member of SOCAN and to register his songs for performing and reproduction rights. “It doesn’t cost anything. You can do it online. It’s very easy.” Though Kieran was initially hesitant, Emily explained that SOCAN would be able to manage all the royalties he would receive when people pay for licences to use his music, allowing him to focus on what he does best—creation. After they were finished in the recording studio, Kieran joined SOCAN, registered his previous catalogue of music and, together, he and Emily registered their new song, which featured Emily on vocals over top of Kieran’s arrangement. With Emily’s permission, Kieran posted their song on a music sharing site and it went viral.

Performing someone else’s song: Performance licence

Two weeks later, a local bar owner named Eddie heard the tune being performed by a subway busker on his way to work and couldn’t get it out of his head. So, he asked the indie band he had hired to play on Thursday nights if they could learn the tune. Eddie knew he would need a public performance licence for the band to perform the song, like he did for all the other songs they played, so he contacted Entandem, the organization that represents rights holders from SOCAN, among others. They calculated the fee based on the size of his bar and the amount Eddie was paying his band. The total came out to around $300, but Eddie knew it was a small price to pay for the additional foot traffic it would bring to his bar.

Creating audiovisual work: Synchronization licence

Unfortunately, it was taking a while for word to get around, and Eddie realized he needed a way to promote the latest addition to the band’s set. He decided to create a promotional video for his website and social media, with footage of his bar and audio of the song playing in the background. He knew this would mean licences for the right to reproduce and communicate the music online and synchronization rights because he was incorporating musical work into audiovisual work. This time, he contacted SOCAN because he would be using the music online.

Reproducing someone else’s song: Reproduction licence

As it turned out, the version of the song Eddie had heard the busker playing and had requested the rights for was not the original version recorded by Kieran and Emily but an acoustic cover by a different artist, Melissa, who had been granted a licence to reproduce and perform the original. Melissa was not a registered SOCAN member but was a member of one of the many organizations across the globe with which SOCAN has reciprocal agreements, meaning Eddie could still obtain the necessary licences through SOCAN.

Again, SOCAN calculated Eddie’s fee based on what he wanted to use the song for and took care of distributing the royalties back to the rights holders. Eddie enjoyed increased business as more patrons came to his bar, Melissa enjoyed greater exposure of her acoustic cover and the royalties she earned from Eddie’s licences and both Kieran and Emily enjoyed the royalties they received from Eddie and Melissa. All because they knew how to navigate copyrights.

To find out more about intellectual property in Canada and about playing someone else’s music online, listen to episode 11 of Canadian IP Voices with James Leacock, director of Royalty Collections at SOCAN.

Did you know?

SOCAN not only serves music creators, music publishers and visual artists but also ensures users are licensed to play and collects and distributes royalties in Canada and worldwide. SOCAN also administers copyrights on behalf of its visual arts and crafts members by issuing licences for the use of their works.

Learn more about SOCAN.

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